AGREEMENT AND PLAN OF MERGER

Ex. 2.1

AGREEMENT AND PLAN OF MERGER

by and among

ADC TELECOMMUNICATIONS, INC.,

HAZELTINE MERGER SUB, INC.

and

LGC WIRELESS, INC.

1

OCTOBER 21, 2007
AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated October 21, 2007, is made and entered into by and among ADC Telecommunications, Inc., a Minnesota corporation (“ Parent ”), Hazeltine Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“ Merger Sub ”), and LGC Wireless, Inc., a Delaware corporation (the “ Company ”). Merger Sub and the Company are sometimes collectively referred to herein as the “ Constituent Corporations ”.

WITNESSETH:

WHEREAS , the respective Boards of Directors of Parent, Merger Sub and the Company have determined that it is advisable and in the best interests of the respective corporations and their shareholders and stockholders that Merger Sub be merged with and into the Company in accordance with the Delaware General Corporation Law (the “ DGCL ”) and the terms of this Agreement, pursuant to which the Company will be the surviving corporation and will be a wholly owned subsidiary of Parent (the “ Merger ”); and

WHEREAS , Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants, and agreements in connection with, and establish various conditions precedent to, the Merger; and

WHEREAS , as an inducement to Parent to enter into this Agreement, certain principal stockholders of the Company are concurrently herewith entering into Voting Agreements (the “ Voting Agreement ”) in substantially the form attached hereto as Exhibit A , whereby each such stockholder agrees to vote in favor of the Merger and all other transactions contemplated by this Agreement.

NOW, THEREFORE , in consideration of the representations, warranties, covenants and agreements set forth in this Agreement, the parties hereto, intending to be legally bound, hereby agree as follows:

Article I

The Merger

1.1 The Merger . At the Effective Time (as defined in Section 1.3 hereof), subject to the terms and conditions of this Agreement, Merger Sub shall be merged with and into the Company, the separate existence of Merger Sub shall cease, and the Company shall continue as the surviving corporation. The Company, in its capacity as the corporation surviving the Merger, is hereinafter sometimes referred to as the “ Surviving Corporation ”.

1.2 Effect of Merger . At the Effective Time, the effect of the Merger shall be as provided in this Agreement and Section 259 of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

1.3 Effective Time . Subject to the terms and conditions of this Agreement, the parties hereto will cause a copy of the Certificate of Merger, in substantially the form attached hereto as Exhibit B (the “ Certificate of Merger ”) to be executed, delivered and filed with the Secretary of State of the State of Delaware in accordance with the applicable provisions of the DGCL at the time of the Closing (as defined in Section 1.7 hereof). The Merger shall become effective upon filing of the Certificate of Merger with the Secretary of State of the State of Delaware, or at such later time as may be agreed to by the parties and set forth in the Certificate of Merger. The time of effectiveness of the Merger is herein referred to as the “ Effective Time ”. The day on which the Effective Time occurs is herein referred to as the “ Effective Date ”.

1.4 Certificate of Incorporation; Bylaws . At the Effective Time, the Certificate of Incorporation of the Surviving Corporation shall be amended and restated in its entirety to be identical to the Certificate of Incorporation of Merger Sub as in effect immediately prior to the Effective Time, and such amended Certificate of Incorporation shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended in accordance with the DGCL and as provided in such Certificate of Incorporation; provided , however , that, at the Effective Time, Section 1 of the Certificate of Incorporation of the Surviving Corporation shall be amended and restated in its entirety to read as follows: “ Name . The name of the corporation is LGC Wireless, Inc.” and Section 4 of the Certificate of Incorporation of the Surviving Corporation shall be amended and restated in its entirety to read as follows: “ Capital Stock . The total number of shares that the corporation is authorized to issue is 150,000,000, par value $0.01 per share, all of which shares are designated as common stock.” Immediately after the Effective Time, the authorized capital stock of the Surviving Corporation shall consist of 150,000,000 shares of common stock, par value $0.01 per share. At the Effective Time, the Surviving Corporation’s Bylaws shall be amended and restated in their entirety to be identical to the Bylaws of Merger Sub as in effect immediately prior to the Effective Time and such Bylaws shall be the bylaws of the Surviving Corporation until thereafter amended in accordance with the DGCL and as provided in such Bylaws.

1.5 Directors and Officers . From and after the Effective Time, the directors of the Surviving Corporation shall be the Persons who were the directors of Merger Sub immediately prior to the Effective Time, and the officers of the Surviving Corporation shall be the Persons who were the officers of Merger Sub immediately prior to the Effective Time. Said directors and officers of the Surviving Corporation shall hold office for the term specified in, and subject to the provisions contained in, the Certificate of Incorporation and Bylaws of the Surviving Corporation and applicable law. If, at or after the Effective Time, a vacancy shall exist on the board of directors or in any of the offices of the Surviving Corporation, such vacancy shall be filled in the manner provided in the Certificate of Incorporation and Bylaws of the Surviving Corporation.

1.6 Taking of Necessary Action; Further Action . Parent, Merger Sub and the Company, respectively, shall each use its or their best efforts to take all such action as may be necessary or appropriate to effectuate the Merger under the DGCL at the time specified in Section 1.3 hereof. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the provisions of this Agreement and to vest the Surviving Corporation with full right, title and possession to all properties, rights, privileges, powers and franchises of either of the Constituent Corporations granted pursuant to the Merger, the officers of the Surviving Corporation are fully authorized in the name of each Constituent Corporation or otherwise to take, and shall take, all such lawful and necessary action.

1.7 The Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”) will take place at the offices of Dorsey & Whitney LLP, 50 South Sixth Street, Minneapolis, Minnesota, within three business days after the date on which the last of the conditions set forth in Article VII hereof, other than the delivery of any documents required to be made at the Closing, shall have been satisfied or waived, or at such other place and on such other date as is mutually agreeable to Parent and the Company (the “ Closing Date ”). The Closing will be effective as of the Effective Time.

Article II

Conversion of Securities

2.1 Definitions . The following terms used in this Article II shall have the following meanings:

(a) “ Company Capital Stock ” means, collectively, the Series A-1 Preferred Stock, the Series B-1 Preferred Stock and the Company Common Stock.

(b) “ Company Common Stock ” means the common stock, par value $0.0001 per share, of the Company.

(c) “ Company Option ” means any unexercised option to purchase Company Common Stock issued pursuant to the Company’s 1997 Stock Plan, whether vested or unvested.

(d) “ Company Warrant ” means any warrant to purchase Company Common Stock, whether or not exercisable.

(e) “ Escrow Percentage ” means the result, expressed as a percentage to three decimal points, of $15,500,000, divided by the sum of the aggregate of the Merger Consideration payable to (i) the holders of Company Capital Stock and (ii) the holders of Qualified Warrants.

(f) “ Exchange Ratio ” means the quotient obtained by dividing (i) the Common Price Per Share by (ii) the weighted average closing sale price for a share of common stock of Parent as quoted on the Nasdaq Global Select Market during normal trading hours for the ten consecutive trading day period ending one business day prior to the Closing Date.

(g) “ Out-of-the-Money Option ” means a Company Option set forth in Schedule 2.1(g) hereto.

(h) “ Out-of-the-Money Warrant ” means a Company Warrant set forth in Schedule 2.1(h) hereto.

(i) “ Purchase Price ” means an amount equal (a) $155,000,000 less (b) the Transaction Expenses less (c) the Rolling Option Incremental Value plus (d) the aggregate exercise prices of (1) the Qualified Options cancelled pursuant to Section 2.4(a) and converted into the right to receive the Option Spread, (2) the Rolling Options cancelled pursuant to Section 2.4(b) and converted into the right to receive Parent Rollover Options and (3) Qualified Warrants cancelled pursuant to Section 2.4(d) and converted into the right to receive the Warrant Spread.

(j) “ Qualified Option ” means a Company Option with respect to which the holder has elected to receive the consideration described in Section 2.4(a) pursuant to a validly executed consent substantially in the form set forth in Exhibit D-1 , which consent is in full force and effect at the Effective Time. Solely for the purposes of this Agreement, any Company Option for which a validly executed consent substantially in the form set forth in Exhibit D-1 has not been obtained prior to the Effective Time shall be treated as if it were a Qualified Option.

