AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

A S E XECUTED

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

ICF CONSULTING GROUP, INC.

ICF INTERNATIONAL, INC.

ICF CONSULTING GROUP ACQUISITION, INC.

JONES & STOKES ASSOCIATES, INC.

THE OTHER PARTIES NAMED HEREIN

AND

JOHN W. COWDERY,

AS SHAREHOLDERS REPRESENTATIVE

Dated as of January 23, 2008

TABLE OF CONTENTS

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SCHEDULES

Schedule 1 - Definitions

Schedule 2.6.1 - Adjustments to Closing Working Capital

Schedule 2.9 - Other Employees

Schedule 3.1.1 - Company Qualified Jurisdictions

Schedule 3.1.2 - Subsidiary Qualified Jurisdictions

Schedule 3.2.1 - Company Shareholders of Record

Schedule 3.2.1(b) - Subsidiary Membership Interest Owners of Record

Schedule 3.2.2(a) - Options and Convertible Securities

Schedule 3.2.2(b) - Shareholder Agreements

Schedule 3.3 - Subsidiaries

Schedule 3.4.2 - No Conflict

Schedule 3.5 - Financial Statements

Schedule 3.6 - Dividends or Distributions

Schedule 3.7 - Liabilities

Schedule 3.8 - Books and Records

Schedule 3.9 - Accounts Receivable

Schedule 3.10 - Compliance with Applicable Laws

Schedule 3.11 - Litigation and Audits

Schedule 3.12.4 - Tax Assessments

Schedule 3.12.5 - Carryovers and Tax Basis

Schedule 3.12.9 - Income Items and Deductions

Schedule 3.12.14 - Joint Ventures and Partnerships

Schedule 3.13.1 - List of Plans

Schedule 3.13.4 - Plan Funding

Schedule 3.13.6 - Company Plans Not Amendable or Terminable

Schedule 3.13.7 - Payments Relating to the Transactions

Schedule 3.14.2 - List of Employees

Schedule 3.14.3(a) - Claim or Litigation Relating to Termination of Employment

Schedule 3.16 - Brokers or Finders Fees

Schedule 3.17.1 - Liabilities and Encumbrances to Title

Schedule 3.17.2(b) - Tangible Personal Property

Schedule 3.17.2(d) - Governmental-Owned Property

Schedule 3.18.2 - Leases

Schedule 3.19.1 - Material Company Contracts

Schedule 3.19.2 - Status of Material Company Contracts

Schedule 3.19.2(e) - Liquidated Damages Clause, Unlimited Liability or Consequential Damages

Schedule 3.19.3 - Consents

Schedule 3.19.4 - Other Work Arrangements

Schedule 3.20.1 - Intellectual Property

Schedule 3.20.2 - Owned and Registered Intellectual Property

Schedule 3.20.2(e) - Infringement of Company’s Proprietary Rights

Schedule 3.20.2(f) - Trademarks and Service marks

Schedule 3.20.2(i) - Restrictions on Sale, License or Distribution

Schedule 3.20.3 - Employee Confidentiality and Non-Competition Agreements

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Schedule 3.21 - Insurance and Indemnity Contracts

Schedule 3.22 - Banking Relationships

Schedule 3.23 - Absence of Certain Relationships

Schedule 3.25.1(a) - Government Contracts

Schedule 3.25.1(b) - Problems Under Government Contracts

Schedule 3.25.2 - Claims for Price Adjustment Under Government Contracts

Schedule 3.25.3 - Audit of Government Contracts

Schedule 3.25.4 - Outstanding Claims or Disputes Relating to Government Contracts

Schedule 3.25.6 - Terminated Government Contracts

Schedule 3.25.7 - Government Contracts Outside the Scope

Schedule 3.25.8 - Assigned Government Contracts

Schedule 3.25.11 - At Risk Government Contracts

Schedule 3.27 - Lost Customers

Schedule 3A.6 - Broker’s or Finder’s Fees Paid by Principal Shareholder

Schedule 5.1 - Conduct of Company’s Business

Schedule 6.14(a) - Notes or Debt Instruments Payable to Shareholders

Schedule 6.14(b) - Notes Payable to the Company

Schedule 7.2.4 - Obtained Consents

Schedule 7.2.5(b)(i) - Acceptance of Employment

Schedule 7.2.5(b)(ii) - Standard Terms and Conditions of Employment

Schedule 7.2.5(c)(i) - Full-Time Billable U.S. Employees of Company

Schedule 7.2.5(c)(ii) - Buyer’s Standard Documentation

Schedule 7.2.19 - Customer Interviews and Diligence Inquiries

Schedule 7.2.22 - Release of Encumbrances

EXHIBITS

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER, dated as of January 23, 2008 (this “Agreement”), by and among ICF Consulting Group, Inc., a Delaware corporation (“Buyer”), ICF International, Inc., a Delaware corporation (“Buyer’s Parent”), ICF Consulting Group Acquisition, Inc., a California corporation (“Merger Sub”), Jones & Stokes Associates, Inc., a California corporation (the “Company”), the Company shareholders listed on the signature pages to this Agreement under the caption “Principal Shareholders” (each, a “Principal Shareholder” and collectively, the “Principal Shareholders”) and John W. Cowdery as Shareholders Representative. Buyer, Buyer’s Parent, Merger Sub, the Company, the Principal Shareholders and Shareholders Representative are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

A. The Principal Shareholders collectively own approximately 25% of the Company’s outstanding capital stock.

B. Merger Sub is a wholly owned subsidiary of Buyer, and Buyer is a wholly owned subsidiary of Buyer’s Parent.

C. The boards of directors of Buyer, Buyer’s Parent, Merger Sub and the Company have each approved this Agreement and the transactions contemplated hereby (the “Transactions”) and have determined that it is in the best interests of their respective shareholders for Merger Sub to merge with and into the Company (the “Merger”) on the terms and conditions set forth in this Agreement.

D. The Company’s board of directors has resolved to recommend the Merger to the holders of the Company’s capital stock, has determined that the Merger Consideration is fair to the holders of the Company’s capital stock, and has resolved to recommend that the holders of the Company’s capital stock accept the Merger Consideration and approve the Merger on the terms and conditions set forth herein.

E. The Parties desire to make certain representations, warranties, covenants and other agreements in connection with the Transactions.

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

ARTICLE 1

CERTAIN MATTERS OF CONSTRUCTION AND DEFINITIONS

Certain matters of construction of this Agreement and the definition of capitalized terms used herein but not otherwise defined in Articles 1 through 9 are set forth in Schedule 1.

ARTICLE 2

THE MERGER

2.1 The Merger . Upon the terms and conditions set forth in this Agreement, and in accordance with the laws of the State of California, including the California Corporations Code known as the “California General Corporation Law” (the “CGCL”), Merger Sub shall be merged with and into the Company at the Effective Time (as defined below). Following the Effective Time the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation (the “Surviving Corporation”). At Buyer’s election, any Subsidiary whose capital stock is wholly owned by Buyer may be substituted for Merger Sub as a constituent corporation in the Merger. In such event, the Parties agree to execute an appropriate amendment to this Agreement to reflect the foregoing.

2.2 Effect of the Merger . At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Agreement of Merger and the applicable provisions of the CGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers, franchises and all other assets of every kind and description of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of each of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

2.3 Articles of Incorporation and Bylaws .

2.3.1 Articles of Incorporation . At the Effective Time, the articles of incorporation of Merger Sub shall be, until thereafter amended as provided by the CGCL and such articles of incorporation, the articles of incorporation of the Surviving Corporation, provided, however, that the name of the Surviving Corporation shall be “Jones & Stokes Associates, Inc.”

2.3.2 Bylaws . At the Effective Time, the bylaws of Merger Sub shall be the bylaws of the Surviving Corporation until thereafter amended or repealed in accordance with their terms, the articles of incorporation of the Surviving Corporation or as provided by the CGCL.

2.4 Directors and Officers . The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation until the earlier of each of their resignations or removals or until each of their respective successors are duly elected and qualified, as the case may be. The officers of Merger Sub immediately prior to the Effective Time, and such other individuals as Buyer shall designate, shall be the officers of the Surviving Corporation until the earlier of each of their deaths, resignations or removals or until each of their respective successors are duly elected and qualified, as the case may be.

