AGREEMENT AND PLAN OF MERGER

EXHIBIT 2.1

Execution Version

AGREEMENT AND PLAN OF MERGER

dated as of

February 24, 2008

among

OPTO CIRCUITS (INDIA) LIMITED

PACKER ACQUISITION CORPORATION

and

CRITICARE SYSTEMS, INC.

TABLE OF CONTENTS

ARTICLE I THE OFFER			1
1.1 The Offer			1
1.2 Company Action			4
1.3 Directors			5
ARTICLE II THE MERGER			6
2.1 The Merger			6
2.2 Closing; Effective Time			6
2.3 Effect of the Merger			6
2.4 Certificate of Incorporation; By-laws			7
2.5 Directors and Officers			7
2.6 Conversion of Securities			7
2.7 Employee Stock Options, Restricted Stock and Company Purchase Plan			8
2.8 Exchange of Certificates; Stock Transfer Books			9
2.9 Appraisal Rights			11
2.10 Further Action			11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY			11
3.1 Organization, Standing and Corporate Power			11
3.2 Capitalization			13
3.3 Authority; Noncontravention; Voting Requirements			14
3.4 Governmental Approvals			15
3.5 Company SEC Documents; Undisclosed Liabilities			15
3.6 Absence of Certain Changes			17
3.7 Legal Proceedings			17
3.8 Compliance With Laws; Permits			17
3.9 Information Supplied			18
3.10 Tax Matters			18
3.11 Employee Benefits and Labor Matters			19
3.12 Environmental Matters			21
3.13 Properties			21
3.14 Brokers and Other Advisors			23
3.15 Contracts			23
3.16 Intellectual Property Matters			24
3.17 Insurance			25

3.18 Inventory			26
3.19 Accounts Receivable			26
3.20 Ethical Practices			26
3.21 Related Party Transactions			26
3.22 Customers and Suppliers			26
3.23 Standstill Agreements			27
3.24 Stockholders Rights Plan			27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER			27
4.1 Organization and Standing			27
4.2 Authority for Agreement			27
4.3 No Conflict			27
4.4 Required Filings and Consents			28
4.5 Brokers			28
4.6 Purchaser Actions			28
4.7 Financing			28
4.8 Information Supplied			28
4.9 Ownership of Company Common Stock			29
4.10 No Vote of Parent Stockholders			29
ARTICLE V COVENANTS			29
5.1 Conduct of the Business			29
5.2 Notification of Certain Matters			30
5.3 Further Action; Reasonable Best Efforts			30
5.4 Stockholders’ Meeting; Proxy Statement			31
5.5 Indemnification			32
5.6 Public Announcements			33
5.7 Control of Litigation			33
5.8 Limitation on Purchase of Shares			34
5.9 No Solicitation			34
5.10 Employee Benefit Matters			35
5.11 Access to Information; Confidentiality			36
5.12 Change in Board Recommendation			36
ARTICLE VI CONDITIONS			37
6.1 Conditions to the Obligation of Each Party			37
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER			38

7.1 Termination			38
7.2 Effect of Termination			39
7.3 Amendments			39
7.4 Waiver			39
7.5 Termination Fees			39
ARTICLE VIII GENERAL PROVISIONS			40
8.1 No Third Party Beneficiaries			40
8.2 Entire Agreement			40
8.3 Succession and Assignment			41
8.4 Counterparts			41
8.5 Headings			41
8.6 Governing Law; Jurisdiction; Consent to Service of Process			41
8.7 Waiver of Jury Trial			42
8.8 Severability			42
8.9 Construction			42
8.10 Non-Survival of Representations and Warranties			42
8.11 Certain Definitions			42
8.12 Fees and Expenses			42
8.13 Enforcement of Agreement			42
8.14 Obligation of Parent			43
8.15 Board of Directors			43
8.16 Notices			43

Annexes

Annex A		Conditions to the Offer
Exhibits
Exhibit A		Definitions

Company Disclosure Schedules

Schedule 3.1(b)		-		Subsidiaries
Schedule 3.2(a)		-		Agreements or Arrangements to Issue Shares
Schedule 3.2(b)		-		Outstanding Capital Stock Obligations
Schedule 3.3(c)		-		Conflicts
Schedule 3.6		-		Absence of Certain Changes
Schedule 3.7		-		Legal Proceedings
Schedule 3.10		-		Tax Matters
Schedule 3.11(a)		-		Employee Benefit Plans
Schedule 3.11(i)		-		Acceleration of Benefits
Schedule 3.13		-		Owned and Leased Real Property
Schedule 3.13(h)		-		Encumbrances
Schedule 3.14		-		Brokers and Other Advisors
Schedule 3.15		-		Material Contracts
Schedule 3.16		-		Intellectual Property Matters
Schedule 3.17		-		Insurance
Schedule 3.18		-		Inventory
Schedule 3.19		-		Accounts Receivable
Schedule 3.22		-		Customers and Suppliers
Schedule 5.1		-		Conduct of the Business

AGREEMENT AND PLAN OF MERGER

     AGREEMENT AND PLAN OF MERGER (the “ Agreement ”) dated as of February 24, 2008 among Criticare Systems, Inc., a Delaware corporation (the “ Company ”), Opto Circuits (India) Limited, a company registered under the laws of India (“ Parent ”), and Packer Acquisition Corporation, a Delaware corporation and wholly-owned Subsidiary of Parent (“ Purchaser ”).

     WHEREAS, the Boards of Directors of Parent, Purchaser and the Company have each determined that it is in the best interest of their respective stockholders for Purchaser to acquire the shares of Company Common Stock upon the terms and subject to the conditions of this Agreement;

     WHEREAS, it is proposed that Purchaser make a cash tender offer (the “ Offer ”) to purchase all of the issued and outstanding common shares of the Company, par value $0.04 per share (the “ Company Common Stock ”), on an as-diluted basis for $5.50 per share (such amount, or any greater amount per share paid pursuant to the Offer, being the “ Per Share Amount ”), subject to any withholding Taxes required by Laws, net to the seller in cash, upon the terms and subject to the conditions of this Agreement;

     WHEREAS, the Board of Directors of the Company has, in light of and subject to the terms and conditions hereof, resolved to recommend that the stockholders of the Company tender their shares pursuant to the Offer;

     WHEREAS, in furtherance of the acquisition of the Company by Parent, the Boards of Directors of Parent, Purchaser and the Company have each approved, following consummation of the Offer, a merger (the “ Merger ” ), in accordance with the terms of Delaware General Corporation Law (“ DGCL ”), of Purchaser with and into the Company, with the Company as the surviving corporation (the “ Surviving Corporation ” ), upon the terms and subject to the conditions hereof.

