AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

You are currently viewing:

This Agreement and Plan of Merger involves

Sciele Pharma, Inc | Shionogi & Co, Ltd | TALL BRIDGE, INC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Delaware Date: 9/3/2008
Industry: Biotechnology and Drugs Law Firm: Skadden Arps;Davis Polk;Paul Hastings Sector: Healthcare

AGREEMENT AND PLAN OF MERGER, Parties: sciele pharma inc , shionogi & co ltd , tall bridge inc

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

DATED AS OF SEPTEMBER 1, 2008

AMONG

SHIONOGI & CO., LTD.,

TALL BRIDGE, INC.

AND

SCIELE PHARMA, INC.

TABLE OF CONTENTS


				Page
Article 1		THE OFFER		1
	Section 1.1		The Offer	1
	Section 1.2		Company Actions	4
	Section 1.3		Directors	5
	Section 1.4		Option to Acquire Additional Shares	6
Article 2		THE MERGER		8
	Section 2.1		The Merger	8
	Section 2.2		Merger Closing	8
	Section 2.3		Effect of Merger; Organizational Documents; Directors and Officers	8
	Section 2.4		Conversion of Merger Sub Capital Stock	9
	Section 2.5		Conversion of Shares	9
	Section 2.6		Appraisal Rights	9
	Section 2.7		Exchange of Certificates	10
	Section 2.8		Equity-Based Compensation Plans and Awards	11
	Section 2.9		Convertible Notes	12
	Section 2.10		Further Action	12
Article 3		REPRESENTATIONS AND WARRANTIES OF THE COMPANY		12
	Section 3.1		Organization	12
	Section 3.2		Capitalization	13
	Section 3.3		Authorization; No Conflict	14
	Section 3.4		Subsidiaries	16
	Section 3.5		SEC Reports and Financial Statements	16
	Section 3.6		Absence of Material Adverse Changes, etc.	18
	Section 3.7		Litigation	18
	Section 3.8		Disclosure Documents	18
	Section 3.9		Broker's or Finder's Fees	19
	Section 3.10		Employee Plans	19
	Section 3.11		Opinion of Financial Advisor	21
	Section 3.12		Taxes	21
	Section 3.13		Environmental Matters	22
	Section 3.14		Compliance With Laws	23
	Section 3.15		Intellectual Property	24


				Page
	Section 3.16		Employment Matters	26
	Section 3.17		Insurance	26
	Section 3.18		Material Contracts	26
	Section 3.19		Real Property	27
	Section 3.20		Antitakeover Statute	28
Article 4		REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB		28
	Section 4.1		Organization	28
	Section 4.2		Merger Sub	28
	Section 4.3		Authorization; No Conflict	28
	Section 4.4		Information Supplied	29
	Section 4.5		Availability of Funds	29
	Section 4.6		Broker's or Finder's Fees	29
	Section 4.7		Ownership of Company Common Stock	30
	Section 4.8		Absence of Litigation	30
	Section 4.9		Other Agreements or Understandings	30
	Section 4.10		No Additional Representations	30
Article 5		CONDUCT OF BUSINESS		30
	Section 5.1		Conduct of Business by the Company Pending the Acceptance Time	30
	Section 5.2		Conduct of Business by Parent and Merger Sub Pending the Merger	33
Article 6		ADDITIONAL AGREEMENTS		34
	Section 6.1		Preparation of Proxy Statement; Stockholders Meetings	34
	Section 6.2		Employee Benefits Matters	35
	Section 6.3		Antitrust Filings	36
	Section 6.4		Public Statements	37
	Section 6.5		Standard of Efforts	37
	Section 6.6		Notification of Certain Matters	38
	Section 6.7		Access to Information; Confidentiality	38
	Section 6.8		No Solicitation	39
	Section 6.9		Indemnification and Insurance	40
	Section 6.10		Section 16 Matters	42
	Section 6.11		Rule 14d-10(d)	42
	Section 6.12		Convertible Notes	42
	Section 6.13		Credit Facility	42


				Page
	Section 6.14		State Takeover Laws	43
	Section 6.15		Financing	43
	Section 6.16		Stock Exchange De-listing	43
Article 7		CONDITIONS		43
	Section 7.1		Conditions to Each Party's Obligation to Effect the Merger	43
	Section 7.2		Failure of Conditions	44
Article 8		TERMINATION, AMENDMENT AND WAIVER		44
	Section 8.1		Termination	44
	Section 8.2		Effect of Termination	45
	Section 8.3		Fees and Expenses	45
	Section 8.4		Amendment	46
	Section 8.5		Waiver	46
	Section 8.6		Procedure for Termination, Amendment, Extension or Waiver	47
Article 9		GENERAL PROVISIONS		47
	Section 9.1		Notices	47
	Section 9.2		Nonsurvival of Representations, Warranties and Agreements	48
	Section 9.3		Interpretations	48
	Section 9.4		Governing Law; Jurisdiction; Waiver of Jury Trial	48
	Section 9.5		Counterparts; Facsimile Transmission of Signatures	48
	Section 9.6		Assignment; No Third Party Beneficiaries	49
	Section 9.7		Severability	49
	Section 9.8		Entire Agreement	49
	Section 9.9		Enforcement	49
	Section 9.10		Disclosure Letter	49

iii

Table of Defined Terms


		Section
Acceptance Time		Section 1.3(a)
Affiliate		Exhibit A
Agreement		Opening Paragraph
Antitrust Laws		Exhibit A
Appraisal Shares		Section 2.6
Bankruptcy and Equity Exception		Section 3.3(a)
Board Recommendation		Section 3.3(d)
Book-Entry Shares		Section 2.7(b)
Business Days		Exhibit A
Certificate		Section 2.7(b)
Certificate of Merger		Section 2.2(b)
Closing		Section 2.2(a)
Closing Date		Section 2.2(a)
Code		Exhibit A
Company		Opening Paragraph
Company Adverse Recommendation Change		Section 6.8(d)
Company Board		Section 3.3(d)
Company Charter Documents		Section 3.1(b)
Company Common Stock		Introduction
Company Disclosure Document		Section 3.8(a)
Company Disclosure Letter		Article 3
Company Employees		Section 6.2(a)
Company Financial Advisor		Section 3.9
Company Financial Statements		Section 3.5(b)
Company Intellectual Property		Section 3.15(a)
Company Leases		Section 3.19(b)
Company Material Adverse Effect		Exhibit A
Company Material Contract		Section 3.18(a)
Company Preferred Stock		Section 3.2(a)
Company Proxy Statement		Section 3.8(a)
Company Registered Intellectual Property		Section 3.15(b)
Company Retirement Plans		Section 6.2(e)
Company SEC Reports		Section 3.5(a)
Company Securities		Section 3.2(c)
Company Severance Practices		Section 6.2(c)
Company Stockholders Meeting		Section 6.1(b)
Company Subsidiaries		Section 3.4(a)
Company Subsidiary		Section 3.4(a)
Company Voting Proposal		Section 6.1(b)
Confidentiality Agreement		Section 6.7(b)
Constituent Corporations		Section 2.1
Continuing Directors		Section 1.3(a)
Contract		Exhibit A
Convertible Notes		Exhibit A
Credit Facility		Section 6.13
D&O Insurance		Section 6.9(c)
DGCL		Introduction
DOJ		Section 6.3(a)
Effective Time		Section 2.2(b)
Employee Benefit Plan		Section 3.10(a)
Environmental Laws		Exhibit A


		Section
ERISA		Exhibit A
ERISA Affiliate		Section 3.10(f)
Exchange Act		Exhibit A
Exchange Agent		Section 2.7(a)
Exchange Fund		Section 2.7(a)
FCPA		Section 3.5(f)
FDA		Exhibit A
FDA Act		Section 3.14(b)
FTC		Section 6.3(a)
GAAP		Section 3.5(b)
Governmental Authority		Section 3.3(c)
Hazardous Substances		Exhibit A
HIPAA		Section 3.14(d)
HSR Act		Section 3.3(c)
Indemnified Party		Section 6.9(a)
Indemnifying Party		Section 6.9(b)
Indenture		Exhibit A
Information Statement		Section 3.3(c)
In-licensed Intellectual Property		Section 3.15(c)
Intellectual Property		Section 3.15(a)
International Plan		Exhibit A
IRS		Section 3.12(b)
IT Assets		Section 3.15(h)
Judgment		Section 3.3(b)
Key Employee		Exhibit A
Knowledge		Exhibit A
Law		Section 3.3(b)
Lien		Exhibit A
Make-Whole Fundamental Change		Exhibit A
Maximum Amount		Section 6.9(c)
Merger		Introduction
Merger Consideration		Section 2.5(a)
Merger Sub		Opening Paragraph
Minimum Tender Condition		Annex A
New Plans		Section 6.2(b)
Offer		Introduction
Offer Conditions		Section 1.1(a)
Offer Documents		Section 1.1(f)
Offer Price		Introduction
Option Consideration		Exhibit A
Option		Exhibit A
Ordinary Course of Business		Exhibit A
Parent		Opening Paragraph
Parent Material Adverse Effect		Exhibit A
Parent Retirement Plan		Section 6.2(e)
Permits		Section 3.1(a)
Person		Exhibit A
Pre-Closing Period		Section 5.1
Proxy Statement		Section 3.3(c)
Qualifying SEC Report		Exhibit A


		Section
Representatives		Section 6.8(a)
Required Company Stockholder Vote		Section 3.3(a)
Restricted Share Unit		Exhibit A
Restricted Stock		Exhibit A
Sarbanes-Oxley Act		Section 3.5(d)
Schedule 14D-9		Section 1.2(b)
SEC		Exhibit A
Section 262		Section 2.6
Securities Act		Section 3.5(a)
Share		Introduction
Shares		Introduction
Stark Law		Section 3.14(e)
Stock Plans		Exhibit A
Subsequent Offering Period		Section 1.1(d)
Subsidiary		Exhibit A
Subsidiary Documents		Section 3.1(b)
Superior Proposal		Exhibit A
Surviving Corporation		Section 2.1
Takeover Proposal		Exhibit A
Tax or Taxes		Exhibit A
Tax Authority or Taxing Authority		Exhibit A
Tax Returns		Exhibit A
Tax Sharing Agreement		Exhibit A
Tender and Voting Agreement		Introduction
Termination Fee		Section 8.3(b)
Top-Up Option		Section 1.4(a)
Top-Up Option Shares		Section 1.4(a)
Transactions		Section 1.2(a)
Walk Away Date		Section 8.1(b)(i)

AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger (this " Agreement "), dated as of September 1, 2008, among Shionogi & Co., Ltd., a company formed under the laws of Japan (" Parent "), Tall Bridge, Inc., a Delaware corporation and indirect wholly-owned subsidiary of Parent (" Merger Sub "), and Sciele Pharma, Inc., a Delaware corporation (the " Company "). Capitalized terms not otherwise defined herein shall have the meaning set forth in Exhibit A attached hereto.