2.5 Effect on Capital Stock . As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any outstanding capital stock of the Company or Merger Sub:

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(a) Each share of common stock, par value $0.05 per share, of the Company (the “Common Stock” or “Shares”) issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares shall be converted into the right to receive the following (collectively, the “Per Share Merger Consideration”): (i) an amount in cash equal to the Per Share Net Closing Amount; (ii) a conditional amount in cash equal to the Per Share Working Capital Adjustment Amount; and (iii) a conditional amount in cash equal to the Per Share Indemnity Escrow Amount. The aggregate amount of Per Share Merger Consideration payable to the Company’s shareholders (collectively, the “Shareholders” and individually, a “Shareholder”) under this Agreement is referred to herein as the “Merger Consideration.”

(b) Each Option shall be terminated and cease to exist, and no consideration shall be delivered in exchange therefor.

(c) Each issued and outstanding share of common stock of Merger Sub shall be converted into and become one fully paid and non-assessable share of common stock of the Surviving Corporation.

(d) Notwithstanding anything in this Agreement to the contrary, any issued and outstanding Common Stock held by a Shareholder who objects to the Merger and complies with Chapter 13 of the CGCL (a “Dissenting Shareholder”) concerning the right of holders of Common Stock to dissent from the Merger and require appraisal of their Common Stock (“Dissenting Shares”) shall not be converted as described in Section 2.5(a) but shall become the right to receive such consideration as may be determined to be due to such Dissenting Shareholder pursuant to Chapter 13 of the CGCL. If, after the Effective Time, any Dissenting Shareholder withdraws its demand for appraisal or fails to perfect or otherwise loses its right of appraisal, in any case pursuant to the CGCL, all of its Common Stock shall be deemed to be converted as of the Effective Time into the right to receive the consideration described in Section 2.5(a). The Company shall give Buyer (i) prompt written notice of any demands for appraisal received by the Company, and (ii) the opportunity to participate in all negotiations and proceedings with respect to any such demands. The Company will not voluntarily make any payment with respect to any demands for appraisal and will not, except with Buyer’s prior written consent, settle or offer to settle any such demands. The Company will provide to the Shareholders all notices required by Chapter 13 of the CGCL concerning the rights of the Shareholders to exercise Dissenters’ Rights.

2.6 Purchase Price Adjustment.

2.6.1 Estimated Closing Statements . At least two Business Days prior to the Closing Date (as defined below), the Company shall provide to Buyer in reasonable detail an estimate of the Closing Balance Sheet (the “Estimated Closing Balance Sheet”) and an estimate of the Closing Working Capital (the “Estimated Closing Working Capital”). The Estimated Closing Balance Sheet and the Estimated Closing Working Capital shall be prepared in accordance with GAAP, as adjusted pursuant to Schedule 2.6.1, and on a basis consistent with the historical accounting policies, methodologies, practices and assumptions applied by the Company, provided such historical policies, methodologies, practices and assumptions are in accordance with GAAP, as adjusted pursuant to Schedule 2.6.1.

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2.6.2 Adjustment to Purchase Price .

2.6.2.1 Working Capital and Preliminary Adjustment .

Within 90 days after the Closing Date, Buyer shall prepare or cause to be prepared and shall deliver to Shareholders Representative in reasonable detail the Closing Balance Sheet and statement of Closing Working Capital (collectively the “Closing Statements”). The date of such delivery is also referred to herein as the “Closing Balance Sheet Delivery Date.” The Closing Balance Sheet and the Closing Working Capital shall be prepared in accordance with GAAP, as adjusted pursuant to Schedule 2.6.1, and on a basis consistent with the historical accounting policies, methodologies, practices and assumptions applied by the Company, provided such historical policies, methodologies, practices and assumptions are in accordance with GAAP, as adjusted pursuant to Schedule 2.6.1.

2.6.2.2 Review of Closing Statements . Shareholders Representative, upon receipt of the Closing Statements, shall (a) review the Closing Statements and (b) to the extent Shareholders Representative may deem necessary, make reasonable inquiry of Buyer and its accountants (if any are used) in respect of the preparation of the Closing Statements. Shareholders Representative and its advisors shall have access upon prior notice and during normal business hours to review the books, papers and records of the Company and its accountants (if any are used), relating to the preparation of the Closing Statements in connection with such inquiry. The Closing Statements shall be final, binding and conclusive upon, and deemed accepted by, the Shareholders unless Shareholders Representative shall have notified Buyer in reasonable detail of any objections thereto within 30 days after his receipt of the Closing Statements (the “Shareholders Objection”).

2.6.2.3 Disputes . If a Shareholders Objection occurs, Buyer shall have 20 days to review and respond to the Shareholders Objection, and Buyer and Shareholders Representative shall attempt to resolve the differences underlying the Shareholders Objection following completion of Buyer’s review of the Shareholders Objection. Disputes between Buyer and Shareholders Representative that are not resolved by them by the end of the 40-day period following delivery to Buyer of the Shareholders Objection shall be referred no later than such 40th day for decision to an independent accounting firm of national reputation mutually acceptable to Buyer and Shareholders Representative (the “Arbiter”) who shall act as arbitrator and make a final determination, based solely on presentations by Shareholders Representative and Buyer and only with respect to the remaining differences so submitted. If Buyer and Shareholders Representative cannot agree upon the selection of the Arbiter within five Business Days, Ernst & Young LLP shall serve as the Arbiter hereunder. The Arbiter shall deliver its written determination as to whether and to what extent, if any, the Closing Statements require adjustment to Buyer and Shareholders Representative no later than the 30th day after the remaining differences underlying the Shareholders Objection are referred to the Arbiter, or such longer period of time as the Arbiter determines is necessary. The Arbiter’s determination pursuant to this Section 2.6.2.3 shall be final, conclusive and binding upon the Parties. The fees and expenses of the Arbiter will be borne by Buyer on the one hand and the Shareholders, jointly and severally, on the other hand, in proportion to the allocation by the Arbiter of the dollar amount of the disputed portion of the Working Capital Adjustment (as defined below), such that the prevailing Party (or Parties) pays a lesser proportion of such fees and expenses. Buyer and

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Shareholders Representative shall make readily available to the Arbiter all relevant information, books and records and any work papers relating to the Closing Statements and all other items reasonably requested by the Arbiter. In no event may the Arbiter’s resolution of any difference be for an amount which is outside the range of Buyer’s and Shareholders Representative’s disagreement.

2.6.2.4 Final Closing Statements . Each of the Closing Statements, as it may be adjusted, shall become final, conclusive and binding upon the Parties upon the earliest of (a) the final date for notice by Shareholders Representative of a Shareholders Objection if Shareholders Representative does not provide Buyer with a Shareholders Objection within the period permitted under Section 2.6.2.2, (b) the date of an agreement between Buyer and Shareholders Representative with respect thereto, and (c) the date on which written notice of the decision by the Arbiter with respect to any disputes under Section 2.6.2.3 is provided to Buyer and Shareholders Representative. The Closing Statements (i) as submitted to Shareholders Representative if Shareholders Representative does not object thereto within the period permitted under Section 2.6.2.2, (ii) as adjusted pursuant to the agreement of Shareholders Representative and Buyer or (iii) as determined by the decision of the Arbiter, are referred to herein as the “Final Closing Statements” and shall be final, conclusive and binding on the Parties. The date on which the Final Closing Statements become final, conclusive and binding is referred to herein as the “Final Closing Statements Determination Date.”

2.6.2.5 Final Working Capital Adjustment .

(a) The following shall be applicable to the determination of the Merger Consideration:

(i) If the Closing Working Capital reflected in the Final Closing Statements (the “Final Closing Working Capital”) is less than the Estimated Closing Working Capital, the “Working Capital Decrease” shall be the positive difference between the Final Closing Working Capital and the Estimated Closing Working Capital.

(ii) If the Final Closing Working Capital is greater than the Estimated Closing Working Capital the “Working Capital Increase” shall be the positive difference between the Final Closing Working Capital and the Estimated Closing Working Capital.