(k) “ Qualified Warrant ” means a Company Warrant set forth in Schedule 2. 1(k) hereto.

(l) “ Rolling Option ” means a Company Option with respect to which the holder has elected to receive the consideration described in Section 2.4(b) pursuant to a validly executed consent substantially in the form set forth in Exhibit D-1 , which consent is in full force and effect at the Effective Time.

(m) “ Rolling Option Incremental Value ” means an amount equal to $1,000,000.

(n) “ Series A-1 Preferred Stock ” means the Series A-1 mandatorily redeemable convertible preferred stock, par value $0.0001 per share, of the Company.

(o) “ Series B-1 Preferred Stock ” means the Series B-1 mandatorily redeemable convertible preferred stock, par value $0.0001 per share, of the Company.

(p) “ Transaction Expenses ” means (i) the aggregate fees and expenses payable to the Company’s financial and legal advisors in connection with the transactions contemplated by this Agreement plus (ii) the aggregate amount, not to exceed the maximum amount set forth on Schedule 2. 1(p) hereto, paid pursuant to the Company’s Management and Employee Bonus Plan.

2.2 Conversion of Securities . By virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or any holder of shares of Company Capital Stock, the following shall occur in the following order and priority:

(a) At the Effective Time:

(i) each share of Series B-1 Preferred Stock issued and outstanding immediately prior to the Effective Time (other than (A) any shares of Series B-1 Preferred Stock to be canceled pursuant to Section 2.2(b) hereof and (B) any Dissenting Shares) will be canceled and extinguished and be converted automatically into the right to receive $2.34 (the “ Series B-1 Price Per Share ”), of which an amount equal to the product of (X) the Series B-1 Price Per Share, times (Y) the Escrow Percentage will be delivered to the Escrow Agent by Parent pursuant to Section 2.5 hereof (such amount to be referred to herein as the “ Per Share Series B-1 Escrow Amount ” and the difference between the Series B-1 Price Per Share and the Per Share Series B-1 Escrow Amount is to be referred to herein as the “ Closing Price Per Series B-1 Share ”);

(ii) if, and only to the extent that, prior to the Effective Time, the holders of the required percentage of the outstanding shares of the Series A-1 Preferred Stock have not consented to the conversion of shares of Series A-1 Preferred Stock into shares of Company Common Stock in accordance with the Company’s Charter Documents, each share of Series A-1 Preferred Stock issued and outstanding immediately prior to the Effective Time (other than (A) any shares of Series A-1 Preferred Stock to be canceled pursuant to Section 2.2(b) hereof and (B) any Dissenting Shares) will be canceled and extinguished and be converted automatically into the right to receive $1.2656 (the “ Series A-1 Price Per Share ”), of which an amount equal to the product of (X) the Series A-1 Price Per Share, times (Y) the Escrow Percentage will be delivered to the Escrow Agent by Parent pursuant to Section 2.5 hereof (such amount to be referred to herein as the “ Per Share Series A-1 Escrow Amount ” and the difference between the Series A-1 Price Per Share and the Per Share Series A-1 Escrow Amount is to be referred to herein as the “ Closing Price Per Series A-1 Share ”); and

(iii) each share of Company Common Stock (including each share of Company Common Stock, if any, issued upon the conversion, prior to the Effective Time, of shares of Series A-1 Preferred Stock into shares of Company Common Stock in accordance with the Company’s Charter Documents) issued and outstanding immediately prior to the Effective Time (other than (A) any shares of Company Common Stock to be canceled pursuant to Section 2.2(b) hereof and (B) any Dissenting Shares) will be canceled and extinguished and be converted automatically into the right to receive an amount (the “ Common Price Per Share ”) equal to the result of (i) the excess, if any, of the Purchase Price over the aggregate of the amounts paid pursuant to Sections 2.2(a)(i) and 2.2(a)(ii) above, divided by (ii) the sum of (a) the number of outstanding shares of Company Common Stock, (b) the number of shares of Company Common Stock issuable upon exercise of outstanding Company Options (other than any outstanding Out-of-the-Money Options) and (c) the number of shares of Company Common Stock issuable upon exercise of outstanding Company Warrants (other than any outstanding Out-of-the-Money Warrants), of which an amount equal to the product of (X) the Common Price Per Share, times (Y) the Escrow Percentage will be delivered to the Escrow Agent by Parent pursuant to Section 2.5 hereof (such amount to be referred to herein as the “ Per Share Common Escrow Amount ” and the difference between the Common Price Per Share and the Per Share Common Escrow Amount is to be referred to herein as the “ Closing Price Per Common Share ”).

(b) At the Effective Time, all shares of Company Capital Stock that are owned by the Company as treasury stock and each share of Company Capital Stock owned by any direct or indirect wholly owned subsidiary of the Company immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof.

(c) At the Effective Time, each share of common stock, $0.01 par value, of Merger Sub (“ Merger Sub Common Stock ”) issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for 110,000 validly issued, fully paid and nonassessable shares of common stock, $0.01 par value, of the Surviving Corporation, and the Surviving Corporation shall be a wholly owned subsidiary of Parent. Each stock certificate of Merger Sub evidencing ownership of any such shares shall continue to evidence ownership of such shares of capital stock of the Surviving Corporation.

2.3 Exchange of Certificates .

(a) Promptly, and in any event no later than three business days after the Effective Time, the Parent shall cause to be mailed to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding shares of Company Capital Stock (the “ Certificates ”) (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Parent, and shall be in such form and have such other provisions as Parent may reasonably specify and which shall be reasonably acceptable to the Company) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Closing Price Per Series B-1 Share, Closing Price Per Series A-1 Share or the Closing Price Per Common Share, as appropriate. Upon surrender of a Certificate for cancellation to Parent, together with such letter of transmittal, duly completed and validly executed, and such other documents as may be reasonably required pursuant to such instructions, the holder of such Certificate shall be entitled to receive cash in an amount equal to the number of shares of Company Capital Stock represented by such certificate multiplied by the Closing Price Per Series B-1 Share, Closing Price Per Series A-1 Share or the Closing Price Per Common Share, as appropriate (the “ Aggregate Closing Price Per Certificate ”), and the Certificate so surrendered shall forthwith be canceled. Until surrendered as contemplated by this Section 2.3, each Certificate that, prior to the Effective Time, represented shares of Company Capital Stock will be deemed from and after the Effective Time, to evidence the right only to receive the appropriate price per share for the shares of Company Capital Stock represented thereby multiplied by the number of such shares, without interest.

(b) Neither Parent nor the Surviving Corporation shall be liable to any holder of shares of Company Capital Stock for any amount properly delivered to a public official in compliance with any abandoned property, escheat or similar law.

(c) At the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers of shares of Company Capital Stock thereafter on the records of the Company. From and after the Effective Time, the holders of certificates representing shares of Company Capital Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares of Company Capital Stock, except as otherwise specifically provided in this Agreement or by law.

(d) If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact, in form and substance reasonably acceptable to Parent, by the Person claiming such Certificate to be lost, stolen or destroyed, and complying with such other conditions as Parent may reasonably impose (including the execution of an indemnification undertaking in favor of Parent with respect to the Certificate alleged to be lost, stolen or destroyed), Parent will deliver to such Person, the Aggregate Closing Price Per Certificate in respect of such lost, stolen or destroyed Certificate.

(e) If any holder of Dissenting Shares becomes entitled to receive payment for such shares pursuant to applicable law and Section 2.9 hereof, such payment will be made by the Surviving Corporation in accordance with Section 2.9 hereof.

2.4 Company Options/Company Warrants .

(a) Each unexercised Qualified Option outstanding immediately prior to the Effective Time for which a validly executed consent substantially in the form set forth in Exhibit D-1 hereto has been received prior to the Effective Time will be cancelled and extinguished and be converted into and become a right to receive an amount equal to (A) the Common Price Per Share in excess of the exercise price of such Qualified Option (the “ Option Spread ”) times (B) the number of shares of Company Common Stock for which such Qualified Option is exercisable. Each unexercised Qualified Option outstanding immediately prior to the Effective Time for which no validly executed consent has been received prior to the Effective Time shall remain a Qualified Option, exercisable in accordance with its terms, until such time as the holder thereof shall validly execute and deliver to Parent or to Surviving Corporation a consent, in form reasonably acceptable to Parent, electing to receive the consideration described in this Section 2.4(a), at which point, such Qualified Option shall be cancelled and extinguished and become a right to receive an amount equal to the Option Spread times the number of shares of Company Common Stock for which such Qualified Option is exercisable.