Recitals

A. The respective Boards of Directors of Parent, Merger Sub and the Company have approved and declared advisable this Agreement and the Transactions, including the Offer and the Merger, on the terms and subject to the conditions set forth in this Agreement.

B. In furtherance of such acquisition, Parent has agreed to cause Merger Sub to commence a cash tender offer (as it may be amended from time to time as permitted under this Agreement, the " Offer ") to purchase all the shares of common stock, par value $0.001 per share, of the Company (the " Company Common Stock ") issued and outstanding (each share of Company Common Stock, a " Share " and, collectively, the " Shares "), at a price per Share of $31.00 (such amount, or any higher amount per Share paid pursuant to the Offer in accordance with this Agreement, the " Offer Price "), on the terms and subject to the conditions set forth in this Agreement.

C. Following consummation of the Offer, subject to the terms and conditions of this Agreement, Parent shall cause Merger Sub to merge with and into the Company (the " Merger "), with the Company surviving the Merger as an indirect wholly owned subsidiary of Parent, in accordance with the General Corporation Law of the State of Delaware (the " DGCL "). Each Share that is not tendered and accepted pursuant to the Offer, other than certain Shares as provided in Section 2.5(b) and Section 2.6, will thereupon be cancelled and converted in the Merger into the right to receive cash in an amount equal to the Offer Price on the terms and subject to the conditions set forth herein.

D. Concurrently with the execution and delivery of this Agreement, and as a condition and inducement to Parent's and Merger Sub's willingness to enter into this Agreement, (i) certain of the Company's directors and executive officers are entering into a Tender and Voting Agreement with Parent and Merger Sub substantially in the form attached as Exhibit B (the " Tender and Voting Agreement "), and (ii) certain of the Company's executive officers are entering into amended and restated employment agreements with the Company.

E. In consideration of the foregoing and of the representations, warranties, covenants and agreements set forth in this Agreement, the parties hereto agree as follows:

ARTICLE 1
THE OFFER

Section 1.1 The Offer.

(a) Subject to the terms and conditions set forth in this Agreement, as promptly as reasonably practicable after the date of this Agreement, but in no event later than ten (10) calendar days after the date of this Agreement, Merger Sub shall (and Parent shall cause Merger Sub to) commence the Offer, within the meaning of the applicable rules and regulations of the SEC, to purchase any and all outstanding Shares at a price equal to the Offer Price. The obligations of Merger Sub to, and of Parent to cause Merger Sub to, purchase, accept for payment, and pay for, Shares tendered pursuant to the Offer are subject only to the satisfaction or waiver of each of the conditions set forth in Annex A (the " Offer Conditions ").

(b) The initial expiration date of the Offer shall be the twentieth (20 ^th ) Business Day following the commencement of the Offer (determined using Exchange Act Rules 14d-1(g)(3) and 14d-2). Notwithstanding the foregoing, if, on the initial expiration date or any subsequent date as of which the Offer is scheduled to expire, all of the Offer Conditions have not been satisfied or waived, then Merger

Sub shall, subject to the rights of the parties under Article 8, extend (and re-extend) the Offer and its expiration date beyond the initial expiration date or such other date for one or more periods, until the earlier to occur of (i) a date as of which all of the Offer Conditions, including the Minimum Tender Condition, are satisfied or waived and (ii) the Walk Away Date; provided that any such extension shall be in increments determined by Merger Sub of not more than ten (10) Business Days. Notwithstanding the foregoing, Merger Sub shall, and Parent shall cause Merger Sub to, extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer or any period required by any other Law. The Offer may not be terminated prior to its expiration date (as such expiration date may be extended and re-extended in accordance with this Agreement), unless this Agreement is validly terminated in accordance with Article 8.

(c) Parent shall provide or cause to be provided to Merger Sub on a timely basis the funds necessary to purchase any Shares that Merger Sub becomes obligated to purchase pursuant to the Offer. Merger Sub shall (and Parent shall cause Merger Sub to) accept for payment and pay for all Shares validly tendered and not withdrawn pursuant to the Offer as promptly as practicable following the later of: (i) the earliest date as of which Merger Sub is permitted under applicable Law to accept for payment Shares tendered pursuant to the Offer and (ii) the earliest date as of which each of the Offer Conditions shall have been satisfied or waived.

(d) Merger Sub may, in its discretion, elect to provide for a subsequent offering period (and one or more extensions thereof) in accordance with Rule 14d-11 under the Exchange Act (each a " Subsequent Offering Period ") following the Acceptance Time if at the commencement of any Subsequent Offering Period (or extension thereof) the number of Shares owned by Parent, Merger Sub and their respective Subsidiaries (including any Shares beneficially owned by any of the foregoing) represent less than 90% of the then outstanding number of Shares. If immediately following the Acceptance Time, Parent, Merger Sub and their respective Subsidiaries own more than 80% but less than 90% of the Shares outstanding at that time (which shall include (i) shares beneficially owned by Parent, Merger Sub and their respective Subsidiaries, and (ii) shares tendered in the Offer and not withdrawn), to the extent requested by the Company, Merger Sub shall provide for a Subsequent Offering Period of at least ten (10) Business Days; provided , however , that if the number of Shares issuable upon the exercise of the Top-Up Option would, after giving effect to such exercise and when added to the number of Shares so owned by the Parent, Merger Sub and their respective subsidiaries, represent not less than 90% of the then outstanding number of Shares, at the Parent's election, the Merger Sub shall not be required to provide for such Subsequent Offering Period. Subject to the terms and conditions set forth in this Agreement and the Offer, Parent shall cause Merger Sub to, and Merger Sub shall, accept for payment and pay for all Shares validly tendered and not withdrawn during such Subsequent Offering Period as promptly as practicable after any such Shares are tendered during any Subsequent Offering Period and in any event in compliance with Rule 14d-11(c) promulgated under the Exchange Act.

(e) Parent and Merger Sub expressly reserve the right to waive any condition to the Offer, to increase the Offer Price and/or to modify the other terms of the Offer, except that, without the consent of the Company, Parent and Merger Sub shall not do any of the following:

(i)

reduce the number of Shares subject to the Offer;

(ii)

reduce the Offer Price;

(iii)

change or waive the Minimum Tender Condition;

(iv)

except as provided in Section 1.1(b) and Section 1.1(d), extend or otherwise change the expiration date of the Offer, except (A) as required by applicable Law (including for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof) or (B) in connection with an increase of at least $0.25 per share in the

consideration to be paid pursuant to the Offer so as to comply with applicable rules and regulations of the SEC;

(v)

change the form of consideration payable in the Offer;

(vi)

amend, modify or supplement any of the Offer Conditions or the terms of the Offer in any manner adverse to holders of Shares or that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or prevent, materially delay or impair the ability of Parent or Merger Sub to consummate the Offer, the Merger or the other Transactions; or

(vii)

impose any condition to the Offer other than the Offer Conditions.

(f) On the date of commencement of the Offer, Parent and Merger Sub shall file with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer, which Tender Offer Statement shall (i) contain an offer to purchase and a related letter of transmittal and summary advertisement (such Schedule TO and the documents included therein pursuant to which the Offer will be made, together with any supplements or amendments thereto, being referred to as the " Offer Documents ") and (ii) be in form reasonably satisfactory to the Company. The Company shall promptly upon request of Parent provide Parent with all information concerning the Company that is required to be included in the Offer Documents. Parent and Merger Sub shall cause the Offer Documents to comply in all material respects with the requirements of applicable securities Laws, on the date first filed with the SEC and on the date first published, sent or given to the holders of Shares, and not to 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 therein, in light of the circumstances under which they were made, not misleading, except that no covenant is made by Parent or Merger Sub with respect to information supplied by the Company in writing specifically for inclusion or incorporation by reference in the Offer Documents. Each of Parent, Merger Sub and the Company shall promptly correct any information provided by it for use in the Offer Documents if and to the extent necessary such that the Offer Documents do not contain an 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 therein, in light of the circumstances under which they are made, not misleading. Each of Parent and Merger Sub shall take all steps necessary to amend or supplement the Offer Documents and to cause the Offer Documents as so amended or supplemented to be filed with the SEC and disseminated to the holders of Shares, in each case as and to the extent required by applicable federal securities Laws. The Company and its counsel shall be afforded a reasonable opportunity to review and comment upon the Offer Documents before they are filed with the SEC and disseminated to holders of Shares. Parent and Merger Sub shall provide to the Company and its counsel copies of any written comments or telephonic notification of any oral comments Parent, Merger Sub or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments, shall consult with the Company and its counsel prior to responding to any such comments and shall provide the Company with copies of all written responses and telephonic notification of any oral responses thereto of Parent or Merger Sub or their counsel.

(g) Unless this Agreement is terminated pursuant to Section 8.1, neither Parent nor Merger Sub shall terminate or withdraw the Offer prior to any scheduled expiration date without the prior written consent of the Company, except that in the event this Agreement is terminated pursuant to Section 8.1, Merger Sub shall promptly (and in any event within one (1) Business Day) following such termination irrevocably and unconditionally terminate the Offer and shall not acquire any Shares pursuant thereto. If the Offer is terminated in accordance with this Agreement prior to the purchase of Shares in the Offer, Merger Sub shall promptly return, or cause any depositary acting on behalf of Merger Sub to return, all tendered Shares to the tendering stockholders.