(b) If there shall be either a Working Capital Decrease or a Working Capital Increase (either, a “Working Capital Adjustment”), such Working Capital Adjustment shall be effected as follows:

(i) If there shall be a Working Capital Decrease, within three Business Days after the Final Closing Statements Determination Date, Buyer and Shareholders Representative shall cause the Escrow Agent (A) to release and disburse to Buyer an amount equal to the Working Capital Decrease from the Working Capital Escrow and, to the extent the Working Capital Decrease is in excess of the Working Capital Escrow, any such additional amounts shall be released and disbursed to Buyer from the Indemnity Escrow (such amount disbursed from the Indemnity Escrow shall be referred to as the “Working Capital Indemnity Amount”) and (B) to hold and disburse any amounts remaining in the Working Capital Escrow

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after giving effect to the forgoing disbursement to Buyer in respect of the Working Capital Decrease, as part of the Indemnity Escrow in accordance with this Agreement and the Escrow Agreement; and

(ii) If there shall be a Working Capital Increase, within three Business Days after the Final Closing Statements Determination Date, (A) Buyer shall cause the Escrow Agent to release and pay, or if there shall be a separate Paying Agent, deposit with such Paying Agent for payment of, an amount equal to such Working Capital Increase, and to the extent the Working Capital Increase is in excess of the Working Capital Escrow, Buyer shall deposit, or cause to deposited with the Escrow Agent, or if there is a separate Paying Agent, with such Paying Agent, an amount equal to such excess, with such amount of the Working Capital Increase referenced in this clause (A) to be paid to the Shareholders as the Per Share Final Working Capital Adjustment Amount in accordance with this Agreement, and (B) Buyer and Shareholders Representative shall cause any remaining amount in the Working Capital Escrow after giving effect to the foregoing disbursement to the Shareholders, to be held and disbursed by the Escrow Agent as part of the Indemnity Escrow in accordance with this Agreement and the Escrow Agreement.

(c) If the Final Closing Statements do not reflect any Working Capital Adjustment, within three Business Days after the Final Closing Statements Determination Date, Buyer and Shareholders Representative shall cause the Escrow Agent to hold and disburse the Working Capital Escrow as part of the Indemnity Escrow in accordance with this Agreement and the Escrow Agreement.

2.7 Payment of Merger Consideration .

2.7.1 The Company shall designate a Person to act as paying agent in the Merger (the “Paying Agent”), which may be the Escrow Agent, and, from time to time on, prior to or after the Effective Time, Buyer shall, in accordance with this Agreement, make available, or cause the Surviving Corporation to make available, to the Escrow Agent, or if there is a separate Paying Agent, to such Paying Agent, Escrow Funds and other funds in the amounts and at the times necessary for payment of the Merger Consideration in accordance with this Agreement.

2.7.2 As soon as practicable after the Effective Time, and no later than five Business Days thereafter, the Surviving Corporation shall cause the Escrow Agent to mail to each Shareholder, as of the Effective Time, a letter of transmittal, which, among other things, shall state (a) the instructions for surrendering and transferring such Shareholder’s interest in his or her Common Stock entitled to payment of Merger Consideration pursuant to this Section 2.7 (other than Dissenting Shares), and (b) that title to the Common Stock shall pass, only upon proper delivery to the Paying Agent of the necessary documents of surrender and transfer and upon adherence to the procedures set forth in the letter of transmittal (the “Letter of Transmittal”). Immediately following the distribution of the Letter of Transmittal, each Shareholder shall deliver to Escrow Agent, the properly completed and executed Letter of Transmittal, accompanied by delivery of all appropriate Tax forms as reasonably required by Buyer, and Buyer shall deliver to the Escrow Agent, or if there is a separate Paying Agent, to such Paying Agent, an amount equal to the product of (x) the Per Share Net Closing Amount and

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(y) the number of shares of Common Stock held by the Shareholders immediately prior to the Effective Time. Immediately following the Effective Time, Buyer shall deliver or cause to be delivered the Shareholders Representative Initial Expenses Amount by wire transfer to the account specified by Shareholders Representative.

2.7.3 In the event of a transfer of ownership of Common Stock that is not registered in the transfer records of the Company, payment may be made to a Person other than the Person in whose name the Common Stock so surrendered are registered, if an assignment is delivered to the Escrow Agent, in proper form evidencing the transfer and the Person requesting such payment shall pay any transfer or other taxes required by reason of the payment to a Person other than the registered holder of such Common Stock or establish to the satisfaction of the Surviving Corporation that such tax has been paid or is not applicable.

2.7.4 Until surrendered as contemplated by Section 2.7.2, each share of Common Stock shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the amount of Merger Consideration into which the Common Stock shall have been converted pursuant to Section 2.5. No interest will be paid or will accrue on the cash payable upon the surrender of any Common Stock; provided, however, that interest earned on amounts in escrow pursuant to Section 2.8 and the Escrow Agreement shall be payable to the Shareholders in accordance with this Agreement and the Escrow Agreement.

2.7.5 All Merger Consideration paid upon the surrender of Common Stock in accordance with this Section 2.7 shall be deemed to have been paid in full satisfaction of all rights pertaining to the Common Stock. At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the Common Stock that was outstanding immediately prior to the Effective Time. If, after the Effective Time, evidence of Common Stock owned by a Person is presented to the Surviving Corporation for any reason, such Common Stock shall be canceled and exchanged as provided in this Section 2.7.

2.7.6 Notwithstanding the foregoing, none of Buyer, Merger Sub or the Company shall be liable to any Person in respect of any cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

2.8 Escrow Fund .

2.8.1 Establishment of Escrow Fund . At the Effective Time, Buyer will deliver to Commerce Bank, National Association, as escrow agent (the “Escrow Agent”), the sums of $2,500,000 (the “Working Capital Escrow”) and $5,000,000 (together with such portion of the Working Capital Escrow that, pursuant to Sections 2.6.2.5(a) or (b), becomes a part thereof, the “Indemnity Escrow,” and together with the Working Capital Escrow, the “Escrow Fund”). Such deposits shall be governed by the terms and conditions set forth herein and in the Escrow and Paying Agent Agreement, dated as of the Closing Date, among Buyer, Shareholders Representative and the Escrow Agent, substantially in the form of Exhibit A (the “Escrow Agreement”).

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2.8.2 Use of Escrow Fund . By virtue of the approval of this Agreement and the Merger by the Shareholders pursuant to the CGCL, the Shareholders, without any further act, will have consented to and approved, and shall be deemed to have consented to and approved (a) the use of the Escrow Fund for payments to Buyer on behalf of the Shareholders for Working Capital Adjustments and indemnification obligations set forth in Sections 2.6.2.5, 6.3 and 6.7, as the case may be, (b) the deduction of an aggregate of up to $50,000 from the amounts otherwise payable by Buyer to the Shareholders to provide funds to cover the initial expenses of Shareholders Representative (the “Shareholders Representative Initial Expenses Amount”) and (c) all of the other terms and conditions in the Escrow Agreement. The Shareholders Representative shall notify Buyer in writing no later than three days prior to Closing of the exact amount of the Shareholders Representative Initial Expenses Amount.

2.9 Employment Agreements . Concurrently with the execution and delivery of this Agreement, (a) Buyer is entering into an employment agreement dated as of the date hereof with John W. Cowdery (the “Cowdery Employment Agreement”) and (b) each of the individuals listed on Schedule 2.9 is agreeing to Buyer’s standard terms and conditions relating to employment, including consent to background checks or verification procedures, and is entering into non-compete, non-solicitation and non-disturbance agreements (such agreements and standard terms and conditions collectively, the “Other Employment Related Agreements”), which agreements and terms and conditions shall become effective automatically, without any further action, upon the Closing.

2.10 Termination of Option Plan. Before the Closing Date, the Company’s board of directors (the “Company Board”) shall adopt such resolutions and take (or cause the Company to take) such other actions as are required to provide that before the Effective Time, each Option will either be exercised for Common Stock or terminated in accordance with the Option and Option Plan. In connection therewith, the Company shall notify all holders of Options, that as of the Effective Time, unexercised Options will be terminated and of no further force or effect. The Company Board and the Company will take all legally and contractually required actions to terminate the Option Plan and all unexercised Options as of the Effective Time, all in a manner so that the Surviving Corporation will have no payment, share issuance or other Liability in respect thereof.

2.11 The Closing . Subject to the satisfaction (or waiver) of all of the conditions precedent set forth in Article 7 (the “Closing Conditions”), the closing of the Merger and the other Transactions (the “Closing”) shall take place at Buyer’s offices, located at 9300 Lee Highway, Fairfax, VA 22031, commencing at 10 a.m. local time (a) on February 7, 2008, or (b) if the Closing Conditions have not been satisfied (or waived) by such date, on such other date that is the first Business Day after the date on which all of the Closing Conditions (other than such conditions to be satisfied on the Closing Date) are satisfied (or waived) or (c) on such other date as the Parties may agree after the satisfaction (or waiver) of all the Closing Conditions (“Closing Date”). At the Closing, the Parties shall cause the Merger to be consummated by filing the duly executed Agreement of Merger with the Secretary of State of the State of California, in accordance with the relevant provisions of the CGCL (the date and time of such filing is referred to herein as the “Effective Time”).