     WHEREAS, in order to induce Parent and Purchaser to enter into this Agreement and to consummate the transactions contemplated hereby (the “ Transactions ”), concurrently with the execution and delivery of this Agreement each of the directors of the Company are executing agreements to tender all of the shares of Company Common Stock owned by such director in the Offer and to vote against certain transactions (the “ Stockholder Tender Agreements ”) in favor of Parent and Purchaser.

     NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements contained in this Agreement, the parties hereto agree as follows:

ARTICLE I

     1.1 The Offer .

          (a) Provided that this Agreement shall not have been terminated in accordance with the provisions of Section 7.1 and that none of the events set forth in Annex A shall have occurred or are continuing, as promptly as reasonably practicable after the date of this Agreement (but in no event more than ten (10) Business Days after

the date of this Agreement), Purchaser shall (and Parent shall cause Purchaser to) commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934 (the “ Exchange Act ”)) the Offer.

          (b) The obligation of Purchaser to accept for payment and to pay for any Company Common Stock tendered pursuant to the Offer shall be subject only to the satisfaction or waiver of the conditions set forth in Annex A . Purchaser expressly reserves the right to increase the Per Share Amount or to make any other changes in the terms and conditions of the Offer not inconsistent with the provisions of this Agreement; provided , however , that without the prior written consent of the Company, (i) the Minimum Tender Condition may not be amended or waived; and (ii) no change may be made that changes the form of consideration to be paid, decreases the Per Share Amount or the number of shares of Company Common Stock sought in the Offer, imposes conditions to the Offer in addition to those set forth in Annex A , or extends the expiration date of the Offer beyond the Initial Expiration Date (except as provided in (c), below). Notwithstanding anything to the contrary contained in this Agreement, except as set forth in Section 7.1 , the Offer may not be withdrawn prior to the Initial Expiration Date (or any rescheduled expiration date) of the Offer.

          (c) The Offer shall initially be scheduled to expire twenty (20) Business Days following the commencement (within the meaning of Rule 14d-2 under the Exchange Act) thereof (the “ Initial Expiration Date ”). If, at any then-scheduled expiration date, the conditions to the Offer have not been satisfied or waived (other than conditions which are not capable of being satisfied), Purchaser shall be entitled to extend the Offer for such amount of time as Purchaser reasonably believes is necessary to cause such Offer conditions to be satisfied; provided , however , that Purchaser shall not be entitled to extend the Offer to any date occurring after sixty (60) Business Days following the commencement (within the meaning of Rule 14d-2 under the Exchange Act) of the Offer (the “ Outside Date ”) without the prior written consent of the Company. Notwithstanding anything to the contrary contained in this Agreement (i) Purchaser may, without the consent of the Company or any other Person extend the Offer for any period required by any rule or regulation of the SEC applicable to the Offer, (ii) if, as of the scheduled or extended expiration date, the sole condition remaining unsatisfied is the Minimum Tender Condition, Purchaser shall, upon the written request of the Company, extend the Offer for an additional period of not more than five (5) Business Days (a “ Minimum Condition Extension ”); provided, however that if, upon expiration of the Minimum Condition Extension, the Minimum Tender Condition has not been met, Purchaser may, without the consent of the Company or any other Person extend the Offer for an additional period of not more than fifteen (15) Business Days; (iii) if, on the Initial Expiration Date, the sole condition remaining unsatisfied is the failure of the waiting period under the HSR Act to have expired or been terminated, then Purchaser shall extend the Offer from time to time until the date of expiration or termination of the applicable waiting period under the HSR Act; and (iv) Purchaser may, without the consent of the Company or any other Person, elect to provide for a subsequent offering period (and one or more extensions thereof) under Rule 14d-11 promulgated under the Exchange Act of not more than twenty (20) Business Days to meet the objective that there be validly tendered, in accordance with the terms of the Offer, prior to the expiration of the Offer (as so extended), and not withdrawn a number of shares of Company Common Stock, which together with the shares of Company Common Stock then owned by Parent and Purchaser, represent at least ninety percent (90)% of the then outstanding shares of Company Common Stock at the Offer Acceptance Time (including

following the exercise of the Merger Option at the Parent or Purchaser’s option). Notwithstanding the foregoing, in no event shall Purchaser be required or entitled to extend the Offer pursuant to this Section 1.1(c) to any date occurring after the Outside Date.

          (d) The Per Share Amount shall, subject to applicable withholding of Taxes, be net to the seller in cash, upon the terms and subject to the conditions of the Offer. Purchaser shall pay, as promptly as practicable after expiration of the Offer, for all shares of Company Common Stock validly tendered and not withdrawn pursuant to the Offer. Notwithstanding the immediately preceding sentence and subject to the applicable rules of the SEC and the terms and conditions of the Offer, Purchaser expressly reserves the right to delay payment for shares of Company Common Stock in order to comply in whole or in part with applicable laws. Any such delay shall be effected in compliance with Rule 14e-1(c) under the Exchange Act. If the payment of the Per Share Amount in cash (the “ Merger Consideration ”) is to be made to a person other than the person in whose name the surrendered certificate formerly evidencing the shares of Company Common Stock is registered on the stock transfer books of the Company, it shall be a condition of payment that the certificate so surrendered shall be endorsed properly or otherwise be in proper form for transfer and that the person requesting such payment shall have paid all transfer and other Taxes required by reason of payment of the Merger Consideration to a person other than the registered holder of the certificate surrendered, or shall have established to the satisfaction of Purchaser that such Taxes either have been paid or are not applicable.

          (e) As promptly as reasonably practicable on the date of commencement (within the meaning of Rule 14d-2 under the Exchange Act) of the Offer, Purchaser shall file with the SEC a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, the “ Schedule TO ”) with respect to the Offer. The Schedule TO shall contain or shall incorporate by reference an offer to purchase (the “ Offer to Purchase ”) and forms of the related letter of transmittal and any related summary advertisement (the Schedule TO, the Offer to Purchase and such other documents, together with all supplements and amendments thereto, being referred to herein collectively as the “ Offer Documents ”). Each of Parent, Purchaser and the Company agrees to correct promptly any information provided by it for use in the Offer Documents that shall have become false or misleading in any material respect, and Parent and Purchaser further agree to take all steps necessary to cause the Schedule TO, as so corrected, to be filed with the SEC, and the other Offer Documents, as so corrected, to be disseminated to holders of shares of Company Common Stock, in each case as and to the extent required by applicable federal securities laws. Parent and Purchaser shall give the Company and its counsel a reasonable opportunity to review and comment on the Offer Documents prior to such documents being filed with the SEC or disseminated to holders of shares of Company Common Stock. Parent and Purchaser shall provide the Company and its counsel with any comments that Parent, Purchaser or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments and shall provide the Company and its counsel with a reasonable opportunity to participate in the response of Parent or Purchaser to such comments.