(h) The Offer Price shall be adjusted to reflect fully the effect of any reclassification, stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Company Common Stock), reorganization, recapitalization or other like change with respect to Company Common Stock occurring (or for which a record date is established) after the date of this Agreement and prior to the payment by Merger Sub for the Shares validly tendered and not withdrawn in connection with the Offer.

Section 1.2 Company Actions.

(a) The Company hereby approves of and consents to the Offer, the Merger and the other transactions contemplated by this Agreement (collectively, the " Transactions "). The Company hereby consents to the inclusion of a statement in the Offer Documents that to the Knowledge of the Company all directors and executive officers of the Company intend to tender all of their respective Shares, if they hold any, in the Offer.

(b) Contemporaneously with the commencement of the Offer, if practicable, and otherwise reasonably promptly thereafter (it being agreed that the Company shall use commercially reasonable efforts to make such filing no later than one (1) Business Day, and shall in any event make such filing within two (2) Business Days, of the commencement of the Offer), the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended and supplemented from time to time, the " Schedule 14D-9 ") and shall disseminate the Schedule 14D-9, to the extent required by Rule 14D-9 promulgated under the Exchange Act and any other applicable Laws, to the holders of Shares. Except and to the extent otherwise permitted pursuant to Section 6.8 below, the Offer Documents and the Schedule 14D-9 shall contain the Board Recommendation, and the Company hereby consents to the inclusion in the Offer Documents of such recommendation. The Schedule 14D-9 shall comply in all material respects with the requirements of applicable U.S. federal securities laws and on the date first filed with the SEC and on the date first published, sent or given to the Company's stockholders, shall 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 therein, in light of the circumstances under which they were made, not misleading, except that the Company makes no covenant, agreement, representation or warranty with respect to information supplied by Parent or Merger Sub in writing specifically for inclusion in the Schedule 14D-9. Each of the Company, Parent and Merger Sub shall promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent necessary such that the Schedule 14D-9 does 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 therein, in light of the circumstances under which they are made, not misleading. The Company shall take all steps necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and disseminated to the holders of Shares, in each case as and to the extent required by applicable federal securities Laws.

(c) Except in connection with either (i) a Takeover Proposal that the Company Board determines in good faith (after consultation with the Company's outside counsel and financial advisor) constitutes or is reasonably likely to lead to a Superior Proposal or (ii) a Company Adverse Recommendation Change:

(A) Parent and its counsel shall be afforded a reasonable opportunity to review and comment upon the Schedule 14D-9 before it is filed with the SEC and disseminated to holders of Shares; and

(B) The Company shall provide Parent and its counsel copies of any written comments or telephonic notification of any oral comments 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, shall consult with Parent and its counsel prior to responding to any such comments and shall

provide Parent with copies of all written responses and telephonic notification of any oral responses thereto of the Company and its counsel.

(d) In connection with the Offer, the Company shall instruct its transfer agent to furnish Merger Sub promptly with mailing labels containing the names and addresses of the record holders of Shares as of a recent date and of those persons becoming record holders subsequent to such date, together with copies of all lists of stockholders, security position listings and computer files and all other information in the Company's possession or control regarding the beneficial owners of Shares, and shall furnish to Merger Sub such information and assistance (including updated lists of stockholders, security position listings and computer files) as Parent may reasonably request for the purpose of communicating the Offer to the holders of Shares. 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, the Merger and the other Transactions, Parent and Merger Sub shall, until consummation of the Offer, hold in confidence the information contained in any of such labels and lists in accordance with the Confidentiality Agreement, shall use such information only in connection with the Offer, the Merger and the other Transactions and, if this Agreement shall be terminated in accordance with Section 8.1, shall deliver to the Company all copies of such information then in their possession or under their control.

Section 1.3 Directors.

(a) Subject to applicable Law and applicable marketplace rules of The NASDAQ Stock Market LLC applicable to the Company at such time, promptly upon the acceptance for payment of and payment by Merger Sub for Shares pursuant to the Offer satisfying the Minimum Tender Condition (the " Acceptance Time "), and as long as Parent directly or indirectly beneficially owns not less than a majority of the issued and outstanding Shares, Merger Sub shall be entitled to designate such number of directors on the Company Board as will give Merger Sub representation on the Company Board equal to that number of directors, rounded up to the next whole number, that is the product of (i) the total number of directors on the Company Board (giving effect to the directors elected pursuant to this sentence) multiplied by (ii) the percentage that (A) the number of Shares owned by Merger Sub or any other subsidiary of Parent bears to (B) the total number of Shares that are issued and outstanding. The Company shall also, upon the request of Parent, cause such persons designated by Parent to constitute at least the same percentage (rounded up to the next whole number) as is on the Company Board of (I) each committee of the Company Board, subject to compliance with applicable securities Laws and the marketplace rules of The NASDAQ Stock Market LLC, and (II) each board of directors (or similar body) of each Company Subsidiary and each committee of such board of directors (or similar body); provided, however, that in the event that Merger Sub's designees are appointed or elected to the Company Board, until the Effective Time, the Company Board shall retain from the directors who are directors on the date of this Agreement and who are not also officers of the Company, such number of "independent directors" (as defined by the Marketplace Rules of The NASDAQ Stock Market LLC) as may be required by such rules or U.S. federal securities laws (the " Continuing Directors "); and provided further that, in such event, if the number of Continuing Directors shall be reduced below such required number for any reason whatsoever, the Company Board shall cause the Person(s) designated by the remaining Continuing Director(s) to fill such vacancy(ies), and such person(s) shall be deemed to be a Continuing Director(s) for purposes of this Agreement or, if no Continuing Directors then remain, the other directors of the Company then in office shall designate persons to fill such vacancies who are not officers, stockholders or affiliates of the Company, any Company Subsidiary, Parent or Merger Sub, and such persons shall be deemed to be Continuing Directors for purposes of this Agreement. In connection with the foregoing, the Company shall promptly, at the request of Merger Sub, use its commercially reasonable efforts to either increase the size of the Company Board or obtain the resignation of such number of its current directors, or both, as is necessary to enable Merger Sub's designees to be elected or appointed to the Company Board as provided above, and the Company shall

use commercially reasonable efforts to take all actions available to the Company to cause the Merger Sub's designees to be so elected or appointed.

(b) The Company's obligations to appoint designees to the Company Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder and to the then applicable rules and regulations of The NASDAQ Stock Market LLC. The Company shall promptly take all actions required pursuant to Section 14(f) and Rule 14f-l in order to fulfill its obligations under this Section 1.3, including mailing to the Company's stockholders the information required by such Section 14(f) and Rule 14f-1 (which the Company shall mail together with the Schedule 14D-9, as contemplated by Section 1.2(b)) as is necessary to fulfill the Company's obligations under Section 1.3(a); provided, that Parent and Merger Sub shall have timely supplied to the Company in writing, and shall be solely responsible for, any information with respect to Parent, Merger Sub and such designees to the extent required by such Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The provisions of Section 1.3(a) are in addition to and shall not limit any rights Parent, Merger Sub or any of their Affiliates may have as a holder or beneficial owner of Shares as a matter of law with respect to the election of directors or otherwise.

(c) Following the election or appointment of Merger Sub's designees pursuant to Section 1.3(a) and prior to the Effective Time, subject to the terms hereof, the approval by a majority of the Continuing Directors then in office (or, if there shall be only one or two Continuing Directors then in office, all of such Continuing Directors then in office) shall be required to authorize (and such authorization shall (A) not be effective unless there is in office at least one (1) Continuing Director and (B) constitute the authorization of the Company Board, and no other action on the part of the Company, including any action by any committee thereof or any other director of the Company, shall, unless otherwise required by Law, be required or permitted to authorize) (i) any amendment, modification or termination of this Agreement by the Company, (ii) any extension of time for performance of any obligation or action hereunder by Parent or Merger Sub, (iii) any waiver or exercise of any of the Company's rights under this Agreement, (iv) any waiver of any condition to the Company's obligations hereunder, (v) any amendment to the Company's certificate of incorporation or bylaws, (vi) any authorization of any agreement between the Company and any of the Company Subsidiaries, on the one hand, and Parent, Merger Sub or any of their Affiliates on the other hand, or (vii) the taking of any other action by the Company in connection with this Agreement or the Transactions, other than the Company's performance of its obligations under this Agreement, including the consummation of the Merger, and other actions that would not reasonably be expected to adversely affect the interests of the stockholders of the Company (other than Parent or any of its Affiliates). The Continuing Directors shall have the authority to retain such counsel (which may include current counsel to the Company) and other advisors at the expense of the Company as determined by the Continuing Directors and shall have the authority to institute any action on behalf of the Company to enforce performance of this Agreement.

Section 1.4 Option to Acquire Additional Shares.

(a) The Company hereby grants to Merger Sub an option (the " Top-Up Option "), exercisable in accordance with this Section 1.4, to purchase the number of Shares (the " Top-Up 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 Merger Sub immediately prior to the exercise of the Top-Up Option, shall constitute one share more than 90% of the number of Shares then outstanding (after giving effect to the issuance of the Top-Up Option Shares) for a purchase price per Top-Up Option Share equal to the Offer Price. The Top-Up Option may be exercised by Merger Sub in whole but not in part.

(b) In no event shall the Top-Up Option be exercisable: (i) for a number of Shares in excess of the Company's then authorized and unissued Shares (including as authorized and unissued shares of

Common Stock, for purposes of this Section 1.4, any Shares held in the treasury of the Company and any Shares reserved for issuance, other than any Shares reserved for issuance upon conversion of the Convertible Notes, upon the exercise of any outstanding Option or with respect to any other outstanding security convertible into or exercisable or exchangeable for Shares), or (ii) if the exercise of the Top-Up Option would require the sale of 20% or more of the capital stock of the Company requiring approval of the holders of the Company's Shares pursuant to the rules of The NASDAQ Stock Market LLC (and a waiver of or exemption from such requirement is not obtained, it being understood and agreed that the Company shall use commercially reasonable efforts to obtain a waiver or exemption in order to be able to issue the Top-Up Option Shares without obtaining approval of the holders of the Company's Shares).