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Buyer and Buyer’s Parent as follows:

3.1 Corporate Status .

3.1.1 Corporate Status of the Company . The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California with the requisite corporate power to own, operate and lease its properties and to carry on its business as currently being conducted. As of the Closing, the Company will be duly qualified or licensed to do business as a foreign corporation and is in good standing in all jurisdictions in which the character of the properties owned or held under lease by the Company or the nature of the business transacted by the Company makes qualification necessary, except where failure to be so qualified would not have a Company Material Adverse Effect. Schedule 3.1.1 lists (a) all jurisdictions in which the Company is qualified to do business and (b) all additional jurisdictions in which the Company will be qualified to do business as of the Closing.

3.1.2 Corporate Status of the Company’s Subsidiaries . Each of the Company’s Subsidiaries (each, a “Company Subsidiary” and collectively, the “Company Subsidiaries”) is duly formed as a limited liability company, validly existing and in good standing under the laws of the jurisdiction of its formation with the requisite company power to own, operate and lease its properties and to carry on its business as currently being conducted. Each of the Company Subsidiaries is duly qualified or licensed to do business as a foreign company and is in good standing in all jurisdictions in which the character of the properties owned or held under lease by such Company Subsidiary or the nature of the business transacted by such Company Subsidiary makes qualification necessary, except where failure to be so qualified would not have a Company Material Adverse Effect. All jurisdictions in which each Company Subsidiary is qualified to do business are set forth, by Company Subsidiary, on Schedule 3.1.2.

3.2 Capital Stock .

3.2.1 Authorized Stock and Ownership .

(a) The authorized capital stock of the Company consists solely of 4,000,000 shares of Common Stock. As of the date hereof, 171,520.87 shares of Common Stock are issued and outstanding, and such Common Stock is held and owned of record as set forth on Schedule 3.2.1. As of the Closing, there will be no more than 183,316.70 shares of Common Stock issued and outstanding (which includes all of the Common Stock issued or issuable pursuant to the exercise of Options prior to the Effective Time). All of the outstanding Common Stock (i) has been duly authorized and validly issued, (ii) is uncertificated in compliance with the CGCL, (iii) is fully paid and nonassessable, and (iv) was issued and is held and owned in compliance with the CGCL and the Company’s articles of incorporation, as amended and restated, and bylaws. None of the outstanding Common Stock was issued in violation of any Person’s preemptive or

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similar rights. All of the issued and outstanding Common Stock has been issued in compliance with all applicable U.S. federal, foreign, state, regional and provincial securities laws.

(b) The membership interest in each Company Subsidiary is beneficially owned and held of record as set forth on Schedule 3.2.1(b), and the entire membership interest of each Company Subsidiary as owned by the Company as set forth on Schedule 3.2.1(b) is solely and beneficially owned and held of record by the Company, free and clear of any and all Encumbrances. The entire membership interest in each Company Subsidiary as owned by the Company as set forth on Schedule 3.2.1(b) was validly transferred to the Company free of any options, warrants or other rights, including preemptive rights, relating to the equity interests of such Company Subsidiaries.

3.2.2 Options and Convertible Securities .

(a) Except as set forth in Schedule 3.2.2(a), as of the date hereof, there are no outstanding subscriptions, options, warrants, conversion rights or other rights, securities, agreements or commitments obligating the Company or any Company Subsidiary to issue, sell or otherwise transfer any of its capital stock or other equity interests, or any securities or obligations convertible into, or exercisable or exchangeable for, any Common Stock or other capital stock or other equity interest of the Company or any Company Subsidiary.

(b) Except as set forth on Schedule 3.2.2(b), there are no voting trusts, shareholder agreements or other agreements or understandings to which the Company or, to the Company’s Knowledge, any Principal Shareholder is a party with respect to the voting of Common Stock or any other equity security of any of the Company or the Company Subsidiaries, and the Company is not a party to or bound by any outstanding restrictions, options or other obligations, agreements or commitments to sell, repurchase, redeem or acquire any outstanding Common Stock or other equity securities of the Company or any Company Subsidiary.

(c) All of the Options are, and will be upon exercise or termination, incentive stock options within the meaning of Code Section 422.

(d) At the Effective Time, there will be no outstanding subscriptions, options (including Options), warrants, conversion rights or other rights, securities, agreements or commitments obligating the Company or any Company Subsidiary to issue, sell or otherwise transfer any of its capital stock or other equity interests, or any securities or obligations convertible into, or exercisable or exchangeable for, any Common Stock or other capital stock or other equity interest of the Company or any Company Subsidiary.

3.3 Subsidiaries . Except as set forth on Schedule 3.3, the Company does not have any Subsidiaries and, except as set forth on Schedule 3.3, the Company does not otherwise own or have a contractual right or obligation to acquire any capital stock or other securities or equity of any Person.

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3.4 Authority for Agreement; Noncontravention .

3.4.1 Authority . The Company has the corporate power and authority to enter into and deliver this Agreement, to perform its obligations hereunder and, subject to obtaining requisite Shareholder Approval, to consummate the Transactions to the extent of its obligations hereunder. The execution and delivery of this Agreement by the Company and its consummation of the Transactions, to the extent of its obligations hereunder, have been duly and validly authorized by the Company Board and no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement and, subject to obtaining requisite Shareholder Approval, the consummation of the Transactions, to the extent of its obligations hereunder. This Agreement and, when executed and delivered, the other agreements contemplated hereby to be signed by the Company have been, or with respect to such other agreements, will be duly executed and delivered by the Company and constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms.

3.4.2 No Conflict . Except as set forth on Schedule 3.4.2, neither the execution and delivery of this Agreement or the other agreements contemplated hereby to be signed by the Company, nor the performance by the Company of its obligations hereunder or thereunder, nor the consummation by the Company of the Transactions, to the extent of its obligations hereunder or thereunder, will (a) conflict with or result in a violation of any provision of its articles of incorporation, as amended and restated, or bylaws (collectively, “Organizational Documents”), or (b) with or without the giving of notice or the lapse of time, or both, conflict in any material respect with, or result in any violation or breach of, or constitute a material default under, or result in any right to accelerate or result in the creation of any Encumbrance pursuant to, or right of termination under, any provision of any note, mortgage, indenture, lease, instrument or other agreement, Permit, judgment, order, decree, statute, ordinance, rule or regulation to which the Company is a party or by which it or any of its assets or properties is bound or which is applicable to it or any of its assets or properties. No Governmental Authorization is necessary for the execution and delivery of this Agreement or any of the other agreements contemplated hereby to be signed by the Company and, except as set forth on Schedule 3.4.2, for the consummation of the Transactions by the Company.

3.5 Financial Statements . Schedule 3.5 sets forth (a) the balance sheets of the Company as of December 31, 2006 and January 1, 2006, and the statements of income, shareholders’ equity and cash flows of the Company for the fiscal years ended December 31, 2006 and January 1, 2006, as audited by Brown Fink Boyce & Astle, LLP, certified public accountants, and (b) the unaudited balance sheet of the Company as of December 30, 2007 (the “Balance Sheet Date”) and the unaudited statements of income, shareholders’ equity and cash flows of the Company for the twelve months ended December 30, 2007. Collectively, the financial statements referred to in the immediately preceding sentence are sometimes referred to herein as the “Company Financial Statements,” and the balance sheet of the Company as of December 30, 2007 is referred to herein as the “Company Balance Sheet.” Each of the balance sheets included in the Company Financial Statements (including any related notes) fairly presents in all material respects the financial position of the Company as of its date, and the other statements included in the Company Financial Statements (including any related notes) fairly present in all material respects the statements of income, shareholders’ equity and cash flow, as

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the case may be, of the Company for the periods therein set forth, in each case in accordance with GAAP subject, in the case of such unaudited financial statements of the Company as of December 30, 2007 and for the twelve months ended December 30, 2007, to normal recurring year-end audit adjustments (which, individually and in the aggregate, shall not be material in amount) and the absence of footnotes.