          (f) In accordance with the provisions of Section 8.14 , Parent hereby guarantees Purchaser’s obligations under this Section 1.1 , including without limitation, Purchaser’s obligation to pay for any Company Common Stock tendered pursuant to the Offer.

     1.2 Company Action .

          (a) The Company hereby approves of and consents to the Offer and represents that its Board of Directors, at a meeting duly called and held, has (i) by unanimous vote of all directors of the Company, determined that this Agreement and the Transactions are fair to and in the best interests of the Company’s stockholders, (ii) by unanimous vote of all directors of the Company, approved and adopted this Agreement and the Transactions in accordance with the requirement of the DGCL, (iii) by unanimous vote of all directors of the Company declared that this Agreement is advisable, and (iv) by unanimous vote of all directors of the Company, resolved to recommend that the stockholders of the Company accept the Offer and tender their shares of Company Common Stock pursuant to the Offer and adopt this Agreement and approve the Merger (the recommendation of the Company’s Board of Directors that the stockholders of the Company accept the Offer and tender their shares of Company Stock pursuant to the Offer and adopt this Agreement and approve the Merger being referred to as the “ Company Board Recommendation ”). Subject to Section 5.12 , the Company hereby consents to the inclusion of the Company Board Recommendation in the Offer Documents. Further, the Company represents that it has engaged a financial advisor to deliver to the Company’s Board of Directors a written opinion that the consideration to be received by the holders of the shares of Company Common Stock pursuant to each of the Offer and the Merger is fair to the holders of the shares of Company Common Stock from a financial point of view (the “ Fairness Opinion ”).

          (b) As promptly as practicable on the day that the Offer is commenced (within the meaning of Rule 14d-2 under the Exchange Act), the Company shall file with the SEC and disseminate to holders of the shares of Company Common Stock, in each case as and to the extent required by applicable federal securities laws, a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (together with any exhibits, amendments or supplements thereto, the “ Schedule 14D-9 ”) containing the Fairness Opinion (to the extent not withdrawn) and, subject to Section 5.12 , the Company Board Recommendation described in Section 1.2(a) , and shall disseminate the Schedule 14D-9 to the extent required by Rule 14D-9 promulgated under the Exchange Act, and any other applicable federal securities laws. Each of Parent, Purchaser and the Company agree to correct promptly any information provided by it for use in the Schedule 14D-9 which shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to cause the Schedule 14D-9, as so corrected, to be filed with the SEC or disseminated to holders of shares of the Company Common Stock, in each case as and to the extent required by applicable federal securities laws. The Company shall give Parent and its counsel a reasonable opportunity to review and comment on the Schedule 14D-9 prior to such document being filed with the SEC or disseminated to the holders of the shares of Company Common Stock. The Company shall provide Parent and its counsel with any comments that the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments and shall provide Parent and its counsel with a reasonable opportunity to participate in the response of the Company to such comments.

          (c) Stockholder Lists . The Company shall promptly furnish Purchaser with mailing labels containing the names and addresses of all record holders of shares of Company Common Stock and with security position listings of shares of Company Common Stock held in stock depositories, each as of a recent date, together

with all other available listings and computer files containing names, addresses and security position listings of record holders and beneficial owners of shares of Company Common Stock. The Company shall furnish Parent and Purchaser with such additional information, including, without limitation, updated listings and computer files of stockholders, mailing labels and security position listings, and such other assistance in disseminating the Offer Documents to holders of shares of Company Common stock as Parent or Purchaser may reasonably request. Subject to the requirements of applicable Law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Offer or the Merger, Parent and Purchaser shall hold in confidence the information contained in such labels, listings and files, shall use such information only in connection with the Transactions, and, if this Agreement shall be terminated in accordance with Section 7.01 , shall deliver to the Company all copies of such information then in their possession.

          (d) Top Up Option . The Company hereby grants to Purchaser and Parent an irrevocable option (the “ Merger Option ”) to purchase up to that number of newly issued shares of Company Common Stock (the “ Merger Option Shares ”) equal to the number of shares of Company Common Stock that, when added to the number of shares of Company Common Stock owned by Parent and Purchaser immediately following consummation of the Offer, shall constitute one share more than 90% of the shares of Company Common Stock then outstanding (after giving effect to the issuance of the Merger Option Shares), as certified by the Company, for consideration per Merger Option Share equal to the Offer Price. The Merger Option shall be exercisable only after the purchase of and payment for shares of Company Common Stock pursuant to the Offer by Parent or Purchaser as a result of which Parent and Purchaser own at least 80% of the then outstanding shares of Company Common Stock. Notwithstanding the foregoing, the Merger Option (i) shall be exercisable only once and shall in no event be exercisable for a number of shares of Company Common Stock in excess of the Company’s then authorized and unissued shares of Common Stock (after taking into account any shares of Company Common Stock reserved for issuance upon exercise of any Company Stock Options or under the Company Purchase Plan then outstanding) and (ii) shall not be exercisable to the extent prohibited by any applicable Law or to the extent approval of the Company’s stockholders would be required to issue any Merger Option Shares. Parent and Purchaser understand that any Merger Option Shares will not be registered under the Securities Act or any other applicable securities law, and will be issued in reliance upon an exemption thereunder for transactions not involving a public offering, and that any certificates representing the Merger Option Shares may include any legends required by applicable securities laws. In the event that Parent or Purchaser wish to exercise the Merger Option, Purchaser shall give the Company one (1) Business Day’s written notice specifying the number of shares of Company Common Stock that are or will be owned by Parent and Purchaser following consummation of the Offer and specifying a place and a time for the closing of the purchase. The Company shall, as soon as practicable following receipt of such notice, deliver written notice to Purchaser specifying the number of Merger Option Shares. At the closing of the purchase of the Merger Option Shares, the portion of the purchase price owed upon exercise of the Merger Option that equals the product of (i) the number of shares of Shares purchased pursuant to the Merger Option, multiplied by (ii) the Offer Price, shall be paid to the Company, at the election of Parent and Purchaser, in cash (or by wire transfer or cashier’s check).