(c) The Top-Up Option may be exercised by Merger Sub at any time at or after the Acceptance Time and the expiration of any subsequent offering period and on or prior to the tenth (10th) Business Day after the later of (i) the expiration date of the Offer or (ii) the expiration of any Subsequent Offering Period; provided, however, that the obligation of the Company to deliver Top-Up Option Shares upon the exercise of the Top-Up Option is subject to the conditions, unless waived by the Company, that (A) no provision of any applicable Law, and no temporary restraining order, preliminary or permanent injunction or other judgment or order issued by a court of competent jurisdiction or other Governmental Authority of competent jurisdiction, shall prohibit the exercise of the Top-Up Option or the delivery of the Top-Up Option Shares in respect of such exercise, (B) upon exercise of the Top-Up Option, the number of Shares owned by Parent or Merger Sub or any wholly owned Subsidiary of Parent or Merger Sub constitutes one share more than 90% of the number of Shares that will be outstanding immediately after the issuance of the Top-Up Option Shares, and (C) upon exercise of the Top-Up Option, Purchaser covenants to cause the Closing to occur as promptly as practicable following the issuance of the Top-Up Option Shares; and, provided, further, that the Top-Up Option shall terminate concurrently with any termination of this Agreement.

(d) The parties shall cooperate to ensure that the issuance of the Top-Up Option Shares is accomplished in a manner consistent with all applicable Law, including compliance with an applicable exemption from registration of the Top-Up Option Shares under the Securities Act. If Merger Sub wishes to so exercise the Top-Up Option, Merger Sub shall give the Company written notice thereof specifying a place and time for the closing of such purchase (which, subject to applicable Law and any required regulatory approvals, shall be effected as promptly as practicable and not more than ten (10) Business Days after the date of delivery of such written notice). At such closing, (i) the purchase price in respect of the Top-Up Option Shares purchased upon such exercise of the Top-Up Option (which shall equal the product of (x) the number of Top-Up Option Shares being purchased pursuant to the Top-Up Option and (y) the Offer Price) shall be paid to the Company, at Merger Sub's election, either (A) in immediately available funds by wire transfer to an account designated by the Company or (B) by paying in cash an amount equal to not less than the aggregate par value of such Top-Up Option Shares and by delivering Parent's unsecured, non-negotiable, non-transferable promissory note in the principal amount of the balance of such purchase price, which promissory note shall bear interest at the greater of: (i) the applicable short term federal rate per annum (as periodically set by the IRS), and (ii) 3%, shall mature on the first anniversary of the date thereof, and may be prepaid in whole or in part without premium or penalty, and (ii) the Company shall deliver to Merger Sub a certificate or certificates representing the number of Top-Up Option Shares so purchased.

(e) Parent and Merger Sub acknowledge that the Top-Up Option Shares that Merger Sub may acquire upon exercise of the Top-Up Option will not be registered under the Securities Act, and will be issued in reliance upon an exemption thereunder for transactions not involving a public offering. Merger Sub agrees that the Top-Up Option and the Top-Up Option Shares to be acquired upon exercise of the Top-Up Option are being and will be acquired by Merger Sub for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof in violation of the Securities Act. Any certificates evidencing the Top-Up Option Shares shall include any legends required by applicable securities Laws.

ARTICLE 2
THE MERGER

Section 2.1 The Merger. Subject to the terms and conditions of this Agreement and in compliance with the DGCL, Merger Sub shall be merged with and into the Company, the separate existence of Merger Sub shall cease, and the Company shall continue as the surviving corporation. For purposes of this Agreement, (i) the corporation surviving the Merger after the Effective Time is sometimes referred to as the " Surviving Corporation " and (ii) the Company and Merger Sub are collectively referred to as the " Constituent Corporations ".

Section 2.2 Merger Closing.

(a) The Merger shall be consummated (the " Closing ") at 10:00 a.m. (Eastern time) on a date to be specified by the parties, which shall be no later than the second (2nd) Business Day after satisfaction or (to the extent permitted by applicable Law) waiver of the conditions set forth in Article 7 (other than any such conditions that by their nature cannot be satisfied until the Closing Date, which shall be required to be so satisfied or (to the extent permitted by applicable Law) waived on the Closing Date), at the offices of Davis Polk & Wardwell, 450 Lexington Ave, New York, NY, 10017 unless another time, date or place is agreed to in writing by the parties hereto (such date upon which the Closing occurs, the " Closing Date ").

(b) At the Closing, the parties hereto shall cause the Merger to be consummated by filing with the Secretary of State of the State of Delaware a certificate of merger or a certificate of ownership and merger, as the case may be (in any such case, the " Certificate of Merger "), in such form as required by, and executed in accordance with, the relevant provisions of the DGCL and shall make all other filings or recordings required under the DGCL. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such later time as Parent and the Company shall agree and specify in the Certificate of Merger (the time the Merger becomes effective being the " Effective Time ").

Section 2.3 Effect of Merger; Organizational Documents; Directors and Officers.

(a) The Merger shall have the effects set forth in Section 259 of the DGCL.

(b) The certificate of incorporation of the Surviving Corporation shall at the Effective Time be amended in its entirety to read as set forth on Exhibit C , until thereafter amended as provided therein and under the DGCL. In addition, subject to Section 6.9 hereof, Parent shall cause the bylaws of the Surviving Corporation to be amended and restated in their entirety so that, immediately following the Effective Time, they are identical to the bylaws of Merger Sub as in effect immediately prior to the Effective Time, except that all references to the name of Merger Sub therein shall be changed to refer to the name of the Company, and, as so amended and restated, such bylaws shall be the bylaws of the Surviving Corporation, until further amended in accordance with the DGCL. The directors of Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation and shall serve until the earlier of their resignation or removal or their respective successors are duly elected or appointed and qualified, as the case may be. The officers of the Company immediately prior

to the Effective Time shall be the initial officers of the Surviving Corporation and shall serve until the earlier of their resignation or removal or until their respective successors have been duly elected or appointed and qualified, as the case may be.

(c) If requested by Parent prior to the Effective Time, the Company shall use commercially reasonable efforts to cause the directors of each of the Company Subsidiaries (or certain of the Company Subsidiaries as indicated by Parent) to tender their resignations as directors, effective as of the Effective Time, and to deliver to Parent written evidence of such resignations at the Effective Time.

Section 2.4 Conversion of Merger Sub Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or any holder of shares of Merger Sub capital stock, each share of Merger Sub capital stock shall be converted into and become one fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation.

Section 2.5 Conversion of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or any holder of Shares the following shall occur:

(a) Each Share issued and outstanding immediately prior to the Effective Time (other than (i) any Shares to be canceled pursuant to Section 2.5(b) and (ii) any Appraisal Shares) shall at the Effective Time be canceled and converted automatically into the right to receive an amount in cash equal to the Offer Price (the " Merger Consideration "). As of the Effective Time, all such Shares shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of a certificate previously representing any such Shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration upon surrender of such certificate in accordance with Section 2.7, without interest.

(b) Each Share held in the treasury of the Company and each Share owned by Merger Sub, Parent or any direct or indirect wholly-owned subsidiary of Parent or of the Company immediately prior to the Effective Time shall be canceled without any conversion thereof and no payment or distribution shall be made with respect thereto.

(c) The Merger Consideration shall be adjusted to reflect fully the effect of any reclassification, stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Company Common Stock), reorganization, recapitalization or other like change with respect to Company Common Stock occurring (or for which a record date is established) after the date hereof and prior to the Effective Time.

Section 2.6 Appraisal Rights. Notwithstanding anything in this Agreement to the contrary, Shares that are outstanding immediately prior to the Effective Time and that are held by any Person who is entitled to demand and properly demands appraisal of such Shares (" Appraisal Shares ") pursuant to, and who complies in all respects with, Section 262 of the DGCL (" Section 262 ") shall not be converted into the right to receive Merger Consideration as provided in Section 2.5(a), but rather the holders of Appraisal Shares shall be entitled to payment of the fair value of such Appraisal Shares in accordance with Section 262 (and at the Effective Time, such Appraisal Shares shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and such holders shall cease to have any right with respect thereto, except the right to receive the fair value of such Appraisal Shares in accordance with Section 262); provided, however, that if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262, then the right of such holder to be paid the fair value of such holder's Appraisal Shares shall cease and such Appraisal Shares shall be deemed to have been converted as of the Effective Time into, and to have become exchangeable solely for the right to receive, Merger Consideration as provided in Section 2.5(a). The Company shall promptly notify Parent in writing of any written demands received by the Company for appraisal of any

Shares, and Parent shall have the right to direct all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, without the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing. Any portion of the Merger Consideration made available to the Exchange Agent pursuant to Section 2.7(a) to pay for Shares that are instead paid fair value in an appraisal proceeding pursuant to Section 262 shall be returned to Parent upon demand.

Section 2.7 Exchange of Certificates.

(a) Exchange Agent. Prior to the Effective Time, Parent shall enter into an agreement with a bank or trust company mutually acceptable to Parent and the Company (the " Exchange Agent "), which shall provide for the payment of Merger Consideration in accordance with the terms of this Section 2.7. Parent shall, or shall take all steps necessary to enable and cause the Merger Sub to, deposit with the Exchange Agent at or prior to the Effective Time, for the benefit of the holders of Shares outstanding immediately prior to the Effective Time, for payment by the Exchange Agent in accordance with this Article 2, the cash necessary to pay for the Shares converted into the right to receive Merger Consideration and to pay any amounts owing pursuant to Section 2.8 below (the " Exchange Fund "). The Exchange Fund shall not be used for any other purpose. The Exchange Fund shall, pending its disbursement to such holders, be invested by the Exchange Agent as directed by Parent; provided, however, that such investments shall be in obligations of or guaranteed by the United States of America, in commercial paper obligations rated A-1 or P-1 or better by Moody's Investor Service, Inc. or Standard & Poor's Corporation, respectively, or in certificates of deposit, bank repurchase agreements or banker's acceptances of commercial banks with capital exceeding $10 billion (based on the most recent financial statements of such bank which are then publicly available); provided, further, that no gain or loss thereon shall affect the amounts payable hereunder and Parent shall take all actions necessary to ensure that the Exchange Fund includes at all times cash sufficient to satisfy Parent's obligation under this Agreement. Any net profit resulting from, or interest or income produced by, such amounts on deposit with the Exchange Agent will be payable to Parent or as Parent otherwise directs.