3.6 Absence of Material Adverse Changes . Since the Balance Sheet Date, the Company and the Company Subsidiaries, taken as a whole, have not suffered any Company Material Adverse Effect, nor, to the Company’s Knowledge, has there occurred or arisen any event or state of facts of any character that would reasonably be expected to result in a Company Material Adverse Effect. Except as set forth on Schedule 3.6, since the Balance Sheet Date, there have been no dividends or other distributions declared or paid in respect of, or any repurchase or redemption by the Company of, any Common Stock or other capital stock of the Company, or any commitment relating to any of the foregoing.

3.7 Absence of Undisclosed Liabilities . Neither the Company nor any Company Subsidiary has any liabilities or obligations, fixed, accrued, contingent or otherwise (each, a “Liability, “ and collectively, “Liabilities”), that are material and not fully reflected or provided for on, or disclosed in the notes to, the balance sheet at December 30, 2007 included in the Company Financial Statements or the Company Balance Sheet, except (a) Liabilities incurred in the ordinary course of business since the Balance Sheet Date, none of which individually or in the aggregate has had or would reasonably be expected to have a Company Material Adverse Effect, and (b) Liabilities expressly disclosed in Schedule 3.7. As of the Closing, the Company and the Company Subsidiaries will have no Liability for, or otherwise in respect of, borrowed money.

3.8 Books and Records . Except as set forth on Schedule 3.8, the books of account, minute books, stock record books and other records of each of the Company and each Company Subsidiary, all of which have been made available to Buyer, are complete and correct in all material respects and have been maintained in accordance with sound business practices. Such records include all Tax accrual work papers of the Company and the Company Subsidiaries and include an inventory and identification of all open tax positions and units of account, as such terms are understood under FASB Interpretation No. 48 (“FIN 48”), of the Company and the Company Subsidiaries. The actions reflected in such minute books are accurate and complete records of the meetings reported in such minute books, and, except where the failure to do so will not have a Company Material Adverse Effect or except as set forth on Schedule 3.8, no meeting of any shareholders of the Company or any Company Subsidiary, the Company Board or committee of the Company Board, or the board of directors (or any committees thereof) of any Company Subsidiary has been held for which minutes have not been prepared and are not contained in such minute books. At the Closing, all of those books and records will be in the Company’s possession.

3.9 Accounts Receivable . All accounts receivable of the Company or any Company Subsidiary, whether or not billed (collectively, “Accounts Receivable”), that are reflected on the Company Balance Sheet or recorded on the books or accounting records of the Company or any Company Subsidiary since the Balance Sheet Date are valid obligations arising from sales actually made or services actually performed in the ordinary course of business. Unless paid

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prior to the Closing Date, the Accounts Receivable reflected on the balance sheet included in the Final Closing Statements are, or will be as of the Closing Date, collectible in full subject to any reserves therefor as set forth on such balance sheet. There is no contest, claim or right of set-off under any Material Company Contract with any obligor of an Accounts Receivable reflected on the balance sheet included in the Final Closing Statements relating to the amount or validity of such Accounts Receivable. Schedule 3.9 contains a complete and accurate list of all Accounts Receivable as of December 30, 2007, including a list of the Accounts Receivable that are billed (including the name of the client and invoice number, date and amount), a list of the Accounts Receivables that are unbilled and information regarding the aging of such Accounts Receivable.

3.10 Compliance with Applicable Laws, Organizational Documents . Except as set forth in Schedule 3.10, each of the Company and the Company Subsidiaries has all requisite licenses, permits and certificates from all Governmental Entities (collectively, “Permits”) necessary to conduct its business as currently conducted (including any brokerage of assets), and to own, lease and operate its properties in the manner currently held and operated, and such Permits are in full force and effect, except for any Permits the absence of which, or whose failure to be in full force and effect, in the aggregate, do not and could not reasonably be expected to have a Company Material Adverse Effect or prevent or materially delay the consummation of the Transactions. Each of the Company and the Company Subsidiaries is in compliance in all material respects with all the terms and conditions related to such Permits. There are no proceedings in progress, pending or, to the Company’s Knowledge, threatened, that are reasonably likely to result in revocation, cancellation, suspension, or any material adverse modification of any of such Permits. The Company’s business has not been since December 31, 2003, and is not currently being conducted in violation of any Applicable Laws, Permits or other authorizations of any Governmental Entity which could have a Company Material Adverse Effect. The Company is not in default or violation of any provision of its Organizational Documents. None of the Company Subsidiaries is in default or violation of any provision of its respective incorporation or formation document, memorandum of association, bylaws, articles of association, company or operating agreement, or other constitutional documents (collectively, “Constitutional Documents”).

3.11 Litigation and Audits . Except for any demand or similar letter, action, suit or proceeding set forth on Schedule 3.11, (a) to the Company’s Knowledge, there is no investigation by any Governmental Entity with respect to the Company or any Company Subsidiary pending or threatened; (b) to the Company’s Knowledge, no Governmental Entity has informed the Company that it intends to conduct an investigation with respect to the Company or any Company Subsidiary; (c) there is no demand or similar letter, action, suit, arbitration or proceeding pending or, to the Company’s Knowledge, threatened against or involving the Company or any Company Subsidiary, or any of their respective assets or properties; and (d) to the Company’s Knowledge, there are no judgments, decrees, injunctions or orders of any Governmental Entity or arbitrator outstanding against the Company or any Company Subsidiary.

3.12 Tax Matters .

3.12.1 Filing of Returns . Each of the Company and each Company Subsidiary has prepared and filed on a timely basis with all appropriate Governmental Entities all returns in respect of Taxes that such Company or Company Subsidiary is required to file on or

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prior to the Closing, and all such returns are correct and complete in all respects. No claim has been made by any Governmental Entity in a jurisdiction (domestic or foreign) where the Company or any Company Subsidiary does not file returns in respect of Taxes that the Company or such Company Subsidiary is or may be subject to taxation in such jurisdiction.

3.12.2 Payment of Taxes . Each of the Company and the Company Subsidiaries has paid in full all Taxes due on or before the Closing. In the case of Taxes that may be owing with respect to prior periods for which no return was filed, or Taxes accruing for the period ending (or in the case of Straddle Period Taxes, deemed to have accrued) on or before the Closing that are not due on or before the Closing, each of the Company and each Company Subsidiary has made adequate provision in its books and records and on the face of its financial statements (rather than in any notes thereto) for such payment. There are no Encumbrances on any of the assets of the Company or any Company Subsidiary that arose in connection with any failure (or alleged failure) to pay any Tax. Since December 31, 2000, none of the Company or the Company Subsidiaries has incurred any Liability for Taxes arising from extraordinary gain or loss as that term is used in GAAP, outside the ordinary course of its business. There is no dispute or claim concerning any Tax Liability of any of the Company or the Company Subsidiaries claimed or raised by any Governmental Entity.

3.12.3 Withholding . Each of the Company and the Company Subsidiaries has either withheld from each payment made or owing to any of its respective current or former employees, officers, directors, independent contractors, creditors, shareholders, members or other third party, including in respect to any options to purchase Common Stock exercised by such Persons in connection with the Transactions, all amounts required by Applicable Laws to be withheld or has provided for amounts not withheld in the provision for Taxes described in Section 3.12.2, and has, where required, remitted such amounts within the applicable periods to the appropriate Governmental Entities. All Forms W-2 and 1099 and similar documents required to be filed with respect to amounts withheld by or on behalf of any of the Company or the Company Subsidiaries have been properly completed and timely filed. No portion of the Merger Consideration is subject to the Tax withholding provision of Section 3406 or Subchapter A of Chapter 3 of the Code or of any other Tax law.

3.12.4 Assessments . There are no assessments of the Company or any Company Subsidiary with respect to Taxes that have been issued and are outstanding. Since December 31, 2000, no Governmental Entity has examined or audited the Company or any Company Subsidiary in respect of Taxes. Except as set forth on Schedule 3.12.4, since December 31, 2000, none of the Company or the Company Subsidiaries has received any notice from any Governmental Entity (a) indicating an interest to open an audit or review in respect of Taxes, (b) requesting information relating to Tax matters, or (c) noticing a deficiency or proposed adjustment for any amount of Taxes proposed, asserted or addressed. None of the Company or the Company Subsidiaries has waived any statute of limitations in respect of Taxes or agreed to any extensions of the period of assessment or collection of any Taxes. Schedule 3.12.4 contains a list of all jurisdictions in which the Company or a Company Subsidiary is or may be required to file any Tax Return. No reasonable basis exists for a claim to be made by any Governmental Entity in any jurisdiction where the Company or a Company Subsidiary does not file Tax Returns that the Company or a Company Subsidiary is or may be subject to taxation by, or be required to file Tax Returns in, that jurisdiction.