(b) Each unexercised Rolling Option outstanding immediately prior to the Effective Time will be cancelled and extinguished and there will be substituted in exchange therefor an option (“ Parent Rollover Option ”) to purchase such number of shares of common stock of Parent equal to the number of shares of Company Common Stock that were issuable upon exercise of each such Rolling Option immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole number of shares of the common stock of Parent), and the per share exercise price of the shares of common stock of the Parent issuable upon the exercise of such Parent Rollover Option will be equal to the exercise price per share of the Company Common Stock at which such Rolling Option was exercisable immediately prior to the Effective Time divided by the Exchange Ratio (rounded up to the nearest whole cent), with such substitution to be carried out in accordance with the requirements of Treasury Regulations, Section 1.424-1(a) and Section 409A of the Code (and all parties agree to report the substitution accordingly).

(c) Each unexercised Out-of-the-Money Option outstanding immediately prior to the Effective Time will be cancelled and extinguished without the right to receive any cash or other payment.

(d) Each unexercised Qualified Warrant outstanding immediately prior to the Effective Time will be canceled and extinguished and be converted into and become a right to receive an amount equal to (A) the Common Price Per Share in excess of the exercise price of such Qualified Warrant (the “ Warrant Spread ”) times (B) the number of shares of Company Common Stock for which such Qualified Warrant is exercisable, provided that , an amount equal to the product of (X) the Warrant Spread, times (Y) the Escrow Percentage (such amount to be referred to herein as the “ Per Warrant Escrow Amount ”) times (Z) the number of shares of Company Common Stock for which such Qualified Warrant is exercisable will be delivered to the Escrow Agent by Parent pursuant to Section 2.5 hereof. The difference between the Warrant Spread and the Per Warrant Escrow Amount is referred to herein as the “ Closing Price Per Warrant ”.

(e) Each unexercised Out-of-the-Money Warrant outstanding immediately prior to the Effective Time will be cancelled and extinguished without the right to receive any cash or other payment.

(f) As soon as practicable after the Effective Time, provided that prior to the Effective Time Parent has received a validly executed consent in the form attached hereto as Exhibit D-1 containing an election to receive the consideration described in Section 2.4(b) with respect to such Rolling Option, Parent will substitute a Parent Rollover Option for each Rolling Option, with such substitution to be carried out in compliance with the requirements of Treasury Regulations, Section 1.424-1(a) and Section 409A of the Code (and all parties agree to report the substitution accordingly). As soon as practicable after the Effective Time, but subject to any withholding tax requirement, the Surviving Corporation will pay to the holder of each Qualified Option an amount equal to (A) the Option Spread times (B) the number of shares of Company Common Stock for which each such Qualified Option was exercisable, without interest, provided, however , that no holder of a Company Option shall be entitled to receive the amount described in this sentence unless and until such holder has validly executed and delivered to Parent a consent substantially in the form attached hereto as Exhibit D-1 . As soon as practicable after the Effective Time, but subject to any withholding tax requirement and provided that the amendment described in Section 7.2(g) has been validly completed, the Surviving Corporation will pay to the holder of each Qualified Warrant an amount equal to (X) Closing Price Per Warrant times (Y) the number of shares of Company Common Stock for which such Qualified Warrant was exercisable, without interest. All other Company Options and Company Warrants, including all Out-of-the-Money Options and Out-of-the-Money Warrants, will be canceled as of the Effective Time without the right to receive any cash or other payment.

(g) Prior to the Effective Time, the Company will take all action that may be necessary (under the plans and agreements pursuant to which Company Options are outstanding, the agreements pursuant to which Company Warrants are outstanding and otherwise) to effectuate the provisions of this Section 2.4 and to ensure that, from and after the Closing Date, holders of Company Options and/or Company Warrants have no rights with respect thereto other than those specifically provided in this Section 2.4.

2.5 Escrow . An amount equal to $15,500,000 (the “ Escrow Amount ”) shall be deposited by Parent with U.S. Bank National Association, as escrow agent selected by Parent (the “ Escrow Agent ”), to be held in escrow (the “ Escrow Fund ”) in an account (the “ Escrow Account ”) pursuant to the terms of the Escrow Agreement (the “ Escrow Agreement ”) among Parent, the Stockholders’ Representative and the Escrow Agent in substantially the form attached hereto as Exhibit C . Distributions of any amounts from the Escrow Account shall be governed by the terms and conditions of the Escrow Agreement. Specific reference is made to (i) Section 5 of the Escrow Agreement, which shall govern the disbursement of funds from the Escrow Account to Parent for satisfaction of indemnification claims under Article IX hereof, (ii) Sections 6(a)-(b) of the Escrow Agreement, which shall govern the disbursement of funds from the Escrow Account to the holders of Company Capital Stock and Qualified Warrants following the 15-month anniversary of the Closing Date and (iii) Sections 6(c)-(d) of the Escrow Agreement which shall govern the disbursement of funds from the Escrow Account to the holders of Company Capital Stock and Qualified Warrants following the three-year anniversary of the Closing Date. The portion of the Escrow Amount contributed on behalf of each holder of Company Capital Stock or Qualified Warrants shall be the same proportion of the Escrow Amount equal to the aggregate amount of cash such holder would otherwise be entitled to receive under Section 2.2 hereof by virtue of such holder’s ownership of Company Capital Stock or Qualified Warrants to the total Merger Consideration received by all such holders. For the avoidance of doubt, Qualified Options and Rolling Options (and the respective Parent Rollover Options) shall not be subject to the Escrow Fund.

2.6 Adjustment of Shares . If, during the period between the date of this Agreement and the Effective Time, any change in the number, classes or series of outstanding shares of Company Capital Stock shall occur, including by reason of any reclassification, recapitalization, stock dividend, stock split or combination, exchange or readjustment of such shares of Company Capital Stock, or any stock dividend thereon with a record date during such period, the Series B-1 Price Per Share, the Series A-1 Price Per Share, the Common Price Per Share, the Option Spread, the Warrant Spread and the respective Per Share Escrow Amounts or Per Warrant Escrow Amounts for each of the foregoing, and any other amounts payable pursuant to this Agreement, as the case may be, shall be appropriately adjusted.

2.7 Merger Consideration . Notwithstanding anything to the contrary contained in this Agreement, the aggregate value delivered by Parent pursuant to this Agreement (the “ Merger Consideration ”) shall not exceed $155,000,000 less the Transaction Expenses.

2.8 Tax Withholding . Each of the Surviving Corporation, Parent and Escrow Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Company Capital Stock, Company Option or Company Warrant such amounts as it is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “ Code ”), or any provision of state, local or foreign Tax law. To the extent that amounts are so withheld by the Surviving Corporation, Parent or Escrow Agent, as the case may be, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to such holder in respect of which such deduction and withholding was made by the Surviving Corporation, Parent or Escrow Agent, as the case may be. To the extent any such amount is withheld, the Surviving Corporation, Parent or Escrow Agent, as applicable, shall pay such withheld amount to the appropriate Governmental Entity/Entities on a timely basis and shall indemnify and hold harmless any holder of Company Capital Stock, Company Options or Company Warrants for the payment of any such withheld amount.

2.9 Dissenting Shares .

(a) Notwithstanding anything in this Agreement to the contrary, if Section 262 of the DGCL is applicable to the Merger, shares of Series B-1 Preferred Stock, Series A-1 Preferred Stock and Company Common Stock that are issued and outstanding immediately prior to the Closing Date and which are held by stockholders who have not executed a written consent approving the Merger, who will have delivered a written demand for the appraisal of such shares in the manner provided in Section 262 of the DGCL and who, as of the Closing Date, will not have effectively withdrawn or lost such right to dissenters’ rights (“ Dissenting Shares ”) shall not, upon the Closing, be converted into or represent a right to receive the Merger Consideration pursuant to Section 2.2 hereof, but the holders thereof shall be entitled only to such rights as are granted by Section 262 of the DGCL. Each holder of Dissenting Shares who becomes entitled to payment for such shares pursuant to Section 262 of the DGCL shall receive payment therefor from the Surviving Corporation in accordance with the DGCL.