(b) Exchange Procedures. As soon as reasonably practicable (and in any event within five (5) Business Days) after the Effective Time, Parent shall cause the Exchange Agent to mail to each Person who was a holder of record of Shares immediately prior to the Effective Time, whose Shares were converted into the right to receive the Merger Consideration pursuant to Section 2.5, (i) the form of letter of transmittal for use in effecting the surrender of stock certificates that immediately prior to the Effective Time represented Shares (each, a " Certificate ") or non-certificated Shares represented by Book-Entry (" Book-Entry Shares ") (which transmittal letter shall be in customary form and shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent) and (ii) instructions for use in surrendering the Certificates or Book-Entry Shares in exchange for the Merger Consideration. Upon surrender of a Certificate or a Book-Entry Share for cancellation to the Exchange Agent, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Exchange Agent, the holder of such Certificate or Book-Entry Share shall be paid promptly in exchange therefor, and Parent shall cause the Exchange Agent to pay to such holder, the Merger Consideration in respect of the Shares previously represented by such Certificate or Book-Entry Share, and the Certificate or Book-Entry Shares so surrendered shall forthwith be canceled. In the event of a transfer of ownership of Shares 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 Certificate so surrendered is registered if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the Person requesting such issuance shall pay any transfer or other Taxes required by reason of the payment to a Person other than the registered holder of such Certificate or establish to the satisfaction of Parent that such Tax has been paid or is not applicable. Each Certificate and Book-Entry Share shall be deemed at all times from and

after the Effective Time to represent only the right to receive upon surrender in accordance with this Section 2.7 the Merger Consideration in respect of the Shares previously represented by such Certificate or Book-Entry Share. No interest shall be paid or shall accrue on any cash payable to holders of Certificates or Book Entry Shares pursuant to the provisions of this Article 2.

(c) No Further Ownership Rights in Shares. The Merger Consideration paid upon the surrender for exchange of Certificates and Book Entry Shares in accordance with the terms of this Article 2 shall be deemed to have been paid in full satisfaction of all rights pertaining to the Shares previously represented by such Certificates and Book Entry Shares. From and after the Effective Time, the Surviving Corporation shall not permit any further registration of transfers on the stock transfer books of the Company of the Shares that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates or Book Entry Shares are presented to the Surviving Corporation or the Exchange Agent for any reason, they shall be canceled and exchanged as provided in this Article 2, except as otherwise provided by Law.

(d) Termination of Exchange Fund. Any portion of the Exchange Fund that remains undistributed to the holders of Shares for 180 days after the Effective Time shall be delivered to Parent, upon demand, and any holders of Certificates or Book Entry Shares who have not theretofore complied with this Article 2 shall thereafter only be entitled to receive from Parent (subject to abandoned property, escheat or similar Laws, as general creditors thereof) payment of their claim for Merger Consideration.

(e) No Liability. To the extent permitted by applicable Law, none of Parent, Merger Sub, the Company or the Exchange Agent shall be liable to any Person in respect of any cash from the Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

(f) Lost Certificates. 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 requested by Parent or the Exchange Agent, the posting by such Person of a bond in such reasonable amount as Parent or the Exchange Agent may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificate the applicable Merger Consideration with respect thereto pursuant to this Agreement.

(g) Withholding Rights. Parent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement, whether to any holder of Shares or pursuant to Section 2.8 below, such amounts as it is required to deduct and withhold with respect to the making of such payment under the applicable Law. To the extent that amounts are so withheld by Parent, such amount shall be (i) paid to the appropriate Taxing Authorities and (ii) treated for all purposes of this Agreement as having been paid to the holder of the Shares, Options, Restricted Stock, Restricted Share Units, or deferred stock units as the case may be, in respect of which such deduction and withholding was made by Parent.

Section 2.8 Equity-Based Compensation Plans and Awards.

(a) Each Option, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall become fully vested, and be cancelled as of immediately following the Effective Time (without regard to the exercise price of such Option) in exchange for the right to receive at such time, in accordance with this Section 2.8, a lump sum cash payment in the amount of the Option Consideration, if any, with respect to such Option. In the event that the exercise price of any Option is equal to or greater than the Offer Price, such Option shall be cancelled, without any consideration being payable in respect thereof, and have no further force or effect.

(b) Each Share of Restricted Stock, each Restricted Share Unit and each deferred stock unit granted pursuant to the Stock Plans outstanding immediately prior to the Effective Time, whether

vested or unvested, that is outstanding immediately prior to the Effective Time, shall become fully vested and be cancelled as of immediately following the Effective Time and shall be converted immediately prior to the Effective Time into a right to a cash payment equal to the Merger Consideration. Such restrictions will lapse immediately following the Effective Time at which such time payment shall be made.

(c) Each holder of Options, Restricted Stock, Restricted Share Units or deferred stock units shall receive from the Surviving Corporation or Parent, in respect and in consideration therefor, as soon as practicable following the Effective Time (but in any event not later than three (3) Business Days), an amount (net of applicable taxes in accordance with Section 2.7(g)) equal to the consideration payable hereunder.

(d) As soon as practicable following the execution of this Agreement, the Company shall mail to each person who is a holder of Options, Restricted Stock, Restricted Share Units or deferred stock units a letter describing the treatment of and payment therefor pursuant to this Section 2.8 and providing instructions for use in obtaining such payment.

(e) The Company Board shall terminate the Stock Plans at or prior to the Effective Time; provided, that such termination may be contingent upon the occurrence of the Closing.

Section 2.9 Convertible Notes. From and after the Acceptance Time, Parent shall provide or cause to be provided to the Company or the Surviving Corporation funds, in the form of a loan on mutually agreed upon terms, necessary to satisfy any cash amounts due upon conversion or repurchase (pursuant to the offer to repurchase contemplated by Section 6.12(b)(i)(B)) of the Convertible Notes in accordance with the Indenture.

Section 2.10 Further Action. If at any time after the Effective Time, any further action is necessary or desirable to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of either of the Constituent Corporations, the officers and directors of the Surviving Corporation are fully authorized in the name of each Constituent Corporation, or otherwise, to take, and shall take, all such lawful and necessary action.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as (a) disclosed in any Qualifying SEC Report (other than (i) any information that is contained in the "Risk Factors" section of such Qualifying SEC Reports, except to the extent such information consists of factual historical statements, and (ii) any forward-looking statements, or other statements that are similarly predictive or forward-looking in nature, contained in such Qualifying SEC Reports) if the relevance of such disclosure as an exception to one or more of the following representations and warranties is reasonably apparent, or (b) set forth on the disclosure letter (each section of which qualifies (i) the correspondingly numbered representation and warranty or covenant and (ii) other sections of this Agreement to the extent reasonably apparent from a reading of the disclosure that such disclosure is applicable to such other sections) delivered by the Company to Parent (the " Company Disclosure Letter "), the Company hereby represents and warrants to Parent and Merger Sub as follows:

Section 3.1 Organization.

(a) Each of the Company and the Company Subsidiaries is a corporation or company duly organized, validly existing and, where applicable, in good standing under the laws of the jurisdiction of its organization, except in the case of the Company Subsidiaries, where the failure of any such Company Subsidiaries to be in good standing, 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 and the

Company Subsidiaries has all requisite corporate power and authority necessary to enable it to own, operate and lease its properties and to carry on its business as now conducted, except in the case of the Company Subsidiaries, where the failure of any such Company Subsidiaries to have such corporate power and authority, 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 and the Company Subsidiaries possesses all licenses, franchises, permits, certificates, approvals and authorizations from Governmental Authorities, or required by Governmental Authorities to be obtained, in each case necessary for the lawful conduct of their respective businesses as now conducted (collectively, " Permits "), except for such Permits, the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect.

(b) The copies of the certificate of incorporation and bylaws of the Company (the " Company Charter Documents ") that are incorporated by reference as exhibits to the Company's Annual Report on Form 10-K for the year ended December 31, 2007 are complete and correct copies of such documents and contain all amendments thereto as in effect on the date of this Agreement. The Company has delivered or made available to Parent or its designee complete and correct copies of the certificate of incorporation and by-laws (or comparable organizational documents) of each of the Company Subsidiaries (the " Subsidiary Documents "), in each case, as amended to the date of this Agreement. All such Company Charter Documents and Subsidiary Documents are in full force and effect and neither the Company nor any of the Company Subsidiaries is in violation of any of their respective provisions, except for such failures to be in full force and effect and such violations which, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. The Company has made available to Parent complete copies of all material minutes (or, in the case of minutes that have not yet been finalized, a brief summary of the meeting) of all meetings of stockholders, the Company Board and each committee of the Company Board between January 1, 2005 and the date hereof; provided that the Company shall not be obligated to make available to Parent any minutes for portions of any meetings that discuss the Transactions or any current or prior alternatives thereto considered by the Company Board or any such committee.

Section 3.2 Capitalization.

(a) The authorized capital stock of the Company consists of (i) 100,000,000 shares of Company Common Stock and (ii) 1,000,000 shares of preferred stock, par value $0.001 per share (" Company Preferred Stock "). As of the close of business on August 27, 2008: (A) 32,353,833 shares of Company Common Stock were issued and outstanding (including 597,949 shares of Restricted Stock; (B) no shares of Company Preferred Stock were issued or outstanding, (C) there were outstanding Options to purchase 845,215 Shares and 2,332,382 Shares were reserved for issuance under the Stock Plans (including upon exercise of the Options); (D) there were 808,503 Shares subject to outstanding Restricted Share Units and (E) there was outstanding $325,000,000 in aggregate principal amount of the Convertible Notes convertible into $325,000,000 cash plus 1,906,630 Shares (after giving effect to any adjustment required as a result of a Make-Whole Fundamental Change and assuming the Acceptance Time occurs on October 10, 2008) and not less than such number of Shares were reserved for issuance upon conversion of the Convertible Notes. Such issued and outstanding Shares have been duly authorized and validly issued, are fully paid and nonassessable, and are free of preemptive or similar rights under any provision of the DGCL and the Company's certificate of incorporation or bylaws or any agreement to which the Company is a party or by which the Company is otherwise bound.