     1.3 Directors .

          (a) Effective upon the acceptance of and payment for at least sixty-five percent (65%) of the outstanding shares of Company Common Stock on a fully-diluted basis (the “ Offer Acceptance Time ”), Parent shall be entitled to designate the number of directors on the Company’s Board of Directors reflecting Purchaser’s proportional ownership. The Company shall take all action necessary to cause Parent’s designees to be elected or appointed to the Company’s Board of Directors, including increasing the number of directors and seeking and accepting resignations of incumbent directors. At such time, to the extent requested by Parent, the Company shall also cause individuals designated by Parent to constitute at least the same percentage (rounded up to the next whole number) on (i) each committee of the Board, and (ii) each Board of Directors of each Subsidiary of the Company (and each committee thereof) as the number of directors designated by Parent represents on the Company’s Board of Directors.

          (b) The Company’s obligations to appoint Parent’s designees to the Company’s Board of Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions, and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors, as Section 14(f) and Rule 14f-1 require in order to fulfill its obligations under this Section, so long as Parent shall have provided to the Company on a timely basis the information referred to in the following sentence. Parent shall supply to the Company in writing and be solely responsible for any information with respect to itself and its nominees, officers, directors and Affiliates required by Section 14(f) and Rule 14f-1.

ARTICLE II

     2.1 The Merger . Upon the terms and subject to the conditions set forth Article VI, and in accordance with the DGCL, at the Effective Time, Purchaser shall be merged with and into the Company.

     2.2 Closing; Effective Time . The consummation of the Merger (the “ Closing ”) shall take place at the offices of DLA Piper US LLP at 203 N. LaSalle Street, Suite 1900, Chicago, Illinois 60601, at 10:00 a.m. local time on a date to be designated by Parent (the “ Closing Date ”), which shall be no later than the fifth (5th) Business Day after the satisfaction or waiver of the last to be satisfied or waived of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions). Subject to the provisions of this Agreement, a certificate of merger (the “ Certificate of Merger ”) satisfying the applicable requirements of the DGCL shall be duly executed by the Company and, concurrently with or as soon as practicable following the Closing, delivered to the Secretary of State of the State of Delaware for filing. The Merger shall become effective upon the date and time of the filing of such Certificate of Merger with the Secretary of State of the State of Delaware (the “ Effective Time ”).

     2.3 Effect of the Merger . As a result of the Merger, the separate corporate existence of Purchaser shall cease and the Company shall continue as the surviving corporation of the Merger (the “ Surviving Corporation ”). At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the

property, rights, privileges, powers and franchises of the Company and Purchaser shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Company and Purchaser shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation.

     2.4 Certificate of Incorporation; By-laws.

          (a) At the Effective Time, the Certificate of Incorporation of the Company, as in effect immediately prior to the Effective Time, shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended as provided by law and such Certificate of Incorporation.

          (b) Unless otherwise determined by Parent prior to the Effective Time, at the Effective Time, the By-laws of Purchaser, as in effect immediately prior to the Effective Time, shall be the By-laws of the Surviving Corporation until thereafter amended as provided by law, the Certificate of Incorporation of the Surviving Corporation and such By-laws.

     2.5 Directors and Officers . The directors of Purchaser immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the Certificate of Incorporation and By-laws of the Surviving Corporation, and except with respect to the Chief Executive Officer of the Company, the officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified or until their earlier death, resignation or removal.

     2.6 Conversion of Securities . At the Effective Time, by virtue of the Merger and without any action on the part of Purchaser, the Company or the holders of any shares of Company Common Stock or any shares of capital stock of Purchaser:

          (a) Each share of capital stock of Purchaser issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.

          (b) Any shares of Company Common Stock that are owned by the Company as treasury stock, and any shares of Company Common Stock owned by Parent, Purchaser or any Subsidiary of the Company, shall be automatically canceled and shall cease to exist and no consideration shall be delivered in exchange therefore (the “ Cancelled Shares ”).

          (c) (i) Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than Company Common Stock received pursuant to Section 2.6(a) , Cancelled Shares, and any Dissenting Shares), shall be converted into the right to receive the Merger Consideration, without interest.

                    (ii) As of the Effective Time, all shares of Company Common Stock (including Cancelled Shares and any Dissenting Shares) shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder, if any, of a certificate (or evidence of shares in book-entry form) which immediately prior to the Effective Time represented any such shares of Company Common Stock (each, a “ Certificate ”) (or

effective affidavits of loss in lieu thereof) or non-certificated shares of Company Common Stock represented by book-entry (“ Book-Entry Shares ”) shall cease to have any rights with respect thereto, except the right (other than with respect to Cancelled Shares and any Dissenting Shares) to receive the Merger Consideration to be paid in consideration therefor upon surrender of such Certificate or Book-Entry Share in accordance with Section 2.8(b) ,without interest.

     2.7 Employee Stock Options, Restricted Stock and Company Purchase Plan .

          (a) Effective as of the Effective Time, the Company shall take all necessary action, including obtaining the consent of the individual option holders, if necessary, to (i) terminate the Company’s Stock Option Plans, as amended through the date of this Agreement, (ii) provide that each holder of an outstanding option to purchase shares of Company Common Stock granted under the Company Stock Option Plans (each, a “ Company Stock Option ”) that is outstanding and unexercised as of immediately prior to the Effective Time, whether or not vested or exercisable, shall receive the Option Consideration in full satisfaction of such Company Stock Option, and (iii) cancel as of the Effective Time each Company Stock Option that is outstanding and unexercised at the Effective Time in exchange for the payment of the Option Consideration for such Company Stock Option. Each holder of a Company Stock Option that is outstanding and unexercised at the Effective Time and that has an exercise price per share of Company Common Stock that is less than the Merger Consideration, whether or not vested or exercisable, shall be entitled (subject to the provisions of this Section 2.7 ) to be paid by the Surviving Corporation immediately after the Effective Time, in exchange for the cancellation of such Company Stock Option, an amount in cash (subject to any applicable withholding Taxes) with respect to each share of Company Common Stock subject to the Company Stock Option equal to the excess, if any, of the Merger Consideration over the applicable per share exercise price of such Company Stock Option (the “ Option Consideration ”). Any such payment shall be subject to all applicable federal, state and local Tax withholding requirements. The Company shall take all necessary action to approve the disposition of the Company Stock Options in connection with the transactions contemplated by this Agreement to the extent necessary to exempt such dispositions under Rule 16b-3 of the Exchange Act. Prior to the Effective Time, Parent shall cause to be wired to an account designated by the Company an amount sufficient to enable the Company to make the payments of the Option Consideration required pursuant to this Section 2.7 .