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3.12.5 Access to Returns . Buyer has been provided with a copy of or access to all federal, state, local, provincial and foreign Tax returns filed by the Company or any Company Subsidiary since January 1, 2000. Buyer has been provided with a copy of or access to all assessments, extensions and waivers resulting from any audits of the Company or any Company Subsidiary by a Governmental Entity in respect of Taxes, and all such assessments and related penalties and interest have been paid in full. Schedule 3.12.5 sets forth the amounts of the net operating loss carryovers, tax credit carryovers, and the tax basis of assets as of December 30, 2007, with respect to the Company and each Company Subsidiary.

3.12.6 Compensation Deductions . None of the Company or the Company Subsidiaries is a party to any agreement, contract, arrangement or plan that has resulted or could result (determined regardless of whether or not the Company is or has been otherwise subject to the Code Sections 280G or 162(m)), separately or in the aggregate, in the payment of (a) any “excess parachute payment” within the meaning of Code Section 280G (or any corresponding provision of state, local, provincial or foreign law) or (b) any amount that will not be fully deductible as a result of Code Section 162 (m) (or any corresponding provisions of state, local, provincial or foreign Tax law).

3.12.7 Affiliated Group . Each of the Company and the Company Subsidiaries is not and has not been a member of an affiliated group filing a consolidated federal income tax return other than the group the common parent of which is the Company. Each of the Company and the Company Subsidiaries has no Liability for the Taxes of any Person (other than the Company and the Company Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, provincial or foreign law), as a transferee or successor, by contract, or otherwise. Neither the Company nor the Company Subsidiaries has filed or been included in a combined, consolidated or unitary return (or substantial equivalent thereof) of any Person.

3.12.8 No Tax Agreements . Each of the Company and the Company Subsidiaries is not and never has been a party to or otherwise bound by any tax sharing or similar agreement. No rulings or agreements in respect of any Tax are pending or have been issued by or entered into with any Government Entity with respect to the Company or any Company Subsidiary.

3.12.9 Certain Income Items and Deductions . Except as set forth on Schedule 3.12.9, neither the Company nor any Company Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any:

(a) change in method of accounting for a taxable period ending on or prior to the Closing Date, provided, however, that a change by the Company or any Company Subsidiary from the cash method of accounting for Tax reporting purposes to the accrual method of accounting for Tax reporting purposes upon or after consummation of the Merger shall not constitute a misrepresentation or inaccuracy in, or breach of, this Section 3.12.9(a);

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(b) “closing agreement” as described in Code Section 7121 (or any corresponding or similar provision of state, local, provincial or foreign income Tax law) executed on or prior to the Closing Date;

(c) intercompany transactions or any excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision of state, local, provincial or foreign income Tax law);

(d) installment sale or open transaction disposition made on or prior to the Closing Date; or

(e) prepaid amount received on or prior to the Closing Date.

3.12.10 Certain Stock Distributions . The Company has not distributed stock of another Person, nor has it had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Code Sections 355 or 361.

3.12.11 Code Section 382 Ownership Change . None of the Company or any Company Subsidiary has undergone a Code Section 382 ownership change since 2000.

3.12.12 Unclaimed Property . None of the Company or any Company Subsidiary has any assets that may constitute unclaimed property under Applicable Laws. Without limiting the generality of the foregoing, the Company and each Company Subsidiary has established and followed procedures to identify any unclaimed property and, to the extent required by Applicable Laws, remit such unclaimed property to the respective Government Entity. The records of each of the Company and each Company Subsidiary are adequate to permit Governmental Entities or outside auditors to confirm the foregoing representation and warranty.

3.12.13 Company Subsidiary Status. No Company Subsidiary has ever been treated as other than a disregarded entity for federal, state, local or foreign income Tax purposes when and if considered to be owned solely by one Person for such purposes or other than as a partnership for any of such Tax purposes when and if considered to be owned by more than one Person for any of such Tax purposes. No Company Subsidiary has ever been treated as, or elected to be treated as, a corporation for federal, state, local or foreign Tax purposes. At any time that any Company Subsidiary was considered to be owned by more than one Person for federal, state, local or foreign income Tax purposes, all allocations of income, gain, loss, deduction or credit made or to be made pursuant to the limited liability company operating agreement or similar document that applied or currently applies to such Company Subsidiary had or will have, as applicable, substantial economic effect as determined pursuant to Code Section 704(b).

3.12.14 Miscellaneous . Neither the Company nor any Company Subsidiary (i) has engaged in any reportable transaction within the meaning of Code Sections 6111 and 6112; (ii) is or has been a United States real property holding corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in Code Section 897(c)(1)(A)(ii); (iii) except as set forth on Schedule 3.12.14, is a party to any joint venture, partnership or other arrangement or contract which could be treated as a partnership for Federal income tax purposes;

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or (iv) has entered into any sale leaseback or any leveraged lease transaction. Each of the Company and Company Subsidiaries has disclosed on their federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Code Section 6662.

3.13 Employee Benefit Plans .

3.13.1 List of Plans . Schedule 3.13.1 contains a correct and complete list of all pension, profit sharing, retirement, deferred compensation, welfare, legal services, medical, dental or other employee benefit or health insurance plans, life insurance or other death benefit plans, disability, stock option, stock purchase, stock compensation, bonus, vacation pay, severance pay and other similar plans, programs or agreements, and every material written personnel policy, relating to any Persons employed by the Company or any Company Subsidiary or in which any Person employed by the Company or any Company Subsidiary is eligible to participate and which is currently maintained or contributed to by the Company, any Company Subsidiary or any of their respective ERISA Affiliates, or with respect to which the Company, any Company Subsidiary or any of their respective ERISA Affiliates have any Liability (collectively, the “Company Plans”). The Company has made available to Buyer complete copies, as of the date hereof, of all of the current Company Plans that have been reduced to writing, together with all documents establishing or constituting any related trust, annuity contract, insurance contract or other funding instrument, and summaries of those that have not been reduced to writing. The Company has provided to Buyer complete copies of current plan summaries, employee booklets, personnel manuals, service and trust agreements regarding health and welfare and retirement benefits, and other material documents relating to the terms of the Company Plans that are in the possession of the Company or any Company Subsidiary as of the date hereof. Each of the Company, Company Subsidiaries and their respective ERISA Affiliates does not have and has never had any “defined benefit plans” as defined in ERISA Section 3(35).

3.13.2 ERISA . Neither the Company, nor any Company Subsidiary nor any ERISA Affiliate of the Company or any Company Subsidiary has incurred any “withdrawal liability” calculated under ERISA Section 4211 and there has been no event or circumstance that would cause any of them to incur any such liability. Neither the Company, nor any Company Subsidiary nor any ERISA Affiliate of the Company or any Company Subsidiary has ever maintained a Company Plan providing health or life insurance benefits to former employees, other than as required pursuant to Code Section 4980B or to any state law conversion rights and no written or oral representations have been made to any employee, officer, or former employee promising or guaranteeing any coverage under any “employee welfare plan” (as defined in ERISA Section 3(1)) for any period of time beyond the end of a plan year. No employee benefit plan within the meaning of Section 3(3) of ERISA maintained by the Company, any Company Subsidiary or any of their respective ERISA Affiliates that was subject to ERISA has been terminated; no proceedings to terminate any such plan have been instituted within the meaning of Subtitle C of Title IV of ERISA; and no reportable event within the meaning of Section 4043 of said Subtitle C of Title IV of ERISA with respect to which the requirement to file a notice with the Pension Benefit Guaranty Corporation has not been waived has occurred with respect to any such Company Plan, and no liability to the Pension Benefit Guaranty Corporation has been incurred by the Company, any Company Subsidiary or any of their respective ERISA Affiliates. With respect to all the Company Plans, the Company, and to the Company’s Knowledge, every

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Company Subsidiary and every ERISA Affiliate of any of the Company or the Company Subsidiaries is in material compliance with all material requirements prescribed by all Applicable Laws (including any requirement that a plan be invested primarily in employer securities within the meaning of the Code and ERISA), and has in all material respects performed all obligations required to be performed by it, and has been operated and administered in a manner that is in material compliance with all Applicable Laws and its terms and conditions. Neither the Company, nor, to the Company’s Knowledge , any Company Subsidiary nor any ERISA Affiliate of the Company or any Company Subsidiary, nor any of their directors, officers, employees or agents, nor any trustee or administrator of any trust created under the Company Plans, has engaged in or been a party to any “prohibited transaction” as defined in Code Section 4975, or has breached any fiduciary obligation, which could subject the Company, any Company Subsidiary or any of their respective ERISA Affiliates, directors or employees or the Company Plans or the trusts relating thereto or any party dealing with any of the Company Plans or trusts to any tax or penalty on “prohibited transactions” imposed by Code Section 4975 or any other Liability, and the Transactions will not cause or result in any such “prohibited transactions” or breach of fiduciary responsibility. Neither the Company Plans nor the trusts created thereunder have incurred any “accumulated funding deficiency,” as such term is defined in Code Section 412 and regulations issued thereunder, whether or not waived.