(b) The Company will give Parent (i) prompt notice of any written demand for appraisal, any withdrawal of a demand for appraisal and any other instrument served pursuant to Section 262 of the DGCL received by the Company and (ii) the opportunity to participate, in consultation with the Company, in all negotiations and proceedings with respect to demands for appraisal under such Section 262 of the DGCL. The Company will not, except with the prior written consent of Parent, voluntarily make any payment with respect to any demand for appraisal or offer to settle or settle any such demand.

2.10 Post-Closing Adjustment to Purchase Price .

(a) The “ Measurement Date ” shall be the later to occur of (i) November 30, 2007 and (ii) the last business day of the month in which the Closing Date occurs. Within 60 days after the Measurement Date, Parent will prepare and deliver to Stockholders’ Representative a consolidated balance sheet (the “ Measurement Date Balance Sheet ”) for the Surviving Corporation and the Subsidiaries as of the close of business on the Measurement Date (determined on a stand alone basis without giving effect to the transactions contemplated by this Agreement, in accordance with GAAP applied on a basis consistent with the preparation of the Latest Financial Statements). The Measurement Date Balance Sheet will include a determination of the Measurement Date Net Assets of the Surviving Corporation and the Subsidiaries as of the close of business on the Measurement Date. “ Measurement Date Net Assets ” means the excess of total assets over total liabilities shown on the Measurement Date Balance Sheet. Parent will make the workpapers and back-up materials used in preparing the Measurement Date Balance Sheet available to Stockholders’ Representative and Stockholders’ Representative’s accountants and other representatives at reasonable times and upon reasonable notice during (i) the review by Stockholders’ Representative of the Measurement Date Balance Sheet and (ii) the resolution by Parent and Stockholders’ Representative of any objections to the Measurement Date Balance Sheet.

(b) Stockholders’ Representative may object to the Measurement Date Balance Sheet on the basis that it was not prepared in accordance with GAAP applied on a basis consistent with the preparation of the Latest Financial Statements or that the calculation of Measurement Date Net Assets contains mathematical errors. If Stockholders’ Representative has any objections to the Measurement Date Balance Sheet or the Measurement Date Net Assets, Stockholders’ Representative will deliver a detailed statement describing such objections (the “ Statement of Objection ”) to Parent within 20 days after receiving the Measurement Date Balance Sheet. Parent and Stockholders’ Representative will attempt in good faith to resolve any such objections. If Parent and Stockholders’ Representative do not reach a resolution of all objections within 30 days after Parent has received the Statement of Objection, Parent and Stockholders’ Representative will select a mutually acceptable independent accounting firm (the “ Independent Accountant ”) to resolve any remaining objections. If Parent and Stockholders’ Representative are unable to agree on the choice of an accounting firm, they will select a nationally recognized accounting firm by lot (after excluding the regular outside accounting firms of Parent and the Company). The selected Independent Accountant will resolve any such objections and determine, in accordance with GAAP applied on a basis consistent with the preparation of the Latest Financial Statements, the amounts to be included in the Measurement Date Balance Sheet and the Measurement Date Net Assets. The parties will provide the Independent Accountant, within 10 days of its selection, with a definitive statement of the position of each party with respect to each unresolved objection and will advise the Independent Accountant that the parties accept the Independent Accountant as the appropriate Person to interpret this Agreement for all purposes relevant to the resolution of the unresolved objections. Parent will provide the Independent Accountant access to the books, records and personnel of each of the Company and the Subsidiaries. The Independent Accountant will have 30 days to carry out a review of the unresolved objections and prepare a written statement of its determination regarding each unresolved objection. The determination of any Independent Accountant so selected will be set forth in writing and will be conclusive and binding upon the parties. Parent will revise the Measurement Date Balance Sheet and the determination of the Measurement Date Net Assets as appropriate to reflect the resolution of any objections to the Measurement Date Balance Sheet pursuant to this Section 2.10.

(c) If Parent and Stockholders’ Representative submit any unresolved objections to the Independent Accountant for resolution as provided in this Section 2.10, Parent and Stockholders’ Representative will each bear their respective costs and expenses and will share equally in the fees and expenses of the Independent Accountant.

(d) If the Measurement Date Net Assets as finally determined is less than the Latest Balance Sheet Net Assets Amount, then, within 10 business days after the date on which the Measurement Date Net Assets is finally determined pursuant to this Section 2.10, an amount equal to the difference between (x) the Measurement Date Net Assets as finally determined and (y) Latest Balance Sheet Net Assets Amount will be withdrawn by the Escrow Agent from the Escrow Account and paid to Parent. “ Latest Balance Sheet Net Assets Amount ” means $11,157,000.

(e) Any payment made pursuant to this Section 2.10 will not preclude any remedy provided in this Agreement or otherwise for any breach of representation, warranty or agreement, and the remedy provided in this Agreement for any breach of representation, warranty or agreement or otherwise will not preclude the adjustment provided in this Section 2.10.

(f) Judgment upon the award rendered by the accounting firm may be entered in any court of competent jurisdiction.

(g) Parent agrees that, during the period commencing on the Closing Date and ending on the Measurement Date, it will not take any action specifically designed to impair the Measurement Date Net Assets and has the primary purpose of causing an adjustment pursuant to Section 2.10(d) hereof. The Company, however, acknowledges that the transactions contemplated in this Agreement constitute a transfer of control to Parent and that, following the Closing Date, Parent and its representatives will exercise their business judgment regarding the operations of the Surviving Corporation in a manner consistent with Parent’s duties to its shareholders.

Article III

Representations and Warranties of the Company

The Company hereby represents and warrants to Parent, and acknowledges that Parent is relying upon the following representations and warranties, that, except as set forth in the Disclosure Schedule:

3.1 Incorporation; Corporate Power and Authority .

(a) Each of the Company and the Subsidiaries is a corporation duly incorporated (or the equivalent for those Subsidiaries in foreign jurisdictions), validly existing, duly registered (in each case, if applicable) and in good standing under the laws of the jurisdiction of its organization and has all requisite corporate power and authority necessary to carry on its business as now being conducted and to own, lease and operate its assets. The Company and each of the Subsidiaries is duly qualified as a foreign corporation to do business in every jurisdiction in which the nature of its business or its ownership of property requires it to be so qualified, except for those jurisdictions in which the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect (as defined below). Section 3.1 of the Disclosure Schedule sets forth a true and complete list, by corporation, of all jurisdictions in which the Company and each of the Subsidiaries is qualified and in good standing, if applicable. As used herein, the term “ Material Adverse Effect ” means any change, effect, event or condition that (i) has had or could, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, assets (including intangible assets), results of operations, or condition (financial or otherwise), of the Company and its Subsidiaries, taken as a whole, or on the ability of the Company and its Subsidiaries, taken as a whole, to materially achieve the Company’s revenue projections, recorded on a GAAP basis, pertaining to the calendar year ending December 31, 2007, as delivered to Parent on July 19, 2007, other than any such change, effect, event or condition that results or arises from (A) changes or conditions affecting the industry in which the Company markets its products and services generally, except to the extent such changes or conditions materially disproportionately affect the Company and the Subsidiaries, taken as a whole, (B) changes in general economic, regulatory or political conditions, except to the extent such changes or conditions materially disproportionately affect (relative to other participants in the industry in which the Company markets its products and services) the Company and the Subsidiaries, taken as a whole, (C) changes in GAAP, (D) any change, effect, event or condition exclusively relating to any acts of terrorism, sabotage, military action or war or (E) any change, effect, event or condition arising solely and directly out of the execution, delivery, performance or disclosure of this Agreement or the transactions contemplated hereby, including any impact thereof on relationships, contractual or otherwise, with customers, suppliers or distributors, and that would not have resulted or arisen in the absence of such execution, delivery, performance (in accordance with its terms) or disclosure (excluding from this subsection (E) all changes, effects, events or conditions that existed prior to the date hereof), or (ii) would prevent or materially delay the Company’s ability to consummate the Merger or the other transactions contemplated hereby.