          (b) At the Effective Time, each share of Company Common Stock subject to vesting requirements or other restrictions under the Company Stock Option Plans which is outstanding immediately prior to the Effective Time shall be converted into the right to receive the Merger Consideration on the same terms as any other share of Company Common Stock without regard to any such vesting requirements or other restrictions, which shall lapse as of the Effective Time.

          (c) Promptly upon execution of this Agreement, the Company shall, subject to applicable Law, take such action as is necessary to suspend purchases of Company Common Stock under the Company Purchase Plan; provided, however, that purchases of Company Common Stock under the Company Purchase Plan may be completed with respect to any payroll deductions made prior to the date of the Agreement. At the Effective Time, the Company shall, subject to applicable Law, take all

necessary action to cause the Company Purchase Plan to be terminated in accordance with its terms.

     2.8 Exchange of Certificates; Stock Transfer Books .

          (a) Prior to the Effective Time, Parent shall designate a bank or trust company reasonably acceptable to the Company to act as agent for the benefit of the holders of shares of Company Common Stock in connection with the Merger (the “ Paying Agent ”) to receive, on terms reasonably acceptable to the Company, for the benefit of holders of shares of Company Common Stock immediately prior to the Merger, the aggregate Merger Consideration to which holders of shares of Company Common Stock shall become entitled pursuant to Section 2.6(c) (other than Company Common Stock received pursuant to Section 2.6(a ) and the Excluded Shares). The Paying Agent shall also act as the agent for the Company’s stockholders for the purpose of holding the Certificates, if any, and shall obtain no rights or interests in the shares represented by such Certificates. Parent shall deposit such aggregate Merger Consideration with the Paying Agent at or prior to the Effective Time. Such aggregate Merger Consideration deposited with the Paying Agent shall, pending its disbursement to such holders, be invested by the Paying Agent in short term investments in direct obligations of the United States of America, obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of all principal and interest or commercial paper obligations receiving the highest rating from either Moody’s Investors Service, Inc. or Standard & Poor’s or a combination thereof as directed by Parent or the Surviving Corporation; provided that Parent shall promptly replace any funds deposited with the Paying Agent lost through any investment made pursuant to this paragraph.

          (b) Promptly after the Effective Time (but in no event more than five (5) Business Days thereafter), the Surviving Corporation shall cause the Paying Agent to mail to each holder of record of Company Common Stock (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares to the Paying Agent, and which shall be in such form and shall have such other customary provisions (including customary provisions with respect to delivery of an “agent’s message” with respect to shares held in book-entry form) as Parent may reasonably specify and (ii) instructions for use in effecting the surrender of the Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares in exchange for payment of the Merger Consideration. Upon surrender of a Certificate (or effective affidavits of loss in lieu thereof) or Book-Entry Shares for cancellation to the Paying Agent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions (and such other customary documents as may reasonably be required by the Paying Agent), the holder of such Certificate or Book-Entry Share shall be entitled to receive in exchange therefor the Merger Consideration, without interest, for each share of Company Common Stock formerly represented by such Certificate or Book-Entry Share, and the Certificate or Book-Entry Share so surrendered shall forthwith be canceled. If payment of the Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition of payment that (x) the Certificate so surrendered shall be properly endorsed or shall otherwise be in proper form for transfer and (y) the Person requesting such payment shall have paid any transfer and other Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of such Certificate surrendered or shall have established

to the reasonable satisfaction of the Surviving Corporation that such Tax either has been paid or is not applicable. Until surrendered as contemplated by this Section 2.8 , each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration as contemplated by this Article II , without interest, and any declared and unpaid dividends to which the holder of such Certificate is entitled.

          (c) The Merger Consideration paid in respect of shares of Company Common Stock upon the surrender for exchange of Certificates or Book-Entry Shares in accordance with the terms of this Article II shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock previously represented by such Certificates or Book-Entry Shares, and at the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time. From and after the Effective Time, the holders of Certificates or Book-Entry Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares of Company Common Stock, except as otherwise provided for herein or by applicable Law. Subject to the last sentence of Section 2.8(e) , if, at any time after the Effective Time, Certificates or Book-Entry Shares are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article II .

          (d) If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the making by such Person of an indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will pay, in exchange for such lost, stolen or destroyed Certificate, the applicable Merger Consideration to be paid in respect of the shares of Company Common Stock formerly represented by such Certificate, as contemplated by this Article II .

          (e) At any time following the six (6) month anniversary of the Closing Date, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) that had been delivered to the Paying Agent and which have not been disbursed to holders of Certificates or Book-Entry Shares, and thereafter such holders shall be entitled to look only to the Surviving Corporation (subject to abandoned property, escheat or other similar Laws) as general creditors thereof with respect to the payment of any Merger Consideration that may be payable upon surrender of any Certificates or Book-Entry Shares held by such holders, as determined pursuant to this Agreement, without any interest thereon. Any amounts remaining unclaimed by such holders at such time at which such amounts would otherwise escheat to or become property of any Governmental Authority shall become, to the extent permitted by applicable Law, the property of the Surviving Corporation, free and clear of all claims or interest of any Person previously entitled thereto.

          (f) Notwithstanding any provision of this Agreement to the contrary, none of the parties hereto, the Surviving Corporation or the Paying Agent shall be liable to any Person for Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

          (g) Parent, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any Person who was a holder of shares of Company Common Stock pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “ Code ”), or under any provision of state, local or foreign Tax Law. To the extent amounts are so withheld and paid over to the appropriate Governmental Authority, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

     2.9 Appraisal Rights . Notwithstanding anything in this Agreement to the contrary, shares of Company Common Stock outstanding immediately prior to the Effective Time and held by a holder who is entitled to demand and properly demands appraisal for such shares of Company Common Stock in accordance with the DGCL (the “ Dissenting Shares ”) shall not be converted into the right to receive the Merger Consideration, unless such holder fails to perfect or withdraws or otherwise loses his or her right to appraisal. If after the Effective Time such holder fails to perfect or withdraws or loses his or her right to appraisal, each such share of Company Common Stock shall be treated as if it had been converted as of the Effective Time into a right to receive the Merger Consideration without any interest thereon (less any amounts entitled to be deducted or withheld pursuant to Section 2.8(g) ). The Company shall give Parent prompt notice of any demands received by the Company for appraisal of shares of Company Common Stock, and Parent shall have the right to participate in all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.