3.13.3 Plan Determinations . Each Company Plan intended to qualify under Code Section 401(a) has been determined by the Internal Revenue Service (“IRS”) to so qualify and is so qualified, and the trusts created thereunder have been determined to be exempt from Tax under Code Section 501(a) and are so exempt; copies of all determination letters that have been received by the Company have been made available to Buyer, and neither the Company, or to the Company’s Knowledge, any Company Subsidiary has taken any action, or received any notification of any action taken by any other Person since the date of such determination letters that might reasonably be expected to cause the loss of such qualification or exemption. With respect to each Company Plan that is a qualified profit sharing plan, all employer contributions accrued for plan years ending prior to the Closing under the Company Plan terms and Applicable Laws have been timely made.

3.13.4 Funding . Except as set forth on Schedule 3.13.4:

(a) all contributions, premiums or other payments due or required to be made to the Company Plans as of the date hereof have been made as of the date hereof or are properly reflected on the Company Balance Sheet;

(b) there are no actions, liens, suits or claims (other than routine claims for benefits) pending or, to the Company’s Knowledge, threatened with respect to any Company Plan;

(c) no event has occurred, and there exists no condition or set of circumstances, that presents a material risk of a partial termination (within the meaning of Code Section 411(d)(3)) of any Company Plan;

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(d) each Company Plan that is a “group health plan” (as defined in Section 607(1) of ERISA) has been operated at all times in material compliance with the provisions of COBRA and any applicable, similar state law;

(e) with respect to any Company Plan that is qualified under Code Section 401(k) (each and collectively, “401(k) Plan(s)”), individually and in the aggregate, no event has occurred, and there exists no condition or set of circumstances in connection with which the Company could reasonably be expected to be subject to any Liability (except Liability for funding obligations payable in the ordinary course) that is reasonably likely to have a Company Material Adverse Effect under ERISA, the Code or any other Applicable Laws; and

(f) If any Company Plan is terminated immediately prior to or after Closing, neither the Company, any Company Subsidiary nor any of their respective ERISA Affiliates would incur any Liability for any unfunded obligation under any such Company Plan.

3.13.5 Certain Other Matters . Except as reserved for on the Company Balance Sheet or the Final Closing Balance Sheet, neither the Company nor any Company Subsidiary has any material Liability and none of the Company or any Company Subsidiary will have material Liability or would reasonably be expected to have material Liability, with regard to any Company Plan, including any Liability as a result of any failure of non-discrimination testing on a Company Plan or any failure to amend a Company Plan pursuant to Applicable Law, including the legislation commonly known as “GUST” or the legislation commonly known as “EGTRRA.” All employee contributions, including elective deferrals, to any Company Plan have been segregated from the general assets of the Company and Company Subsidiaries, and deposited into the trust(s) established pursuant to the Company Plan in a timely manner in accordance with Applicable Laws, including the “plan asset” regulations of the Department of Labor.

3.13.6 Welfare Plans . With respect to any Company Plan that is an employee welfare benefit plan (within the meaning of Section 3(1) of ERISA) (a “Welfare Plan”), (a) each Welfare Plan for which contributions are claimed by the Company or any Company Subsidiary as deductions under any provision of the Code is in compliance with all applicable requirements entitling the Company or Company Subsidiary to such deduction, (b) with respect to any welfare benefit fund (within the meaning of Code Section 419) related to a Welfare Plan, there is no disqualified benefit (within the meaning of Code Section 4976(b)) that would result in the imposition of a Tax under Code Section 4976(a), (c) any Company Plan that is a group health plan (within the meaning of Code Section 4980B(g)(2)) complies, in material respects, with all of the applicable requirements of COBRA, the Family Medical Leave Act of 1993, the Health Insurance and Portability and Accountability Act of 1996, the Women’s Health and Cancer Rights Act of 1996, the Newborns’ and Mothers’ Health Protection Act of 1996, and any similar provisions of state law or foreign law applicable to employees of the Company, any Company Subsidiary or any ERISA Affiliate of the Company or any Company Subsidiary. None of the Company Plans promises or provides retiree medical or other retiree welfare benefits to any Person except for severance benefits or as required by Applicable Laws, and neither the Company, any Company Subsidiary nor any ERISA Affiliate of any of the Company or Company Subsidiaries has represented, promised or contracted (whether in oral or written form) to provide such retiree benefits to any employee, former employee, director, consultant or other

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Person, except for severance benefits or to the extent required by Applicable Laws. No Company Plan or employment agreement provides health benefits that are not insured through an insurance contract except for benefits under any cafeteria plan or flexible spending arrangement. Except as set forth on Schedule 3.13.6, each Company Plan is amendable and terminable unilaterally by the Company or any Company Subsidiary, as the case may be, at any time without material Liability to the Company or any Company Subsidiary as a result thereof except for accelerated vesting of benefits and no Company Plan, plan documentation or agreement, summary plan description or other written communication distributed generally to employees by its terms prohibits the Company or any Company Subsidiary, as the case may be, from amending or terminating any such Company Plan.

3.13.7 Payments Relating to the Transactions . Except as required to comply with Applicable Law or except as set forth on Schedule 3.13.7, no Company Plan provides for, as a result of the Transactions (whether alone or in connection with other events), any payment of any material amount of money or other property to or the acceleration of or provision of any other rights or benefits to any current or former officer, employee, independent contractor or director of the Company or any of the Company Subsidiaries, whether or not such payment, right or benefit, or acceleration thereof, would constitute a parachute payment within the meaning of Code Section 280G.

3.13.8 Section 409A . To the extent that any Company Plan constitutes a “non-qualified deferred compensation plan” with the meaning of Code Section 409A, such Company Plan has been operated in good faith compliance with Code Section 409A.

3.14 Employment-Related Matters .

3.14.1 Labor Relations .

(a) Neither the Company nor any Company Subsidiary is a party to any collective bargaining agreement or other contract or agreement with any labor organization or other representative of any of the employees of the Company.

(b) There is no labor strike, dispute, slowdown, work stoppage or lockout that is pending or, to the Company’s Knowledge, threatened against or otherwise affecting the Company or any Company Subsidiary, and neither the Company nor any Company Subsidiary has experienced the same.

(c) Except as has occurred in the ordinary course of business of the Company or any Company Subsidiary without any resulting material Liability of the Company or any Company Subsidiary, neither the Company nor any Company Subsidiary has closed any plant or facility, effectuated any mass layoffs of employees or implemented any early retirement or group separation program at any time, nor has the Company or any Company Subsidiary planned or announced any such action or program for the future with respect to which the Company or any Company Subsidiary has any material Liability.

(d) All salaries, wages, vacation pay, bonuses, commissions and other compensation due from any of the Company or Company Subsidiaries to their respective

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employees before the date hereof have been paid or accrued as of the date hereof on the books and records of the Company or a Company Subsidiary.

3.14.2 Employee List . Set forth on Schedule 3.14.2 for each of the Company and each Company Subsidiary is a list containing, as of a date not more than three days prior to the date hereof, the name of each of their respective employees, whether full-time or part time, and each such employee’s position and starting employment date (the “Employee List”). The Employee List is correct and complete as of the date of the Employee List. No third party has asserted in writing any claim or, to the Company’s Knowledge, has any reasonable basis to assert any valid claim, against the Company that either the continued employment by, or association with, the Company or any of the Company Subsidiaries of any of the current officers or employees of, or consultants to, the Company or any of the Company Subsidiaries contravenes any agreements or Applicable Laws regarding unfair competition, trade secrets or proprietary information. The Company has provided to Buyer a list setting forth the salary and other compensation, as of a date not more than three days prior to the date hereof, of each employee listed on the Employee List.