(b) Neither the Company nor any Subsidiary is in violation of any of the provisions of its Certificate of Incorporation or other applicable charter document (any such document hereinafter referred to as its “ Charter Documents ”) or Bylaws or other applicable governing document (any such documents hereinafter referred to as its “ Governing Documents ”). The Company has made available to Parent in the electronic data room hosted by DLA Piper and known as “Project Red Wings” (the “ Data Room ”), accurate and complete copies of the respective Charter Documents and Governing Documents, as currently in effect, of each of the Company and the Subsidiaries.

3.2 Subsidiaries . The Company is the record and beneficial owner of the outstanding shares of capital stock of each of the entities listed (and in the amount and ownership percentage shown) in Section 3.2(a) of the Disclosure Schedule (each such entity, a “ Subsidiary ” and together, the “ Subsidiaries ”). The Company maintains the branch offices and representative offices listed in Section 3.2(b) of the Disclosure Schedule. Each Subsidiary, branch office and representative office has complied in all material respects with the laws of each jurisdiction in which such Subsidiary, branch office or representative office operates. Neither the Company nor any of its Subsidiaries owns, controls or holds with the power to vote, directly or indirectly, of record, beneficially or otherwise, any capital stock or any equity or ownership interests in any corporation, partnership, association, joint venture or other entity, except for the Subsidiaries. All of the outstanding shares of capital stock and all equity or other interests of each of the Company’s Subsidiaries have been duly authorized and are validly issued, fully paid and nonassessable and were not issued in violation of any preemptive rights or comparable rights. There are no proxies or similar obligations with respect to any interest in each Subsidiary and all interests in each Subsidiary are owned by the Company or another Subsidiary of the Company in each instance free and clear of all Liens with respect thereto.

3.3 Capitalization .

(a) The authorized capital stock of the Company consists of 190,792,791 shares of capital stock, of which 143,000,000 shares are designated as Company Common Stock and 47,792,791 shares are designated preferred stock, par value $0.0001 per share. 31,126,125 shares of Series A-1 Preferred Stock are issued and outstanding; 16,480,768 shares of Series B-1 Preferred Stock are issued and outstanding; and 31,777,493 shares of Company Common Stock are issued and outstanding. The Company has no other securities outstanding that are or would be entitled to vote on the transactions contemplated by this Agreement. The issued and outstanding shares of Company Capital Stock are duly authorized, validly issued, fully paid and nonassessable, and are free of preemptive rights or any other third party rights. All issued and outstanding shares of Company Capital Stock have been offered, sold and delivered by the Company in compliance with all federal and state securities and state blue sky laws. No shares of the Company Capital Stock have been issued in violation of any preemptive rights, rights of first refusal or similar rights. The rights and privileges of each class of Company Capital Stock are set forth in the Company’s Certificate of Incorporation.

(b) As of the date of this Agreement, Company Options with respect to 13,514,885 shares of Company Common Stock are outstanding. Section 3.3(b) of the Disclosure Schedule lists, as of the date hereof, (i) the name of each holder of an outstanding Company Option, (ii) such holder’s address per the Company’s records, which, to the Company’s knowledge of such matter, are complete and correct, (iii) whether such holder is an employee of the Company and, with respect to each Company Option held, (iv) the date of grant of such Company Option, (v) the number of shares of Company Common Stock subject to such Company Option, (vi) the exercise price of such Company Option, (vii) the vesting schedule (and any provisions for acceleration or deferral of vesting) for such Company Option, (viii) the extent vested as of the date of this Agreement and (ix) whether such Company Option is an “incentive stock option.” All issued and outstanding Company Options have been offered, sold and delivered by the Company in compliance with all federal and state securities and state blue sky laws.

(c) As of the date of this Agreement, Company Warrants with respect to 15,673,551 shares of Company Common Stock are outstanding. Section 3.3(c) of the Disclosure Schedule lists, as of the date hereof, (i) the name of each holder of an outstanding Company Warrant, (ii) such holder’s address per the Company’s records, which, to the Company’s knowledge of such matter, are complete and correct, (iii) the number of shares of Company Common Stock subject to such Company Warrant, (iv) the exercise price of such Company Warrant and (v) the expiration date of such Company Warrant. All issued and outstanding Company Warrants have been offered, sold and delivered by the Company in compliance with all federal and state securities and state blue sky laws.

(d) All shares of Company Common Stock issuable upon exercise of the Company Options and Company Warrants have been offered in compliance with all federal and state securities and state blue sky laws and, upon issuance in accordance with their terms, will be duly authorized, validly issued, fully paid and nonassessable and will be free of preemptive rights or any other third party rights.

(e) Each Company Option (i) has been granted in accordance with the terms of the applicable Company stock option plan and the relevant stock option agreement, (ii) has been granted with an exercise price at least equal to the fair market value of the Company Common Stock on the grant date, and (iii) has a grant date that is the date the option would be considered granted for tax, corporate law and under generally accepted accounting principles (that is, no Company Option has been “backdated”).

(f) Except for the Company Options and Company Warrants listed in Sections 3.3(b) and 3.3(c) of the Disclosure Schedule, the Series A-1 Preferred Stock and the Series B-1 Preferred Stock and the Convertible Notes, there is no option, warrant, call, subscription, convertible security, right (including preemptive right) or Contract of any character to which the Company is a party or by which it is bound obligating the Company to issue, exchange, transfer, sell, repurchase, redeem or otherwise acquire any capital stock of the Company or obligating the Company to grant, extend, accelerate the vesting of or enter into any such option, warrant, call, subscription, convertible security, right or Contract. There are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Company. Except as contemplated by this Agreement, the Company is not a party to, and, to the Company’s knowledge, no stockholder of the Company is party to, any registration rights agreements, voting trust, proxy or other Contract pertaining to the capital stock of the Company and no restrictions on transfer with respect to any capital stock of the Company exist. The share registers and the transfer of shares of the Company, copies of which have been made available to Parent in the Data Room prior to the date hereof, are up-to-date, complete and correct.

3.4 Execution, Delivery; Valid and Binding Agreement . The Company has all requisite corporate power and authority to execute and deliver, and perform its obligations under, this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action and, other than the approval and adoption of this Agreement and the Merger by the holders of Company Capital Stock in accordance with the Company’s Charter Documents and the DGCL as set forth in Section 3.26 (the “ Required Stockholder Vote ”), no other corporate proceedings on the Company’s part are necessary to authorize the execution, delivery or performance of this Agreement. This Agreement has been duly and validly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, and the other documents contemplated hereby, when executed and delivered by the Company, will constitute the valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, in each case except to the extent that their enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

3.5 No Violations, etc. The execution, delivery and performance of this Agreement by the Company does not and the consummation of the transactions contemplated hereby will not: (a) contravene any provision of the Certificate of Incorporation or Bylaws of the Company; (b) violate or conflict in any material respect with any federal, state, local or foreign law or any decree, writ, injunction, judgment or order of any court or administrative or other governmental body or of any arbitration award which is either applicable to, binding upon or enforceable against the Company or any of the Subsidiaries, or the business or any assets of the Company or any of the Subsidiaries; (c) conflict in any material respect with or result in any material breach of any of the provisions of, or constitute a material default (or any event which would, with the passage of time or the giving of notice or both, constitute a material default) under, result in a material violation of, result in the creation of a right of termination, amendment, modification, abandonment or acceleration under any indenture, hypothecation, mortgage, lease, license, loan agreement or other material agreement or instrument which is either binding upon or enforceable against the Company or any of the Subsidiaries; (d) result in the creation of any charge, claim, easement, covenant, equitable interest, option, lien, pledge, security interest, encumbrance, right of first refusal, restrictions of any kind, including on voting, transfer, receipt of income or exercise of any other attribute of ownership (each, without reference to materiality, a “ Lien ” and together, the “ Liens ”) that is material upon the Company or any of the Subsidiaries or any of the assets of the Company or any of the Subsidiaries; or (e) require any authorization, consent, approval, exemption or other action by or notice to any federal, state, local, foreign, international or multinational entity or authority exercising executive, legislative, judicial, regulatory, administrative or taxing functions of or pertaining to government (each, a “ Governmental Entity ”) or any other third party, other than (i) in connection with the applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder (the “ HSR Act ”), and any other comparable foreign merger or competition laws listed in Section 3.5 of the Disclosure Schedule, (ii) such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable federal or state securities laws, (iii) consents set forth in Section 3.5 of the Disclosure Schedule.