     2.10 Further Action . If, at any time after the Effective Time, any further action is reasonably determined by Parent to be necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full right, title and possession of and to all rights and property of Purchaser and the Company, the officers and directors of the Surviving Corporation and Parent shall be fully authorized (in the name of Purchaser, in the name of the Company and otherwise) to take such action.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and Purchaser that except as set forth in the disclosure schedule delivered by the Company to Parent and Purchaser immediately prior to the execution of this Agreement (the “ Company Disclosure Schedule ”):

     3.1 Organization, Standing and Corporate Power .

          (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority necessary to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the

failure to be so licensed, qualified or in good standing (or equivalent status), individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect on the Company (“ Company Material Adverse Effect ”). For purposes of this Agreement, “ Material Adverse Effect ” shall mean, with respect to any party, any change, event, development or occurrence that has a material adverse effect on (A) the ability of such party to timely consummate the Transactions or (B) the results of operations, financial condition or assets of such party and its Subsidiaries taken as a whole, other than changes, events, developments or occurrences arising out of, resulting from or attributable to (i) changes in conditions in the United States or the capital or financial or markets or the world economy generally, (ii) changes in general legal, regulatory, political, economic or business conditions or changes in GAAP that, in each case, does not have a materially disproportionate impact on the Company and its Subsidiaries taken as a whole, relative to the Company’s industry peers, or (iii) the negotiation, announcement, pendency, execution, performance or consummation of this Agreement or the Transactions and the identity of Parent and Purchaser, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners or employees (including any failure to obtain any consent or waiver listed in Schedule 3.3(c) of the Company Disclosure Schedule).

          (b) Exhibit 21 of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007, together with Schedule 3.1(b) of the Company Disclosure Schedule, sets forth a true and complete list of each of the Company’s Subsidiaries, as of the date hereof. Each of the Company’s Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite corporate or other power and authority necessary to own or lease all of its properties and assets and to carry on its business as it is now being conducted, except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. Each of the Company’s Subsidiaries is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing (or equivalent status), individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. All the outstanding shares of capital stock of, or other equity interests in, each such Subsidiary are owned directly or indirectly by the Company free and clear of liens, pledges, security interests and transfer restrictions or other encumbrances (“ Liens ”), except for such transfer restrictions of general applicability as may be provided under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “ Securities Act ”), and other applicable securities Laws. The Company does not own of record or beneficially (within the meaning of Rule 13d-3 of the Exchange Act), any material equity or similar interest in, or any material interest convertible into or exchangeable or exercisable for any equity or similar interest in, any other Person.

          (c) The Company has made available to Parent and Purchaser prior to the date hereof (i) complete and correct copies of the articles or certificate of incorporation and bylaws (or similar charter documents) of the Company and each of its Subsidiaries, as amended to the date of this Agreement (the “ Company Charter Documents ”) and (ii) the minutes (or, in the case of draft minutes, the most recent drafts thereof) of all meetings of the Company’s stockholders, the Company’s Board of Directors and each committee of the Company’s Board of Directors held since January 1,

2007 through the date hereof, other than any part of such minutes for a meeting of the Company’s Board of Directors after November 29, 2007, covering the contemplated Transactions with Parent and Purchaser or any other Acquisition Proposal. The Company Charter Documents are in full force and effect. Neither the Company nor any or its Subsidiaries is in violation of any of the provisions of the Company Charter Documents.

     3.2 Capitalization .

          (a) The authorized capital stock of the Company consists of 15,000,000 shares of Company Common Stock par value $0.04 per share and 500,000 shares of preferred stock, par value $0.04 (“ Company Preferred Stock ”). At the close of business on December 31, 2007, (i) 12,336,695 shares of Company Common Stock were issued and outstanding, (ii) 90,560 shares of Company Common Stock were held by the Company in its treasury, (iii) except for shares of the Company’s capital stock issuable upon exercise of Company Stock Options under the Company Stock Option Plans or under the Company Purchase Plan, no shares of the Company’s capital stock, voting securities or other ownership interests were reserved for issuance for the types of arrangements described in Section 3.2(b) , and (iv) no shares of Company Preferred Stock were issued or outstanding. All outstanding shares of Company Common Stock and all outstanding shares of capital stock or other equity interests of each of the Company’s Subsidiaries have been duly authorized and validly issued and are fully paid, nonassessable, subject to the personal liability which may be imposed on stockholders for former Section 180.0622(2)(b) of the Wisconsin Business Corporation Law (“WBCL”) for debts incurred prior to June 14, 2006 (for debts incurred on or after such date, Section 180.0622(2)(b) of the WBCL has been repealed), and free of preemptive and similar rights in favor of third parties. Except as set forth in Schedule 3.2(a) of the Company Disclosure Schedule, since June 30, 2007, the Company has not issued, or entered into any agreement or arrangement to issue, any shares of its capital stock, or entered into any agreement or arrangement to issue securities convertible into or exchangeable or exercisable for any shares of its capital stock. All dividends on the Company Common Stock that have been declared or have accrued prior to the date hereof have been paid in full to the Company’s paying agent.

          (b) Except for the Company Stock Options, the Company Purchase Plan or as set forth in Schedule 3.2(b) of the Company Disclosure Schedule, there are no outstanding (i) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or other voting securities or ownership interests in the Company or any of its Subsidiaries, (ii) options, restricted stock, warrants, rights or other agreements or commitments to acquire from the Company or any of its Subsidiaries, or obligations of the Company or any of its Subsidiaries to issue or transfer, any capital stock, voting securities or other ownership interests (or securities convertible into or exchangeable for capital stock or voting securities or other ownership interests) in the Company or any of its Subsidiaries, (iii) obligations of the Company or any of its Subsidiaries to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock, voting securities or other ownership interests in the Company or any of its Subsidiaries or (iv) obligations of the Company or any of its Subsidiaries to make any payment based on the market price or value of any securities of the Company or any of its Subsidiaries. Except as set forth in Schedule 3.2(b) of the Company Disclosure Schedule, there are no (i) outstanding obligations of the Company or any of its

Subsidiaries to purchase, redeem or otherwise acquire any outstanding securities of the Company or any of its Subsidiaries or (ii) voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party with respect to the voting of capital stock of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has any obligation or commitment to provide financing to or make any debt or equity investment in any entity other than wholly-owned Subsidiaries of the Company.