(b) Section 3.2 of the Company Disclosure Letter sets forth a complete and accurate list, as of the close of business on August 27, 2008, of all Stock Plans, indicating for each Stock Plan, as of such date, (i) the number of shares of Company Common Stock issued under such Stock Plan, (ii) the number of shares of Company Common Stock subject to outstanding Options under such Stock Plan, (iii) the number of shares of Company Common Stock reserved for future issuance under such Stock Plan,

(iv) the number of shares of Company Common Stock (including Restricted Stock) vested under such Stock Plan, (v) the number of Shares of Company Common Stock (including Restricted Stock) unvested under such Stock Plan, (vi) the average exercise price of the outstanding Options under such Stock Plan, (vii) the aggregate number of shares of Restricted Stock outstanding, (viii) the average repurchase price relating to the shares of Restricted Stock, (ix) the aggregate number of shares subject to outstanding Restricted Share Units, and (x) the aggregate number of shares subject to outstanding deferred stock unit awards. The Company has made available to Parent complete and accurate copies of all (w) Stock Plans, (x) forms of agreements evidencing Options, (y) forms of agreements evidencing Shares of Restricted Stock, and (z) the forms of agreements evidencing Restricted Share Units.

(c) There are no outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote. Except as set forth in this Section 3.2 or set forth in Section 3.2 of the Disclosure Letter, as of August 27, 2008, there are no issued, reserved for issuance or outstanding (i) shares of capital stock of or other voting securities of or ownership interests in the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or other voting securities of or ownership interests in the Company (iii) warrants, calls, options or other rights to acquire from the Company, or other obligation of the Company to issue, any capital stock or other voting securities or ownership interests in or any securities convertible into or exchangeable for capital stock or other voting securities or ownership interests in the Company or (iv) restricted shares, stock appreciation rights, performance units, contingent value rights, "phantom" stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock or voting securities of the Company (the items in clauses (i) through (iv) being referred to collectively as the " Company Securities "). There are no outstanding obligations of the Company or any Company Subsidiaries to repurchase, redeem or otherwise acquire any of the Company Securities. Neither the Company nor any Company Subsidiaries is a party to any voting agreement with respect to the voting of any Company Securities. Except as set forth in this Section 3.2 or set forth in Section 3.2 of the Disclosure Letter, none of (a) the Shares or (b) Company Securities are owned by any Company Subsidiary. The Company has not, during the period from August 27, 2008 to the date of this Agreement, issued any Company Securities.

(d) The Company has not, between June 30, 2008 and the date of this Agreement, declared or paid any dividend, or declared or made any distribution on, or authorized the creation or issuance of, or issued, or authorized or effected any split-up or any other recapitalization of, any of its capital stock, or directly or indirectly redeemed, purchased or otherwise acquired any of its outstanding capital stock, other than as a result of any cashless exercise of any Option or the acquisition of any Shares of Restricted Stock from employees of the Company or any Company Subsidiary whose employment has terminated with the Company or such Company Subsidiary.

Section 3.3 Authorization; No Conflict.

(a) The Company has the requisite corporate power and authority to enter into and deliver this Agreement and, subject to the adoption of this Agreement by the Company's stockholders under the DGCL to the extent required by applicable Law in the case of the Merger, and to carry out its obligations hereunder. Assuming the accuracy of the representations and warranties of Parent set forth in Section 4.7, the execution and delivery of this Agreement by the Company, the performance by the Company of its obligations hereunder and the consummation by the Company of the Transactions have been duly authorized and approved by the Company Board. Assuming the accuracy of the representations and warranties of Parent set forth in Section 4.7, no other corporate proceedings on the part of the Company is necessary to authorize the execution and delivery of this Agreement, the performance by the Company of its obligations hereunder and the consummation by the Company of the Transactions, except, in the case of the Merger (to the extent required by the DGCL), for the adoption of this Agreement by the holders of a majority of the issued and outstanding Shares (the

" Required Company Stockholder Vote "). This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar Laws of general application affecting or relating to the enforcement of creditors rights generally and equitable principles of general applicability, whether considered in a proceeding at law or in equity (the " Bankruptcy and Equity Exception ").

(b) Neither the execution and delivery of this Agreement by the Company nor the performance or consummation by the Company of the Transactions will (i) result in a violation or breach of or conflict with the Company Charter Documents or the Subsidiary Documents, (ii) result in a violation or breach of or conflict with any provisions of, or result in the loss of any material benefit under or constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under, or result in the termination or cancellation of, or give rise to a right of purchase (including pursuant to any right of first refusal or the like) under, or accelerate the performance required by, or result in a right of termination or acceleration under, or result in the creation of any Lien upon any of the properties or assets owned or operated by the Company or any Company Subsidiaries under any of the terms, conditions or provisions of any Contract to which the Company or any of the Company Subsidiaries is a party or by which the Company or any of the Company Subsidiaries or any of their respective properties or assets may be bound or (iii) subject to receipt of the Required Company Stockholder Vote (to the extent required by the DGCL) and obtaining or making the consents, approvals, orders, authorizations, registrations, declarations and filings referred to in Section 3.3(c) below, violate any judgment, ruling, order, writ, injunction or decree of any Governmental Authority (" Judgment ") or any statute, code, decree, law, ordinance, rule, regulation or order of any Governmental Authority (" Law "), in each case applicable to the Company, any of the Company Subsidiaries or any of their respective properties or assets, other than, with respect to events described in the foregoing clauses (ii) and (iii), any such event or events that, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect.

(c) No consent, approval, order or authorization of, or registration, declaration or filing with, any United States Federal, state or local governmental or regulatory authority, court, body or instrumentality or any governmental or regulatory authority, court, body or instrumentality outside of the United States (each, a " Governmental Authority ") is necessary to be obtained or made by the Company or any Company Subsidiary in connection with the Company's execution and delivery of this Agreement or the consummation by the Company of the Transactions, except for (i) the filing of the Certificate of Merger with the Delaware Secretary of State and appropriate corresponding documents with the appropriate authorities of other states in which the Company is qualified as a foreign corporation to transact business, (ii) compliance with and filings pursuant to the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules and regulations promulgated thereunder (the " HSR Act ") and any other applicable Antitrust Laws, (iii) the filing with the SEC of (A) the Offer Documents and Schedule 14D-9, (B) if necessary, a proxy statement in definitive form relating to the Company Stockholders Meeting (as defined in Section 6.1(b)) (such proxy statement, as amended or supplemented from time to time, (the " Proxy Statement ")) and compliance with other applicable requirements of the Exchange Act, (C) any information statement required by Rule 14f-1 promulgated by the SEC under the Exchange Act (the " Information Statement ") in connection with the Offer and (D) such reports under Section 13 or 16 of the Exchange Act and the rules and regulations promulgated thereunder, as may be required in connection with this Agreement and the Transactions, (iv) compliance with the rules of The NASDAQ Stock Market LLC, (v) compliance with the "blue sky" laws of various states and (vi) such other consents, approvals, orders, authorizations, registrations, declarations or filings, the lack of which, individually or in the aggregate, would not reasonably be expected to prevent consummation of the Offer or the Merger.

(d) The Board of Directors of the Company (the " Company Board "), at a meeting duly called and held, has duly and unanimously adopted resolutions (i) declaring that this Agreement and the Transactions, including the Offer and the Merger, are fair to and in the best interests of the Company and its stockholders, (ii) approving and declaring advisable this Agreement and the Transactions, including the Offer and the Merger (such approval having been made in accordance with the DGCL, including for purposes of Section 203 thereof), and (iii) recommending that the Company's stockholders accept the Offer, tender their Shares to Merger Sub pursuant to the Offer and adopt this Agreement (such recommendation, the " Board Recommendation ").

Section 3.4 Subsidiaries.

(a) All of the Subsidiaries of the Company (each a " Company Subsidiary " and together, the " Company Subsidiaries ") and their respective jurisdictions of organization are identified in Section 3.4(a) of the Company Disclosure Letter. Other than the Company Subsidiaries, the Company does not own or control, directly or indirectly, any membership interest, partnership interest, joint venture interest, other equity interest or any other capital stock of any Person, other than securities held for investment by the Company or any of the Company Subsidiaries and consisting of less than 5% of the outstanding capital stock or other ownership interest of such Person.

(b) All of the outstanding shares of capital stock or other equity securities of, or other ownership interests in, each Company Subsidiary are, where applicable, duly authorized, validly issued, fully paid and nonassessable, and the Company or a Company Subsidiary is the record and beneficial owner of such shares, securities or interests (other than directors' qualifying shares in the case of non-U.S. Subsidiaries, all of which the Company has the power to cause to be transferred for no or nominal consideration to the Company or the Company's designee), free and clear of any Liens, and free of any limitations on voting rights. All such shares of capital stock, equity securities and other ownership interests have been duly and validly issued and are fully paid and nonassessable. There are no subscriptions, options, warrants, calls, rights, convertible securities or other agreements or commitments to which the Company or any Company Subsidiary is a party or by which they are bound and that provide for the issuance, transfer, sales, delivery, voting or redemption (including any rights of conversion or exchange under any outstanding security or other instrument) for any of the capital stock or other equity interests of, or other ownership interests in, any Company Subsidiary. There are no agreements requiring the Company or any Company Subsidiary to make contributions to the capital of, or lend or advance funds to, any Company Subsidiary other than guarantees of bank obligations of Subsidiaries of the Company entered into in the Ordinary Course of Business.

Section 3.5 SEC Reports and Financial Statements.