3.6 Financial Statements .

(a) The Company has delivered to Parent true and complete copies of (i) the audited consolidated balance sheets, as of December 31, 2005 and December 31, 2006, of the Company and the audited statements of operations, mandatory redeemable convertible preferred stock and stockholders’ equity and cash flows of the Company for the years ended December 31, 2005 and December 31, 2006 (collectively, the “ Annual Financial Statements ”), and (ii) the unaudited consolidated balance sheet, as of June 30, 2007, of the Company (the “ Latest Balance Sheet ”) and the unaudited consolidated statements of operations of the Company for the six-month period ended June 30, 2007 (such unaudited statements and the Latest Balance Sheet being herein referred to as the “ Latest Financial Statements ”).

(b) The Annual Financial Statements and the Latest Financial Statements are based upon the information contained in the books and records of the Company and the Subsidiaries and fairly present in all material respects the financial condition of the Company and the Subsidiaries as of the dates thereof and results of operations for the periods referred to therein. The Annual Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“ GAAP ”). The Latest Financial Statements have been prepared on a basis consistent with the Annual Financial Statements and in accordance with GAAP applicable to unaudited interim financial statements (and thus may not contain all notes and may not contain prior period comparative data which are required in order for such financial statements to be prepared in accordance with GAAP), and reflect all adjustments necessary to a fair statement of the results for the interim period(s) presented (except for normally recurring year-end adjustments).

(c) Section 3.6(c) of the Disclosure Schedule lists, and the Company has made available to Parent in the Data Room copies of the documentation creating or governing, all securitization transactions and “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K adopted by the Securities and Exchange Commission (the “ SEC ”)) effected by the Company or the Subsidiaries since January 1, 2006.

(d) Since January 1, 2006, no fraud, whether or not material, that involves management or other employees who have a significant role in the preparation of financial reports of the Company and the Subsidiaries, as a whole, has been disclosed to the Company’s auditors, Board of Directors or executive management.

3.7 Absence of Undisclosed Liabilities . Neither the Company nor any Subsidiary has any liabilities (whether accrued, absolute, contingent, unliquidated, asserted, unasserted or otherwise, and whether due or to become due, and whether known or unknown), arising out of transactions or events heretofore entered into, or any action or inaction, or any state of facts existing, with respect to or based upon transactions or events heretofore occurring, except (i) as reflected in the Latest Balance Sheet, (ii) which has arisen after the date of the Latest Balance Sheet (the “ Balance Sheet Date ”) in the ordinary course of business (none of which is a material uninsured liability for breach of contract, breach of warranty, tort, infringement, claim or lawsuit) or (iii) for any liability disclosed as such by any section of the Disclosure Schedule.

3.8 Absence of Certain Developments . Since the Balance Sheet Date, there has been no change in the Company or any Subsidiary which change has had or, with the passage of time, is reasonably likely to have, a Material Adverse Effect and, except for actions specifically described in or contemplated by this Agreement, including the Exhibits thereto and any documents delivered at Closing pursuant to this Agreement, neither the Company nor any Subsidiary has:

(a) borrowed any amount (including advances on existing credit facilities) or incurred or become subject to any liability in excess of $500,000 individually, or $1,000,000 in the aggregate, except (i) current liabilities incurred in the ordinary course of business and (ii) liabilities under contracts entered into in the ordinary course of business;

(b) hypothecated, mortgaged, pledged or subjected to any Lien, any of its assets with a fair market value in excess of $500,000 individually, or $1,000,000 in the aggregate, except (i) Liens for current property taxes not yet due and payable, (ii) Liens imposed by law and incurred in the ordinary course of business for obligations not yet due to carriers, warehousemen, laborers, materialmen and the like, (iii) Liens in respect of pledges or deposits under workers’ compensation laws or (iv) Liens set forth in Section 3.8 of the Disclosure Schedule (collectively, the “ Permitted Liens ”);

(c) sold, assigned or transferred (including transfers to any employees, affiliates or stockholders) any tangible assets of its business with a value in excess of $100,000, except sales of inventory in the ordinary course of business, or canceled any debts or claims, except in the ordinary course of business;

(d) sold, assigned, transferred or granted (including transfers to any employees, affiliates or stockholders) any licenses, patents, trademarks, trade names, domain names, copyrights, trade secrets or other intangible assets, other than licenses granted on a non-exclusive basis in conjunction with the sale of product in the ordinary course of business;

(e) disclosed, to any Person other than Parent and authorized representatives of Parent, any proprietary confidential information, other than pursuant to a confidentiality agreement limiting the use or further disclosure of such information, which agreement is in full force and effect on the date hereof;

(f) waived any rights of material value or suffered any extraordinary losses or material adverse changes in collection loss experience, whether or not in the ordinary course of business or consistent with past practice;

(g) issued, sold or transferred any of its equity securities, securities convertible into or exchangeable for its equity securities or warrants, options or other rights to acquire its equity securities, or any bonds or debt securities other than pursuant to instruments listed in Section 3.3 of the Disclosure Schedule;

(h) taken any other action or entered into any other transaction other than in the ordinary course of business, or entered into any transaction with any Insider (as defined in Section 3.21 hereof) other than employment arrangements otherwise disclosed in this Agreement and the Disclosure Schedule, or the transactions contemplated by this Agreement;

(i) suffered any material theft, damage, destruction or loss of or to any property or properties owned or used by it, whether or not covered by insurance;

(j) entered into or modified any employment, severance or similar agreements or arrangements with, or granted any bonuses, salary or benefits increases, severance or termination pay to, any employee other than in the ordinary course of business and consistent with past practice, or to any officer or consultant;

(k) adopted or amended any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, trust, fund or group arrangement for the benefit or welfare of any employees, officer, director or affiliate;

(l) made any capital expenditure or commitment therefor in excess of $100,000 individually, or $500,000 in the aggregate;

(m) made any loans or advances to, or guarantees for the benefit of, any Affiliates;

(n) made any material loans or advances to, or guarantees for the benefit of, any Persons, other than in the ordinary course of business, consistent with past practice;

(o) acquired (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership, limited liability company, joint venture or other business organization or division or material assets thereof;

(p) made any charitable pledges the amount remaining to be paid of which individually or in the aggregate exceeds $100,000; or

(q) made any change in any Tax or financial accounting methods, principles, practices, periods or elections from those utilized in the preparation of the most recently filed Tax Returns (as defined in Section 3.12(l)) or in the Annual Financial Statements, except as required by GAAP, the statutory accounting principles and practices prescribed or permitted by the domiciliary state of the relevant Person, or applicable Tax law.

3.9 Title to Properties .

(a) Neither the Company nor any Subsidiary owns any real property. The real property covered by the leases (the “ Leases ”) described in Section 3.9 of the Disclosure Schedule constitutes all of the real property rented, used or occupied by the Company and the Subsidiaries (the “ Real Property ”). The Real Property has access, sufficient for the conduct of the Company’s and the Subsidiaries’ business as now conducted, to public roads and to all necessary utilities.

(b) The Leases are in full force and effect and the Company and each Subsidiary, as applicable, holds a valid and existing leasehold interest under each of the respective Leases. The Company has made available to Parent in the Data Room complete and accurate copies of each of its Leases, and none of the Leases has been modified in any respect, except to the extent that such modifications are disclosed by the copies made available to Parent in the Data Room. Neither the Company nor any Subsidiary is in default under any of its Leases and no circumstances exist which, if unremedied, would, either with or without notice or the passage of time or both, result in such default under any of the Leases; nor, to the knowledge of the Company, is any other party to any of the Leases in default thereunder.