     3.3 Authority; Noncontravention; Voting Requirements .

          (a) The Company has all necessary corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the Transactions , subject in the case of the consummation of the Merger to obtaining the Company Stockholder Approval, if such approval is required by the Company Charter Documents or by Law. The execution, delivery and performance by the Company of this Agreement, and the consummation by it of the Transactions, have been duly authorized by all necessary corporate action and no other corporate action on the part of the Company is necessary to authorize the execution, delivery and performance by the Company of this Agreement and the consummation by it of the Transactions , subject in the case of the consummation of the Merger to obtaining the Company Stockholder Approval. This Agreement has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by Parent and Purchaser, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the enforcement of creditors’ rights generally and (ii) is subject to general principles of equity, whether considered in a proceeding at Law or in equity (the “ Bankruptcy and Equity Exception ”).

          (b) The Company’s Board of Directors, at a meeting duly called and held, has unanimously (i) approved and adopted this Agreement and approved the Transactions , including the Merger, (ii) determined that this Agreement and the Transactions are advisable and in the best interests of, the stockholders of the Company, (iii) consented to the public disclosure of this Agreement and the Transactions in accordance with the terms and provisions of the Mutual Non-Disclosure Agreement, dated as of December 13, 2007, between Parent and the Company (as it may be amended from time to time, the “ Confidentiality Agreement ”) and (iv) resolved to, subject to Section 5.12 hereof, recommend that the stockholders of the Company accept the Offer, tender their shares of Company Common Stock to Purchaser pursuant to the Offer and , if applicable, grant the Company Stockholder Approval and submit this Agreement to the stockholders of the Company for approval and file with the SEC each document required to be filed by the Company with the SEC or required to be distributed or otherwise disseminated to the Company’s stockholders in connection with the Transactions, including the Schedule 14D-9 and the proxy or information statement, if any, (the “Company Disclosure Documents”), as required by Law.

          (c) Neither the execution, delivery and performance of this Agreement by the Company nor the consummation by the Company of the Transactions, nor compliance by the Company with any of the terms or provisions hereof, will (i) conflict with or violate any provision of the Company Charter Documents or (ii)

assuming that the authorizations, consents and approvals referred to in Section 3.4 (and, in the case of the consummation of the Merger, the Company Stockholder Approval) are obtained and the filings referred to in Section 3.4 are made, (x) violate any Law, judgment, writ or injunction of any Governmental Authority applicable to the Company or any of its Subsidiaries or any of their respective assets, properties or rights, (y) violate or constitute a default (or an event which with notice or lapse of time or both would become a default) or give rise to any right of termination, cancellation, modification or acceleration under any of the terms, conditions or provisions of any loan or credit agreement, debenture, note, bond, mortgage, indenture, deed of trust, lease, license, contract or other instrument or agreement (each, a “ Contract ”) to which the Company or any of its Subsidiaries is a party or by which any of their assets, properties or rights are bound or (z) result in the creation of any Lien upon any of the assets, properties or rights of the Company or any of its Subsidiaries other than Permitted Liens, except, in the case of clause (ii), for such violations, defaults, rights or Liens, as, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect or as set forth in Schedule 3.3(c) of the Company Disclosure Schedule.

          (d) The affirmative vote (in person or by proxy) of the holders of at least a majority of the outstanding shares of Company Common Stock entitled to vote on such matter at the Stockholders’ Meeting, or any adjournment or postponement thereof, in favor of the adoption of this Agreement and the Merger (the “Company Stockholder Approval ”) is the only vote or approval of the holders of any class or series of capital stock of the Company or any of its Subsidiaries which is necessary to approve this Agreement and the Transactions and the Company Stockholder Approval is not required if in the Offer Purchaser obtains at least ninety percent (90%) of the outstanding shares of Company Common Stock.

     3.4 Governmental Approvals . Except for (i) the filing with the SEC of any Company Disclosure Documents and other filings required under, and compliance with other applicable requirements of, the Exchange Act, and the rules of the American Stock Exchange (“ AMEX ”), (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware pursuant to the DGCL, and (iii) filings required under, and compliance with other applicable requirements of, the HSR Act and any other applicable Antitrust Law, no consents or approvals of, or filings, declarations or registrations with, any Governmental Authority are necessary for the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the Transactions, other than such other consents, approvals, filings, declarations or registrations that, if not obtained, made or given, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

     3.5 Company SEC Documents; Undisclosed Liabilities .

          (a) The Company and each of its Subsidiaries have timely filed or furnished, as applicable, all required registration statements, reports, schedules, forms, certifications and other documents with the Securities and Exchange Commission (the “ SEC ”) since December 31, 2004 (collectively, and in each case including all exhibits and schedules thereto and financial statements contained in, and documents incorporated by reference therein, the “ Company SEC Documents ”). As of their respective filing dates, the Company SEC Documents complied, and each such Company SEC Document filed subsequent to the date hereof and prior to the Offer Acceptance Time, will comply,

in all material respects with the requirements of the Exchange Act and the Securities Act and all other federal securities Laws applicable to such Company SEC Documents, and none of the Company SEC Documents as of their respective dates contained or will contain any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company has made available to Parent prior to the date hereof copies of all correspondence between the SEC and the Company or any Company Subsidiary, since December 31, 2004 until the date hereof. As of the date of this Agreement, there are no material outstanding or unresolved comments from the SEC staff with respect to the Company SEC Documents.

          (b) The consolidated financial statements of the Company included in the Company SEC Documents have been prepared in accordance with GAAP (except, in the case of unaudited interim statements, as indicated in the notes thereto) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations, cash flows and stockholders’ equity (when required to be included in any such Company SEC Document) for the periods then ended (subject, in the case of unaudited interim statements, to normal year-end audit adjustments).