(a) Since January 1, 2005, the Company has filed with or furnished to the SEC all forms, reports, schedules, certifications, registration statements, definitive proxy statements and other documents required to be filed or furnished by the Company with or to the SEC. All such registration statements, forms, reports, schedules, certifications, registration statements, definitive proxy statements and other documents (including those that the Company may file after the date hereof until the Closing) are referred to herein as the " Company SEC Reports ." As of their respective dates, and giving effect to any amendments or supplements thereto filed prior to the date of this Agreement, (i) the Company SEC Reports filed prior to the date of this Agreement complied, and the Company SEC Reports to be filed after the date of this Agreement will comply, in all material respects with the requirements of the Securities Act of 1933, as amended (the " Securities Act ") and the Exchange Act, as the case may be, and the respective rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Reports, (ii) none of such Company SEC Reports that is not a registration statement contained (or, in the case of Company SEC Reports to be filed after the date of this Agreement, will contain) any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances

under which they were made, not misleading. Each Company SEC Report that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the Securities Act, as of the date such registration statement or amendment became effective, did not, and each such Company SEC Report filed subsequent to the date of this Agreement and prior to 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 to make the statements therein not misleading. The Company has made available to Parent copies of all comment letters received by the Company from the SEC since January 1, 2005 relating to the Company SEC Reports, together with all written responses of the Company thereto. As of the date of this Agreement, there are no outstanding or unresolved comments received from the SEC Staff with respect to the Company SEC Reports. To the Knowledge of the Company, none of the Company SEC Reports is the subject of ongoing SEC review or investigation.

(b) The consolidated balance sheets and the related consolidated statements of operations, consolidated statements of stockholders' equity and consolidated statements of cash flows (including, in each case, any related notes and schedules thereto) (collectively, the " Company Financial Statements ") of the Company contained or to be contained in the Company SEC Reports complied or will comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been or will be prepared in conformity with United States generally accepted accounting principles (" GAAP ") (except as may be indicated in the notes to such financial statements or, in the case of unaudited interim financial statements, as permitted by the SEC on Form 10-Q under the Exchange Act) applied on a consistent basis during the periods involved (except as otherwise noted therein) and present or will present fairly in all material respects the consolidated financial position and the consolidated results of operations and cash flows of the Company and the Company Subsidiaries as of the dates or for the periods presented therein (subject, in the case of unaudited statements, to normal and recurring year end adjustments). Except as disclosed in the Company Financial Statements as of and for the period ended December 31, 2007 or included in the Company SEC Reports filed after that date and prior to the date of this Agreement, the Company and the Company Subsidiaries do not have any liabilities of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be reflected on a consolidated balance sheet of the Company and the Company Subsidiaries other than liabilities that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

(c) Neither the Company nor any Company Subsidiary is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract (including any contract or arrangement relating to any transaction or relationship between or among the Company and any of the Company Subsidiaries, on the one hand, and any unconsolidated Affiliate, including, any structured finance, special purpose or limited purpose entity or Person, on the other hand, or any "off-balance sheet arrangements" (as defined in Item 303(a) of Regulation S-K of the SEC), where the results, purpose or effect of such contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company or any of the Company Subsidiaries in the Company SEC Reports.

(d) The Company is in compliance in all respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 (the " Sarbanes-Oxley Act "), except for such noncompliance as has not and would not reasonably be expected to have a Company Material Adverse Effect. Each required form, report and document containing financial statements that has been filed with or submitted to the SEC was accompanied by the certifications required to be filed or submitted by the Company's chief executive officer and chief financial officer pursuant to the Sarbanes-Oxley Act and, at the time of filing or submission of each such certification, such certification complied in all material respects with the applicable provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder.

(e) The Company maintains disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act. Such disclosure controls and procedures are effective to ensure that all

material information concerning the Company and the Company Subsidiaries, taken as a whole, is made known on a timely basis to the individuals responsible for the preparation of the Company's filings with the SEC and other public disclosure documents. The Company is in compliance in all material respects with the applicable listing and other rules and regulations of The NASDAQ Stock Market LLC.

(f) To the Knowledge of the Company, the Company and the Company Subsidiaries have not violated the provisions of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the " FCPA "), except for any such violations that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. The Company has disclosed to Parent all internal investigations and, to the Knowledge of the Company, all external, governmental or other regulatory investigations, in each case regarding any action or any allegation of any action prohibited by the FCPA, except for any such investigations that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.6 Absence of Material Adverse Changes, etc. Since December 31, 2007, there has not been or occurred any event, change, occurrence or development of a state of facts that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect. From December 31, 2007 until the date of this Agreement, except as contemplated hereby, (a) the business of the Company and the Company Subsidiaries, taken as a whole, has been conducted in the Ordinary Course of Business and (b) there has not been any action or event that would have required the consent of Parent under Section 5.1 of this Agreement (other than paragraph (b)(vii) of Section 5.1) had such action or event occurred after the date of this Agreement.

Section 3.7 Litigation. There are no suits, actions, claims or legal, administrative, arbitration or other proceedings or governmental or regulatory investigations pending or, to the Knowledge of the Company, threatened, to which the Company or any of the Company Subsidiaries is a party, or, to the Knowledge of the Company, that materially affects the business or assets of the Company or any of the Company Subsidiaries, except where such suits, actions, claims, proceedings or investigations, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. There are no material Judgments outstanding (or, to the Knowledge of the Company, threatened to be imposed) against the Company or any of the Company Subsidiaries, except for any such threatened Judgments that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.8 Disclosure Documents.

(a) 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 contemplated by this Agreement (the " Company Disclosure Documents "), including the Schedule 14D-9, the proxy or information statement of the Company (the " Company Proxy Statement "), if any, to be filed with the SEC in connection with the Merger, 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.

(b) (i) The Company Proxy Statement, as supplemented or amended, if applicable, at the time such Company Proxy Statement or any amendment or supplement thereto is first mailed to stockholders of the Company and at the time such stockholders vote on adoption of this Agreement and at the Effective Time, and (ii) any Company Disclosure Document (other than the Company Proxy Statement), at the time of the filing of such Company Disclosure Document or any supplement or amendment thereto 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 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.

(c) The information to be supplied by or on behalf of the Company for inclusion or incorporation by reference in the Offer Documents, on the date the Offer Documents are first published, sent or given to holders of Shares, shall 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 therein, in light of the circumstances in which they shall be made, not misleading. If at any time prior to the Acceptance Time any fact or event relating to the Company or any of its Affiliates should be discovered by the Company that should be set forth in a supplement to the Offer Documents, the Company shall, promptly after becoming aware thereof, inform Parent of such fact or event.

Section 3.9 Broker's or Finder's Fees. Except for UBS Securities LLC (the " Company Financial Advisor "), no agent, broker, investment banker, or similar Person or firm acting on behalf of the Company or any Company Subsidiary or under the Company's or any Company Subsidiary's authority is or will be entitled to any advisory, commission or broker's or finder's fee or similar fee or commission or reimbursement of expenses from any of the parties hereto in connection with any of the Transactions. The Company has heretofore made available to Parent a complete and correct copy of the Company's engagement letter with the Company Financial Advisor, which letter describe all fees payable to the Company Financial Advisor in connection with the Transactions, all agreements under which any such fees or any expenses are payable and all indemnification and other agreements related to the engagement of the Company Financial Advisor, and the Company will pay such fees and expenses pursuant to such engagement letter to the Company Financial Advisor at the Closing.

Section 3.10 Employee Plans.

(a) Section 3.10(a) of the Company Disclosure Letter sets forth a complete and accurate list, as of the date of this Agreement, of all Employee Benefit Plans. For purposes of this Agreement, " Employee Benefit Plan " means: (i) any "employee pension benefit plan" (as defined in Section 3(2) of ERISA), (ii) any "employee welfare benefit plan" (as defined in Section 3(1) of ERISA), (iii) any material employment, consultancy or similar service plan, agreement or arrangement, and (iv) any other material written or oral plan, agreement or arrangement providing direct or indirect compensation or benefits, including insurance coverage, severance benefits, disability benefits, deferred compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other forms of equity or cash incentive compensation or post-retirement compensation and all unexpired severance agreements, medical, dental, vision or prescription benefits for the benefit of, or relating to, any current or former employee, director or independent contractor of the Company or any Company Subsidiary that is sponsored, maintained or contributed to by the Company or any Company Subsidiary, or with respect to which the Company or any Company Subsidiary has any liability, excluding any of the foregoing that are (x) required to be maintained by the Company or any of the Company Subsidiaries under the Laws of any foreign jurisdiction, or (y) under which neither the Company nor any Company Subsidiary has any actual or contingent legal obligations.

(b) With respect to each Employee Benefit Plan, the Company has made available in the "data room" to Parent a complete and accurate copy, to the extent applicable, of (i) such Employee Benefit Plan and any amendments thereto, (ii) the most recent annual report (Form 5500) filed with the IRS, (iii) each trust or funding agreement, insurance policy summaries, group annuity contract and summary plan description and any material modifications thereto, if any, or any written summary provided to participants with respect to any plan for which no summary plan description exists, and (iv) the most recent determination letter (or, if applicable, advisory or opinion letter) from the IRS.

(c) Each Employee Benefit Plan has been administered in all material respects in accordance with ERISA, the Code and all other applicable Laws and in accordance with its terms.

(d) Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a determination or opinion letter from the IRS to the effect that such Employee Benefit Plan is qualified and the plan and trust related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, and neither the Company nor any Company Subsidiary has received any notice that any such determination or opinion letter has been revoked.

(e) None of the Company, any of the Company's Subsidiaries or any of their ERISA Affiliates has within the last six (6) years (i) ever sponsored, maintained or been obligated to contribute to an Employee Benefit Plan which is or was ever subject to Section 412 of the Code or Title IV of ERISA or (ii) ever been obligated to contribute to a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA). For the purposes of this Agreement, " ERISA Affiliate " means any entity which is a member of (A) a controlled group of corporations (as defined in Section 414(b) of the Code), (B) a group of trades or businesses under common control (as defined in Section 414(c) of the Code), or (C) an affiliated service group (as defined under Section 414(m) of the Code or the regulations under Section 414(o) of the Code), any of which includes or included the Company or a Company Subsidiary. Neither the Company nor any Company Subsidiary sponsors or has sponsored any compensatory equity plans other than the Stock Plans or otherwise grants or has granted any equity-based compensation awards other than under the Stock Plans.