(c) The Company or one of the Subsidiaries owns good and marketable title to each of the tangible properties and tangible assets reflected on the Latest Balance Sheet or acquired since the date thereof, free and clear of all Liens, except for (i) Liens for current Taxes not yet due and payable, (ii) the Real Property subject to the Leases, (iii) personal property used by the Company and subject to lease, and (iv) assets disposed of since the Balance Sheet Date.

(d) All of the buildings, machinery, equipment and other tangible assets that are necessary for the conduct of the Company’s and the Subsidiaries’ business are in good condition and repair, ordinary wear and tear excepted with respect to all of such assets, and are usable in the ordinary course of business. The Company and the Subsidiaries own, or lease under valid leases, all buildings, machinery, equipment and other tangible assets necessary for the conduct of their business as currently conducted.

(e) Neither the Company nor any Subsidiary has received any notice of any material violation of any material applicable zoning ordinance or other law, regulation or requirement relating to the operation of any properties used in the operation of its business.

(f) Neither the Company nor any Subsidiary has knowledge of improvements made or contemplated to be made by any public or private authority, the costs of which are to be assessed as special Taxes or charges against any of the Real Property, and there are no present assessments.

3.10 Accounts Receivable . The accounts receivable reflected on the Latest Balance Sheet are valid receivables, have arisen from bona fide transactions in the ordinary course of business, are not subject to valid counterclaims or setoffs, and, to the Company’s knowledge, are collectible in accordance with their respective terms.

3.11 Inventory . The Company’s and each Subsidiary’s inventory of raw materials, work in process and finished products relating to its business, subject to any applicable reserves reflected on the Latest Balance Sheet and that would normally occur at the end of the applicable quarter consistent with past practices, consists of items in all material respects of a quality and quantity usable and, with respect to finished products only, salable in the ordinary course of its business.

3.12 Tax Matters .

(a) Each of the Company and each of the Subsidiaries and any affiliated, combined or unitary group for federal or state income tax or franchise Tax purposes of which any of the Company or the Subsidiaries is a member (each of such Subsidiaries or group, a “ Tax Affiliate ” and, collectively, the “ Tax Affiliates ”), has: (i) timely filed (or has had timely filed on its behalf) all material Tax Returns required to be filed or sent by it in respect of any Taxes due or payable on or prior to the date hereof or required to be filed or sent by it by any taxing authority having jurisdiction, which Tax Returns are true and correct in all material respects and have been completed in material compliance with applicable law; (ii) timely and properly paid (or has had paid on its behalf) all material Taxes payable in respect of the Company and its Tax Affiliates, whether or not shown on such Tax Returns; and (iii) materially complied with all applicable laws relating to the withholding of Taxes and the payment thereof (including withholding of Taxes under Sections 1441 and 1442 of the Code, or similar provisions under any foreign laws) to the proper taxing authority.

(b) There are no Liens for Taxes upon any assets of the Company or any Tax Affiliate, except Liens for Taxes not yet due or Taxes being contested in good faith.

(c) No deficiency for any material Taxes has been proposed, asserted or assessed against the Company or any of the Tax Affiliates, in each case in writing sent to the Company or a Tax Affiliate or in an oral statement made by the proper taxing authorities to the Company or a Tax Affiliates, that has not been resolved and paid in full. No waiver, extension or comparable consent given by the Company or the Tax Affiliates regarding the application of the statute of limitations or the period for assessment or reassessment with respect to any Taxes or Tax Returns is outstanding, nor is any request for any such waiver or consent pending. There has been no Tax audit or other administrative proceeding or court proceeding with regard to any Taxes or Tax Returns, nor is any such Tax audit or other proceeding pending, nor has any notice to the Company in writing or otherwise to the knowledge of the Company from any taxing authority regarding any such Tax, audit or other proceeding, or, to the knowledge of the Company, is any such Tax audit or other proceeding threatened with regard to any Taxes or Tax Returns.

(d) Neither the Company nor any Tax Affiliate is a party to any agreement, contract or arrangement that would result, separately or in the aggregate, in any payments in connection with Closing that would constitute “excess parachute payments” within the meaning of Section 280G of the Code.

(e) Neither the Company nor any Tax Affiliate has requested or been granted any extension of time within which to file any Tax Return, which Tax Return has not since been filed.

(f) The Company and any Tax Affiliate have made available to Parent in the Data Room copies of all federal and state income Tax Returns for all periods since January 1, 2005 and all state sales and use Tax Returns for all periods since January 1, 2007.

(g) Neither the Company nor any Tax Affiliate has been a member of an affiliated group (within the meaning of Code Section 1504(a)) filing a consolidated federal income Tax Return or a combined or unitary state income Tax Return (other than a group the common parent of which was the Company). Neither the Company nor any Tax Affiliate is presently liable, nor does the Company or any Tax Affiliate have any potential liability, for the Taxes of another person under Treasury Regulations Section 1.1502-6 (or comparable provision of state, local or foreign law), as transferee or successor, or by contract, indemnity or otherwise.

(h) Neither the Company nor any Tax Affiliate is a party to any Tax sharing, indemnification or allocation agreement.

(i) Neither the Company nor any Subsidiary constitutes either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of shares qualifying for tax-free treatment under Section 355 of the Code (i) which took place during the two year period ending on the date of this Agreement or (ii) that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the Merger.

(j) Neither the Company nor any Tax Affiliate has engaged in any transaction that is a listed transaction pursuant to Treasury Regulations Sections 1.6011-4.

(k) No claim has ever been made, in writing or otherwise to the knowledge of the Company or any Subsidiary, by a taxing authority or other Governmental Entity in a jurisdiction where the Company or the Tax Affiliates do not file Tax Returns that they, individually or collectively, are or may be subject to taxation by that jurisdiction.

(l) For purposes of this Agreement, the term “ Tax ” or “ Taxes ” means all taxes, charges, fees, levies, or other assessments, including all net income, gross income, gross receipts, sales, use, ad valorem, value-added tax (VAT), transfer, franchise, profits, license, withholding, payroll, employment, social security, unemployment, disability, workers’ compensation, excise, estimated, severance, stamp, occupation, property, goods and services tax (GST) or other taxes, customs duties, premiums, contributions, fees, assessments, or charges, including all interest and penalties thereon, and additions to Tax or additional amounts in each case imposed by any taxing authority, domestic or foreign, upon either the Company or any Tax Affiliate (whether disputed or not). “ Tax Returns ” means all returns, declarations, reports, estimates, information returns, and statements required to be filed or sent in respect of any Taxes.

3.13 Contracts and Commitments .

(a) Section 3.13 of the Disclosure Schedule lists the following contracts, commitments and/or binding understandings, whether oral or written, to which the Company or any Subsidiary is a party, which are in effect as of the date hereof (the “ Contracts ”):

(i) all employment or consulting agreements, all contracts or commitments providing for severance, termination or similar payments, including on a change of control of the Company, and all union, collective bargaining or similar agreements with labor representatives;

(ii) all distributor, reseller, OEM, dealer, manufacturer’s representative, sales agency or advertising agency, finder’s and manufacturing or assembly contracts;

(iii) all material contracts terminable by any other party thereto upon a change of control of the Company or any Subsidiary or upon the failure of the Company or any Subsidiary to satisfy financial or performance criteria specified in such contract as provided therein;

(iv) all leases of tangible personal property with aggregate annual payments in excess of $100,000 per year;

(v) all contracts between or among the Company, any Subsidiary, any holder of Company Capital Stock or any affiliate of such holder, any director, officer or employee of the Company or any Subsidiary or any member of his or her immediate family or any entity affiliated with any such Person relating in any way to the Company or any Subsidiary (to the extent not otherwise disclosed in Section 3.21 of the Disclosure Schedule);

(vi) all contracts relating to the performance and payment of any surety bond or letter of credit required to be maintained by the Company or any Subsidiary;

(vii) all contracts obligating the Company, directly or indirectly, to guarantee the payment or performance of any other Person;

(viii) all confidentiality or non-disclosure agreements, other than confidentiality or non-disclosure agreements executed in connection with the sale of products or services in the ordinary course of business;