          (c) Neither the Company nor any of its Subsidiaries has any liabilities, whether accrued, absolute, fixed, contingent or otherwise, whether due or to become due, whether or not known, of a nature that are required to be reflected or reserved against on a consolidated balance sheet of the Company prepared in accordance with GAAP or the notes thereto, except liabilities (i) reflected or reserved against on the balance sheet of the Company and its Subsidiaries as of December 31, 2007 (the “ Balance Sheet Date ”) (including the notes thereto) included in the Company SEC Documents, (ii) incurred after the Balance Sheet Date in the ordinary course of business consistent with past practice, (iii) as expressly contemplated by this Agreement or set forth in the Company Disclosure Schedule or (iv) as, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

          (d) The Company has established and maintains effective internal control over financial reporting (and, except as disclosed in the Company SEC Documents, since December 31, 2004 has had no material weaknesses with respect to its internal control over financial reporting) and disclosure controls and procedures (as such terms are defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP; such disclosure controls and procedures are designed to ensure that material information relating to the Company, including its consolidated Subsidiaries, required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded and reported to the Company’s principal executive officer and its principal financial officer by others within those entities to allow timely decisions regarding required disclosure; and such disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. The Company’s principal executive officer and its principal financial officer have

disclosed, based on their most recent evaluation, to the Company’s outside auditors and the audit committee of the Company’s Board of Directors (x) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial data and (y) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. The principal executive officer and the principal financial officer of the Company have made all certifications required by the Sarbanes-Oxley Act, the Exchange Act and any related rules and regulations promulgated by the SEC with respect to the Company SEC Documents, and the statements contained in such certifications are complete and correct. Any written notifications the Company has received of a “reportable condition” or “material weakness” (each as defined in the Statement of Auditing Standards No. 60, as in effect on the date hereof) in the Company’s internal control over financial reporting have been made available to Parent prior to the date hereof.

     3.6 Absence of Certain Changes . Except as set forth in Schedule 3.6 of the Company Disclosure Schedule, since the Balance Sheet Date, (a) the Company, together with its Subsidiaries, has carried on and operated its businesses in all material respects in the ordinary course of business consistent with past practice, (b) there have not been any events, changes, conditions, developments or occurrences that, individually or in the aggregate, have had or would be reasonably be expected to have a Company Material Adverse Effect and (c) neither the Company nor any of its Subsidiaries have taken any action that, if taken after the date hereof, would constitute a breach of Section 5.1 hereof.

     3.7 Legal Proceedings . Except as set forth in Schedule 3.7 of the Company Disclosure Schedule, here is no pending or, to the Knowledge of the Company, threatened, legal or administrative proceeding, claim, suit, action or, to the Knowledge of the Company, any pending investigation against the Company or any of its Subsidiaries (or any of their respective assets or properties), nor is there any injunction, order, writ, judgment, ruling or decree imposed upon the Company or any of its Subsidiaries, in each case, by or before any Governmental Authority that, individually or in the aggregate, has had or could reasonably be expected to have a Company Material Adverse Effect or, as of the date hereof, that challenges or relates to, or would prevent, materially delay or impair the consummation of, the proposed sale of the Company, this Agreement or any of the Transactions.

     3.8 Compliance With Laws; Permits . The Company and its Subsidiaries are in compliance with all laws, statutes, ordinances, codes, rules, regulations, decrees and orders of Governmental Authorities (collectively, “ Laws ”) applicable to the Company or any of its Subsidiaries or any of their respective properties and assets, except for such non-compliance as, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. The Company and each of its Subsidiaries hold all licenses, franchises, permits, certificates, approvals and authorizations from Governmental Authorities necessary for the lawful conduct of their respective businesses (collectively, “ Permits ”), except where the failure to hold the same, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. The Company and its Subsidiaries are in compliance with the terms of all Permits, except for such non-compliance as, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. The Company and its Subsidiaries are in compliance in all material respects with all applicable listing and corporate governance rules and regulations of the AMEX.

     3.9 Information Supplied .

          (a) Each Company Disclosure Document filed or required to be filed with the SEC for use in connection with the solicitation of proxies from the Company’s stockholders in connection with the Merger and the Stockholders’ Meeting, and any amendments or supplements thereto, when filed, distributed or disseminated, as applicable, will comply as to form in all material respects with the applicable requirements of the Exchange Act. The representations and warranties contained in this Section 3.9(a) will not apply to statements or omissions included in the Company Disclosure Documents based upon information furnished to the Company in writing by Parent or Purchaser specifically for use therein.

          (b) (i) Any Company Disclosure Document required to be mailed to stockholders of the Company, as supplemented or amended, if applicable, at the time such Company Disclosure Documents or any amendment or supplement thereto is first mailed to stockholders of the Company and, with respect to any Company Disclosure Document used in connection with the solicitation of proxies from the Company’s stockholders in connection with the Merger and the Stockholders’ Meeting, at the time such stockholders vote on adoption of this Agreement, and (ii) any Company Disclosure Document, at the time of the filing of such Company Disclosure Document or any supplement or amendment thereto with the SEC and at the time of any distribution or dissemination thereof, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties contained in this Section 3.9(b) will not apply to statements or omissions included in the Company Disclosure Documents based upon information furnished to the Company in writing by Parent or Purchaser specifically for use therein.

          (c) The information with respect to the Company or any of its Subsidiaries that the Company furnishes to Parent in writing specifically for use in the Schedule TO and the Offer Documents, at the time of the filing of the Schedule TO, at the time of any distribution or dissemination of the Offer Documents and at the time of the consummation of the Offer, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

     3.10 Tax Matters . Except for those matters that would not reasonably be expected to have a Company Material Adverse Effect and except as set forth in Schedule 3.10 of the Company Disclosure Schedule: (i) each of the Company and its Subsidiaries has timely filed, or has caused to be timely filed on its behalf (taking into account any extension of time within which to file), all Tax Returns required to be filed by it, and all such filed Tax Returns are correct and complete in all respects; (ii) all Taxes shown to be due on such Tax Returns have been timely paid and all Taxes payable (whether or not actually shown on such Tax Returns) have been adequately reserved for in the Company SEC Documents; (iii) no deficiency with respect to Taxes has been proposed, asserted or assessed against the Company or any of its Subsidiaries, which has not been fully paid or adequately reserved in the financial statements included in the Company SEC Documents in accordance with GAAP; (iv) no audit or other administrative or court proceedings are pending with any Governmental Authority with respect to Taxes of the Company or any of its Subsidiaries, and no written notice of threatened or proposed audit or proceeding has been received; (v) there

are no Liens for Taxes other than Permitted Liens upon any assets of the Company or any of its Subsidiaries and (vi) since the Balance Sheet Date, neither the Company nor any of its Subsidiaries has incurred any liability for Taxes other than in the ordinary course of business.

     3.11 Employee Benefits and Labor Matters .

          (a) Schedule 3.11(a) of the Company Disclosure Schedule lists (i) each “employee benefit plan” (as defined in Sectio