3.14.3 Certain Other Labor Matters .

(a) Each of the Company and each Company Subsidiary is and has been in compliance in all respects with all laws, regulations or rules regarding termination of employees, including the WARN Act (and any similar foreign, provincial, state or local statute or regulation), the Fair Labor Standards Act, as well as any termination notice or severance mandated by statute or civil or common law and, except as set forth on Schedule 3.14.3(a), neither the Company nor any Company Subsidiary is subject to any pending claim for wrongful dismissal, constructive dismissal or any other claim, actual or, to the Company’s Knowledge or the Principal Shareholders’ Knowledge, threatened, or any litigation, actual or, to the Company’s Knowledge threatened, relating to employment or termination of employment of any employee or consultant.

(b) Each of the Company and each Company Subsidiary is in compliance in all respects with all Applicable Laws relating to employment and employment practices, the classification of employees, wages, hours, collective bargaining, unlawful discrimination, civil rights, safety and health, workers’ compensation and terms and conditions of employment, including the Service Contract Act of 1965, as amended (and any similar foreign, provincial, state or local statute or regulations); there are no material charges with respect to or relating to any of the Company or any Company Subsidiary pending or, to the Company’s Knowledge, threatened, before the Equal Employment Opportunity Commission or any other Governmental Entity responsible for the prevention of unlawful employment practices, and to the Company’s Knowledge, there is no basis for any such charges; and neither the Company nor any of the Company Subsidiaries has received any notice from any Governmental Entity responsible for the enforcement of labor or employment laws of an intention to conduct an investigation of any of the Company or Company Subsidiaries and no such investigation is in progress.

(c) Without limiting the generality of the foregoing, there are no claims, complaints, suits, civil actions, administrative charges, arbitration or other proceedings, pending, or to the Company’s Knowledge, threatened, against any of the Company, any Company

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Subsidiary or any employee of any of them relating to discrimination, harassment or retaliation based on sex under Title VII of the Civil Rights Act of 1964 or any state equivalent, and to the Company’s Knowledge, there exist no circumstances or facts that could reasonably be expected to give rise to or result in any such claim, complaint, suit, action, charge, arbitration or other proceeding.

(d) To the Company’s Knowledge, (i) no claims for unpaid wages or occupational injury claims of any employee of the Company or any Company Subsidiary have not been reported to any applicable Governmental Entity, or have been knowingly concealed or misrepresented by the Company or any Company Subsidiary, and (ii) there is no work environment or environmental condition in the workplace of the Company or Company Subsidiaries that has caused a workplace injury and that has not yet been remediated.

3.15 Environmental .

3.15.1 Environmental Laws . Except for matters that, individually or in the aggregate, would not have a Company Material Adverse Effect, (a) each of the Company and the Company Subsidiaries is in compliance with all applicable Environmental Laws in effect on the date hereof; (b) neither the Company nor any Company Subsidiary has received any written communication that alleges that the Company or any Company Subsidiary is not in compliance in all material respects with all applicable Environmental Laws in effect on the date hereof; (c) to the Company’s Knowledge, there are no circumstances that may prevent or interfere with future compliance by the Company and Company Subsidiaries with all Environmental Laws; (d) all Permits and other Governmental Entity authorizations currently held by the Company or any Company Subsidiary pursuant to the Environmental Laws are in full force and effect, the Company and the Company Subsidiaries are in compliance with all of the terms of such Permits and authorizations, and no other Permits or authorizations pursuant to the Environmental Laws are required by the Company or any Company Subsidiary for the conduct of their respective businesses on the date hereof; and (e) the management, handling, storage, transportation, treatment, and disposal by each of the Company and each Company Subsidiary of all Materials of Environmental Concern has been in compliance with all applicable Environmental Laws.

3.15.2 Environmental Claims . There is no Environmental Claim pending or, to the Company’s Knowledge, threatened against or involving the Company or any Company Subsidiary or against any Person whose Liability for any Environmental Claim the Company or any Company Subsidiary has or may have retained or assumed either contractually or by operation of law.

3.15.3 No Basis for Claims . Except for matters that, individually or in the aggregate, would not have a Company Material Adverse Effect, there are no past or current actions or activities by the Company or any Company Subsidiary, or, to the Company’s Knowledge, any circumstances, conditions, events or incidents, including the storage, treatment, release, emission, discharge, disposal or arrangement for disposal of any Material of Environmental Concern, whether or not by the Company or any Company Subsidiary or any other Person, that could reasonably form the basis of any Environmental Claim against the Company or any Company Subsidiary or against any Person whose Liability for any Environmental Claim the Company or any Company Subsidiary may have retained or assumed

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either contractually or by operation of law, including the storage, treatment, release, emission, discharge, disposal or arrangement for disposal of any Material of Environmental Concern or any other contamination or other hazardous condition, whether or not caused by the Company or any Company Subsidiary related to the premises at any time occupied by the Company or any Company Subsidiary. Without limiting the generality of the foregoing, neither the Company nor any Company Subsidiary has received any notices, demands, requests for information, or investigations pertaining to its compliance with or Liability under Environmental Law, nor pertaining to its storage, treatment, release, emission, discharge, disposal or arrangement for disposal or arrangement for disposal of any Materials of Environmental Concern, nor, to the Company’s Knowledge, are any such notices, demands, requests for information or investigations threatened.

3.15.4 Disclosure of Information . The Company has made, and during the Pre-Closing Period will continue to make, available to Buyer all environmental investigations, studies, audits, tests, reviews and other analyses conducted by or on behalf of the Company or any Company Subsidiary in relation to Environmental Laws or Materials of Environmental Concern pertaining to the Company, any Company Subsidiary or any property or facility now or previously owned, leased or operated by the Company or any Company Subsidiary that are in the possession, custody, or control of the Company or any Company Subsidiary.

3.15.5 Encumbrances . No Encumbrance relating to or in connection with any Environmental Claim, Environmental Law, or Materials of Environmental concern has been filed or has been attached to any of the property or assets owned, leased or operated by the Company or any Company Subsidiary.

3.15.6 Transportation of Materials of Environmental Concern . Since December 31, 2000, none of the Company or Company Subsidiaries has used, handled, generated, produced, manufactured, treated, stored, disposed of, recycled or transported any Materials of Environmental Concern, whether on behalf of the Company, any Company Subsidiary or any other Person, in violation of any Environmental Laws, and to the Company’s Knowledge, there has been no Release or threatened Release of any Materials of Environmental Concern beneath or from any real property owned, leased or operated or formerly owned, leased or operated by the Company or any Company Subsidiary.

3.16 No Broker’s or Finder’s Fees . Except as set forth on Schedule 3.16, neither the Company nor any Company Subsidiary has paid or become obligated to pay any fee or commission to any broker, finder, financial advisor, intermediary or other similar Person in connection with the Transactions and giving effect to the consummation of the Closing will not cause the Company or any Company Subsidiary to be so obligated.

3.17 Assets Other Than Real Property .

3.17.1 Title . The Company and the Company Subsidiaries have good and marketable title to all of the tangible assets shown on the Company Balance Sheet, in each case, free and clear of any Encumbrance, except for (a) assets disposed of since the Balance Sheet Date in the ordinary course of business and in a manner consistent with past practices, (b) Liabilities and Encumbrances reflected in the Company Balance Sheet or otherwise in the

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Company Financial Statements, (c) Permitted Encumbrances, and (d) Liabilities and Encumbrances set forth on Schedule 3.17.1.

3.17.2 Closing Date Assets .

(a) As of the Closing Date, the Company and the Company Subsidiaries will have good and marketable title to all of their respective assets, including those assets shown on the Final Closing Balance Sheet, in each case free and clear of any Encumbrances other than Permitted Encumbrances.

(b) Schedule 3.17.2(b) lists all tangible personal property (other than Inventory) that is owned or leased by the Company or any Company Subsidiary and the location thereof as of December 31, 2007. All of such personal property is in good operating condition, subject to ordinary wear and tear.

(c) Each of the Company’s and each Company Subsidiary’s properties, assets and rights are all the properties, assets and rights that are used in or that are being held for use or are otherwise necessary in the operation, as currently conducted by the Company and each Company Subsidiary, of their respective businesses.

(d) Schedule 3.