(ix) all agreements or indentures relating to the borrowing of money or otherwise placing a material mortgage, pledge or other Lien on any of the assets of the Company or any Subsidiary;

(x) all contracts or group of related contracts with the same party for the purchase of products or services under which the undelivered balance of such products or services is in excess of $250,000;

(xi) all contracts or group of related contracts with the same party for the sale of products or services under which the undelivered balance of such products or services has a sales price in excess of $500,000;

(xii) all contracts containing exclusivity, noncompetition or nonsolicitation provisions or which would otherwise prohibit the Company or any Subsidiary from freely engaging in business anywhere in the world; and

(xiii) all license agreements, transfer or joint-use agreements or other agreements providing for the payment or receipt of royalties, license, or similar fees by the Company or any Subsidiary on or after the date of signing of this Agreement in connection with the Company Intellectual Property (as defined in Section 3.14(a) hereof) except for (A) purchase, lease, maintenance and support agreements for computer systems, (B) so-called “off-the-shelf” and “shrink-wrap” license agreements for generally available software other than any such software that is included in any product of the Company or any Subsidiary or that is otherwise distributed by the Company or any Subsidiary, (C) agreements described in the Disclosure Schedules under Section 3.14(b), and (D) non-exclusive licenses to customers in connection with providing products and services in the ordinary course of business;

(xiv) any and all other contracts or commitments for capital expenditures with an amount remaining to be paid in excess of $100,000; and

(xv) all agreements for the sale of any capital assets with an amount remaining to be paid in excess of $100,000 (other than agreements for sales made by the Company in the ordinary course of business).

(b) The Company or the applicable Subsidiary has performed in all material respects all obligations required to be performed by it as of the date hereof in connection with the Contracts and is not in receipt of any claim of default under any such Contract and, to the Company’s knowledge, no such claim is threatened. Neither the Company nor any Subsidiary has a present expectation or intention of not fully performing any material obligation pursuant to any Contract. The Company has no knowledge of any breach or anticipated breach by any other party to any Contract. The Company has no knowledge that any existing contracts or subcontracts with the Company’s or any Subsidiary’s customers cannot be fully performed by the Company or the applicable Subsidiary. Neither the Company nor any Subsidiary has any obligation to refund payments received for work not yet performed under contracts where the percentage of work completed is less than the percentage of revenues received to date.

(c) Prior to the date of this Agreement, the Company has made available to Parent in the Data Room a true and complete copy of each written Contract, and a written description of each oral Contract, together with all material amendments, waivers or other changes thereto.

3.14 Intellectual Property Rights .

(a) “ Intellectual Property ” means all patents, patent rights, trademarks, trademark rights, industrial designs, industrial design rights, trade names, trade name rights, service marks, service mark rights, domain names, copyrights, maskworks, and any applications for any of the foregoing, schematics, inventions, technology, know-how, trade secrets, ideas, algorithms, processes, computer software programs or applications (in both source code and object code form), database, and tangible or intangible proprietary or confidential information. Except as would not have a Material Adverse Effect, the Company, together with the Subsidiaries, owns, licenses or otherwise possesses rights to the Intellectual Property that is necessary to operate the business of the Company and the Subsidiaries as it is currently conducted and, to the knowledge of the Company, to operate the business of the Company and the Subsidiaries as it is currently proposed by the Company to be conducted (collectively, “ Company Intellectual Property ”).

(b) Section 3.14(b) of the Disclosure Schedule lists (i) all patents and patent applications and all registered trademarks and trademark applications, all registered industrial designs and industrial design applications, registered trade names, registered service marks and service mark applications, domain names and all registered copyrights owned by the Company or any Subsidiary, including the jurisdictions in which each such Intellectual Property right has been issued or registered or in which any application for such issuance and registration has been filed (the “ Registered Intellectual Property ”), (ii) all material licenses, sublicenses and other agreements other than non-exclusive licenses and sublicenses granted to customers in the ordinary course of business as to which the Company or any Subsidiary is a party and pursuant to which any third party is authorized to use any Registered Intellectual Property, and (iii) all material licenses, sublicenses and other agreements as to which the Company or any Subsidiary is a party and pursuant to which the Company or any Subsidiary is authorized to use any Intellectual Property of third parties (“ Third Party Intellectual Property Rights ”) which are incorporated in, are, or form a part of or are distributed with any product of the Company or any Subsidiary. Neither the Company nor any Subsidiary is in material breach or violation of any such license, sublicense, or agreement, and, to the knowledge of the Company, no other party thereto is in, or is threatening, material breach or violation thereof, nor except as would not have a Material Adverse Effect, has the Company or any Subsidiary suffered any actual loss of rights relating to Company Intellectual Property thereunder. The Company or a Subsidiary is the sole and exclusive owner, with all right, title and interest in and to (free and clear of any Liens other than Permitted Liens), the Registered Intellectual Property, and has sole and exclusive rights (and is not contractually obligated to pay any compensation to any third party in respect thereof) to the use thereof in connection with the services or products in respect of which the Registered Intellectual Property is being used by the Company or such Subsidiary.

(c) To the Company’s knowledge, there is no unauthorized use, infringement or misappropriation of any Company or Subsidiary owned Intellectual Property, or any trade secret material of the Company or any Subsidiary, by any third party, including any current or former employee, contractor or independent consultant. Other than contractual obligations entered in the ordinary course of business in connection with the provision of the Company and its Subsidiaries’ products and services, neither the Company nor any Subsidiary has entered into any agreement to indemnify any other Person against any charge of infringement of any Intellectual Property.

(d) Neither the Company nor any Subsidiary has been sued in any suit, action or proceeding which involves, nor have any of them received a written request for indemnification or defense that relates to, a claim that the Company or any Subsidiary or that the making, using, or selling of any product or service of the Company or any Subsidiary has infringed, misappropriated, or violated any Intellectual Property of any third party. Moreover, (i) the conduct of the business of the Company and the Subsidiaries as currently conducted does not infringe, misappropriate, or violate any Intellectual Property of any third party; (ii) to the knowledge of the Company, the conduct of the business of the Company and the Subsidiaries as conducted in the past 4 years did not at the time infringe, misappropriate, or violate any Intellectual Property of any third party and the conduct of the business of the Company and the Subsidiaries as it is currently proposed by the Company to be conducted does not infringe, misappropriate, or violate any Intellectual Property of any third party; and (iii) to the actual knowledge of all current employees and contractors of the Company and the Subsidiaries, the conduct of the business of the Company and the Subsidiaries as currently conducted and currently proposed by the Company to be conducted will not infringe, misappropriate, or violate any Intellectual Property of any third party. To the knowledge of the Company, no third party is challenging the ownership by the Company or any Subsidiary of any Company or Subsidiary owned Intellectual Property or the validity, enforceability or effectiveness thereof. Neither the Company nor any Subsidiary has brought any action, suit or proceeding for infringement of Company or Subsidiary owned Intellectual Property. There are no pending or, to the knowledge of the Company threatened, interference, re-examinations, oppositions or nullities involving any patents, patent rights or applications therefor of the Company or any Subsidiary, except such as may have been commenced by the Company or any Subsidiary.

(e) Except as would not have a Material Adverse Effect, to the Company’s knowledge, the Company and each Subsidiary have executed written agreements with their former and current employees and, as applicable, consultants, contractors and third parties involved in the creation of Intellectual Property on behalf of the Company or any Subsidiary which assign to the Company or such Subsidiary any and all rights to such Intellectual Property made by them during their service to the Company or such Subsidiary.

(f) The Company and each Subsidiary have taken reasonably necessary and appropriate steps to protect and preserve the confidentiality in all material respects of their material trade secrets and other proprietary confidential information.

(g) The Company, together with the Subsidiaries, solely owns all material Intellectual Property developed on behalf of the Company or its Subsidiaries by any third parties performing development, engineering, or manufacturing services on behalf of the Company.

(h) None of the Company or any Subsidiary is a party to any agreement or arrangement, or, to the knowledge of the Company is subject to any law, rule, or regulation, under which any governmental entity had or has acquired rights, or has the right or ability to do so in the future, with respect to any product or service of the Company or any Subsidiary or any Company or Subsidiary owned Intellectual Property, exc