(f) The transactions contemplated by this Agreement will not result (either alone or in combination with any other event) in: (i) any payment of, or increase in, remuneration or benefits, to any stockholder, director or employee of the Company or any of the Company Subsidiaries; (ii) any cancellation of indebtedness owed to the Company by any stockholder, director or employee of the Company; (iii) the acceleration of the vesting, funding or time of any payment or benefit to any stockholder, director or employee of the Company; or (iv) result in any "parachute payment" within the meaning of Section 280G of the Code (whether or not such payment is considered to be reasonable compensation for the services rendered).

(g) None of the Employee Benefit Plans promises or provides retiree medical or other retiree welfare benefits to any person, except as required by applicable Law or to the extent the full cost of such benefits shall be borne by such person.

(h) Each Employee Benefit Plan has been operated in reasonable good faith compliance with the applicable provisions of Section 409A of the Code.

(i) Section 3.10(i) of the Company Disclosure Letter contains a correct and complete list identifying each International Plan. Copies of each International Plan and any amendments thereto have been made available in the "data room" to Parent, and copies of, to the extent applicable, any related trust or funding agreements or insurance policies, amendments thereto, actuarial reports relating thereto and prospectuses or summary plan descriptions relating thereto have been made available in the "data room" to Parent. To the Company's Knowledge, each International Plan has been maintained in material compliance with its terms and with the requirements prescribed by applicable Law (including any special provisions relating to qualified plans where such International Plan was intended to so qualify) and has been maintained in good standing with the applicable regulatory authorities.

(j) To the Company's Knowledge, no transaction prohibited by Section 406 of ERISA or Section 4975 of the Code has occurred with respect to any Employee Benefit Plan which is covered by Title I of ERISA, which transaction has or will cause the Company or any Company Subsidiary to incur any material liability under ERISA, the Code or otherwise, excluding transactions effected pursuant to and in compliance with a statutory or administrative exemption.

(k) The Company's Compensation Committee has (i) approved each employment, compensation, severance and employee benefit agreement, arrangement or understanding pursuant to which

consideration is payable to any director or employee of the Company or any Company Subsidiary as an "employment compensation, severance or other employee benefit arrangement" within the meaning of Rule 14d-10(d)(1) under the Exchange Act, and (ii) taken all other actions necessary or advisable to satisfy the requirements of the non-exclusive safe harbor with respect to such agreement, arrangement or understanding in accordance with Rule 14d-10(d)(2) under the Exchange Act. The Company Board has determined that the Company's Compensation Committee is composed solely of "independent directors" in accordance with the requirements of Rule 14d-10(d)(2) under the Exchange Act and the instructions thereto.

Section 3.11 Opinion of Financial Advisor. The Company Board has received from the Company Financial Advisor an opinion to the effect that, as of the date of such opinion, and based upon and subject to the factors and assumptions set forth therein, the consideration to be received by the holders of Company Common Stock pursuant to the Offer and the Merger, taken together, is fair, from a financial point of view, to such holders (other than Parent, Merger Sub and their respective Affiliates).

Section 3.12 Taxes.

(a) The Company and each of the Company Subsidiaries has filed all Tax Returns that it was required to file, and all such Tax Returns were correct and complete, except for any failure to file or errors or omissions that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. The Company and each of the Company Subsidiaries has paid on a timely basis all Taxes due and owing (whether or not shown to be due on any such Tax Returns), or, where payment is not yet due, has established in accordance with GAAP an adequate accrual for all material Taxes through the end of the last period for which the Company and the Company Subsidiaries ordinarily record items on their respective books, except for any failures to so pay that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. There are no Liens on any of the assets, rights or properties of the Company or any Company Subsidiary with respect to Taxes (other than Liens for Taxes not yet due and payable or for Taxes that the Company or a Company Subsidiary is contesting in good faith through appropriate proceedings and for which adequate accruals and reserves have been established in accordance with GAAP).

(b) The Company has made available to Parent correct and complete copies of all income and franchise (i.e., State tax returns) Tax Returns and any associated examination reports and statements of deficiencies assessed against or agreed to by the Company or any of the Company Subsidiaries since January 1, 2003. To the Company's Knowledge, all income and franchise Tax Returns filed by the Company or any Company Subsidiary for years ending prior to January 1, 2003 have been examined and closed or are Tax Returns with respect to which the applicable period for assessment, giving effect to extensions of waivers, has expired. No claim, action, suit, or proceeding in respect of any material Taxes or examination or audit of any material Tax Return of the Company or any of the Company Subsidiaries by any Taxing Authority is currently in progress or, to the Company's Knowledge, has been threatened.

(c) Neither the Company nor any Company Subsidiary has been included in any "consolidated", "unitary" or "combined" Tax Return provided for under the Law of the United States, any foreign jurisdiction or any state or locality with respect to Taxes for any taxable period for which the statute of limitations has not expired (other than a group of which the Company and/or any Company Subsidiary are the only members).

(d) Neither the Company nor any Company Subsidiary has applied for and/or received a ruling or determination from a Tax Authority regarding a past or prospective transaction of the Company or any Company Subsidiary, except for any rulings or determinations that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

(e) To the Company's Knowledge, no written claim has been made by a Tax Authority in a jurisdiction where the Company or any of the Company Subsidiaries does not file Tax Returns that the Company or any Company Subsidiary is or may be subject to taxation by that jurisdiction, except for any claims that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

(f) Neither the Company nor any Company Subsidiary has been a United States real property holding company within the meaning of Section 897(c) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(g) During the two-year period ending on the date hereof, neither the Company nor any of the Company Subsidiaries was a distributing corporation or a controlled corporation in a transaction intended to be governed by Section 355 of the Code.

(h) The Company and each of the Company Subsidiaries has properly withheld and timely paid over to the applicable Taxing Authority all Taxes that it is required to withhold from amounts paid to any employee, partner, independent contractor, creditor, stockholder or other person, except for any such failures to do so that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

(i) Neither the Company nor any of the Company Subsidiaries is, or has been, a party to any Tax Sharing Agreement (other than an agreement exclusively among the Company and the Company Subsidiaries) pursuant to which it will have any obligation to make any payments in respect of Taxes after the Effective Time.

(j) Neither the Company nor any of the Company Subsidiaries has participated in a "listed transaction" within the meaning of Treasury Regulation Section 1.6011 4(b)(2).

Section 3.13 Environmental Matters.

(a) Except as has not had and would not reasonably be expected to have, individually or the aggregate, a Company Material Adverse Effect:

(i)

The Company and the Company Subsidiaries are and have for the past five (5) years been in compliance with all applicable Environmental Laws, which compliance includes obtaining, maintaining and complying with all permits, notices, approvals and authorizations, if any, required under Environmental Laws in connection with the operation of the Company's and any Company Subsidiary's businesses or leased real property.

(ii)

There are no pending or, to the Knowledge of the Company, threatened, demands, claims, investigations, proceedings, information requests, or notices against the Company or any Company Subsidiary or, to the Knowledge of the Company, any property currently or formerly leased by the Company or any Company Subsidiary alleging non-compliance with or liability under any Environmental Law.

(iii)

To the Knowledge of the Company, there are no conditions associated with the Company or any Company Subsidiary or its operations or any real property currently or formerly leased or operated by the Company or any Company Subsidiary or any other property, including any property to which the Company or any Company Subsidiary or any person working at the request or direction of the Company or any Company Subsidiary has arranged for the disposal or treatment of Hazardous Substances, which would reasonably be expected to give rise to any violation of any Environmental Laws or result in the Company or any Company Subsidiary incurring Environmental Liabilities.

(iv)

To the Knowledge of the Company, there has been no material environmental investigation, study, audit, test, review or other analysis conducted in relation to the business of the Company or any Company Subsidiaries or any property or facility now or previously owned or leased by the Company or any Company Subsidiaries that has not been delivered to Parent at least five Business Days prior to the date hereof.

(v)

Neither the Company nor any Company subsidiary owns or leases or licenses or, during the prior five (5) years has owned or leased or licensed, any real property in New Jersey or Connecticut.

(vi)

Neither the Company nor any Company Subsidiary has assumed by contract or other binding agreement or by operation of Law any liabilities of a third party arising under or pursuant to any Environmental Law or has agreed to indemnify, defend or hold harmless any third party for any liabilities arising under or pursuant to any Environmental Law.

(b) The parties agree that the only representations and warranties of the Company in this Agreement as to any environmental matters or any other obligation or liability with respect to Hazardous Substances or materials of environmental concern are those contained in this Section 3.13.

Section 3.14 Compliance With Laws.

(a) The Company and each of the Company Subsidiaries is, and has during the prior three (3) years been, in compliance with, and is not and has not been in violation of during the prior three (3) years, and to the Knowledge of the Company is not under investigation with respect to and has not been threatened during the prior three (3) years to be charged with any violation of, any applicable Law with respect to the conduct of its business, or the ownership or operation of its properties or assets, except for failures to comply or violations that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

(b) Each of the products of the Company and the Company Subsidiaries that is currently being sold by or on behalf of the Company or any of the Company Subsidiaries, and each of the product candidates that is currently being developed by the Company or any of the Company Subsidiaries, is being, and at all times has been, developed, tested, manufactured and stored, as applicable, in compliance with (i) the Federal Food, Drug and Cosmetic Act (the " FDA Act ") and applicable regulations issued and guidances by the FDA, including those requirements relating to good manufacturing practice, good laboratory practice and good clinical practice, where such Laws were applicable to such development, testing, manufacturing and storage activities, (ii) all United States Laws regarding promotional practices, where such Laws were applicable, and (iii) any equivalent Laws of any applicable foreign jurisdiction, in each case under clauses (i), (ii) and (iii), except where the failure to so comply, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect.

(c) To the Company's Knowledge, the clinical trials (including any post-marketing studies) conducted by the Company or the Company Subsidiaries (which, for the avoidance of doubt, shall not include investigator-sponsored or cooperative group trials) were, and if still pending, are, being conducted in all material respects in accordance with all clinical protocols, informed consents and applicable requirements of the FDA or, when applicable, equiv

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates