AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

Among

IROBOT CORPORATION,

FARRAGUT ACQUISITION, LLC,

NEKTON RESEARCH, LLC

and

THE MEMBERS REPRESENTATIVE

Dated as of September 5, 2008

TABLE OF CONTENTS

AGREEMENT AND PLAN OF MERGER

      THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of September 5, 2008, is by and among iRobot Corporation, a Delaware corporation (“ Parent ”), Farragut Acquisition, LLC, a North Carolina limited liability company (“ MergerCo ”), Nekton Research, LLC, a North Carolina limited liability company (the “ Company ”), and R. Gordon Caudle, as Members Representative (the “ Members Representative ”). Certain terms used in this Agreement are defined in Section 1.1 hereof. An index of defined terms used in this Agreement is set forth in Section 1.2 hereof.

      WHEREAS , Parent, MergerCo and the Company wish to effect a business combination through a merger (the “ Merger ”) of MergerCo with and into the Company on the terms and conditions set forth in this Agreement and in accordance with the North Carolina Limited Liability Company Act, as amended (the “ NCLLCA ”);

      WHEREAS , the Board of Representatives of the Company (the “ Company Board ”) has approved this Agreement, the Merger and the other transactions contemplated by this Agreement and determined that this Agreement, the Merger and the other transactions contemplated by this Agreement are advisable and in the best interest of its members;

      WHEREAS , the Boards of Directors of Parent and MergerCo have approved this Agreement, the Merger and the other transactions contemplated by this Agreement and determined that this Agreement, the Merger and the other transactions contemplated by this Agreement are in the best interest of their respective stockholders and members;

      WHEREAS , the Members Representative, Parent and the Escrow Agent shall enter into an Escrow Agreement to be effective at, and subject to the occurrence of, the Effective Time; and

      WHEREAS , Parent, MergerCo and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger, and also to prescribe various conditions to the Merger.

      NOW THEREFORE , in consideration of the mutual agreements and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I — DEFINED TERMS

      Section 1.1. Certain Terms Defined . For the purposes of this Agreement:

     “ Administrator ” means the Secretary of State of the State of North Carolina.

     An “ Affiliate ” of any Person shall mean another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person. For purposes of this definition, “ control ” (and its derivatives) means the possession, directly or indirectly, of the power to direct or cause the direction of the management

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and policies of a Person, whether through ownership of capital stock or other equity interests, by contract or agreement or otherwise.

     “ Aggregate Cash Consideration At Closing ” means the Base Cash Consideration less the Escrow Amount.

     “ Articles of Organization ” means the Company’s articles of organization filed with the Administrator on December 8, 2000, as may be amended as of the date hereof.

     “ Balance Sheet Date ” means June 30, 2008.

     “ Base Cash Consideration ” means $10,000,000 in cash, subject to the adjustments contemplated by Section 3.3 , less Indebtedness of the Company, if any, assumed or paid by Parent, Merger Co or the Surviving Company pursuant to Section 3.2 .

     “ Business ” means the business of the Company as currently conducted and proposed to be conducted.

     “ Business Day ” means any day other than a day on which the Securities and Exchange Commission is closed.

     “ Class A Unit ” means an equity interest in the Company that (a) represents a fractional part of the total Company Membership Units and (b) has the respective rights, benefits and obligations specified in the Operating Agreement with respect to Class A Units.

     “ Class B Unit ” means an equity interest in the Company that (a) represents a fractional part of the total Company Membership Units and (b) has the respective rights, benefits and obligations specified in the Operating Agreement with respect to Class B Units.

     “ Code ” shall mean the Internal Revenue Code of 1986, as amended.

     “ Company Copyrights ” means registered and material unregistered Copyrights owned by the Company or used or held for use by the Company in the Business.

     “ Company Intellectual Property ” means and includes, without limitation, the Products, Company Patents, Company Marks, Company Copyrights and Company Trade Secrets.

     “ Company Intellectual Property Assets ” means all Intellectual Property Assets owned by the Company or used or held for use by the Company in the Business and all Products.

     “ Company Marks ” means registered and material unregistered Marks owned by the Company or used or held for use by the Company in the Business.

     “ Company Material Adverse Effect ” shall mean any material adverse change, event, circumstance or development with respect to, or material adverse effect on, the business, assets, liabilities, condition (financial or otherwise) or results of operations of the Company, taken as a whole, provided , however , that none of the following constitute, or will be considered in determining whether there has occurred, a Company Material Adverse Effect, but only to the

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extent that such changes, events, circumstances, developments or effects do not adversely affect the Company in a materially disproportionate manner relative to other similarly situated participants in the industries or markets in which it operates: (a) changes that are the result of factors generally affecting the industries or markets in which the Company operates; (b) changes resulting from the announcement of the transactions contemplated hereby; (c) changes in laws, rules, regulations or GAAP or the interpretation thereof; and (d) changes that are the result of (i) economic factors affecting the national, regional or world economy, including changes in general financial or capital market conditions, such as interest rates or currency exchange rates, (ii) acts of God, (iii) hostilities or acts of war, (iv) sabotage or (v) terrorism.

     “ Company Membership Unit ” shall mean any of the Class A Units and Class B Units.

     “ Company Patents ” means Patents owned by the Company or used or held for use by the Company in the Business.

     “ Company Trade Secrets ” means Trade Secrets owned by the Company or used or held for use by the Company in the Business.

     “ Company Transaction Expenses ” means all fees, costs or expenses paid or payable by the Company (whether on behalf of itself or on behalf of any of the Equityholders or the Members Representative) in connection with the transactions contemplated hereby, including with respect to financial, accounting, tax and legal advisors to such Persons.

     “ Contract ” means any contract, commitment, agreement, instrument, arrangement, understanding, obligation, undertaking, permit, concession, franchise, license, whether oral or written (including all amendments thereto).

     “ Copyrights ” means copyrights in both published and unpublished works, including without limitation all compilations, databases and computer programs, manuals and other documentation and all copyright registrations and applications, and all derivatives, translations, adaptations and combinations of the above.

     “ Credit Agreements ” shall mean that certain Promissory Note, dated as of December 17, 2004, issued by the Company to Wachovia Bank, National Association and that certain Business BankLine Note and Agreement, dated as of May 22, 2001, by and between the Company and Wachovia Bank, N.A.

     “ Current Assets " means, as of the date of determination, the amount of cash and cash equivalents, accounts receivables, prepaid renewal fees and all other current assets of the Company (but excluding any restricted cash), in each case as determined in accordance with GAAP as consistently applied and on a basis consistent with the Base Balance Sheet.

     “ Current Liabilities " means, as of date of determination, the amount of accounts payable, accrued expenses, accrued interest, accrued but unpaid Taxes and all other current liabilities of the Company, in each case as determined in accordance with GAAP as consistently applied and on a basis consistent with the Base Balance Sheet. Current Liabilities shall be deemed to include all fees, costs and expenses incurred or payable by the Company (whether on behalf of itself or

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on behalf of any of the Equityholders or the Members Representative) in connection with the negotiation, preparation and execution of this Agreement and the performance or consummation of the Merger that have not been paid on or prior to the Closing Date, including, without limitation, with respect to financial, accounting, tax and legal advisors to such Persons.

     “ Environment ” shall mean soil, surface waters, groundwater, land, stream sediments, surface or subsurface strata and ambient air and biota living in or on such media.

     “ Environmental Laws ” shall mean all laws relating to protection of the Environment, including, without limitation, the federal Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the Endangered Species Act and similar federal, state and local laws as in effect on the Closing Date.

     “ Equity Plan ” means the Nekton Research Equity Plan.

     “ Equityholders ” means the Members and the holders of Phantom Equity Units.

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

     An “ ERISA Affiliate ” of the Company shall mean any entity that is considered a single employer with the Company under ERISA Section 4001(b) or part of the same “controlled group” as the Company for purposes of ERISA Section 302(d)(8)(c).

     “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

     “ First Measurement Period ” means the period starting on the Closing Date and continuing through and including January 2, 2010.

     “ GAAP ” shall mean generally accepted accounting principles as applied in the United States on a consistent basis.

     “ Government Contract ” means any contract or agreement to which the Company is a party or by which it is bound the ultimate contracting party of which is a Governmental Authority (including any subcontract with a prime contractor or other subcontractor who is a party to any such contract or agreement).

     “ Hazardous Material ” shall mean any pollutant, toxic substance, hazardous waste, hazardous materials, hazardous substances, petroleum or petroleum-containing products as defined in, or listed under, any Environmental Law.

     “ Indebtedness ” means, with respect to the Company, (a) all indebtedness of the Company, whether or not contingent, for borrowed money, (b) all obligations of the Company for the deferred purchase price of property or services, (c) all obligations of the Company evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by the Company, (e) all obligations of the Company as lessee under leases that have

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been or should be recorded as capital leases in accordance with GAAP, (f) all obligations, contingent or otherwise, of the Company under acceptance, letter of credit or similar facilities, (g) all obligations of the Company to purchase, redeem, retire, defease or otherwise acquire for value any equity interest or equity securities of the Company or any warrants, rights or options to acquire such equity interest or equity securities, (h) all Indebtedness of other Persons of any type referred to in clauses (a) through and including (g) above guaranteed directly or indirectly in any manner by the Company, and (i) all Indebtedness of any type referred to in clauses (a) through and including (g) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Encumbrance on property (including accounts and contract rights) owned by the Company, even though the Company has not assumed or become liable for the payment of such Indebtedness.

     “ Intellectual Property ” shall mean (a) patents, registered and unregistered trademarks and service marks, brand names, trade names, domain names, copyrights, designs and trade secrets and (b) applications for and registrations of such patents, trademarks, service marks, trade names, domain names, copyrights and designs.

     “ Intellectual Property Assets ” mean any and all of the following, as they exist throughout the world: (a) Patents, (b) Marks, (c) Copyrights, (d) Trade Secrets, (e) any and all other intellectual property rights and/or proprietary rights relating to any of the foregoing, and (f) goodwill, franchises, licenses, permits, consents, approvals, and claims of infringement and misappropriation against third parties.

     “ IRS ” shall mean the United States Internal Revenue Service.

     “ knowledge ,” “ to the Company’s knowledge ” and words and phrases of similar import shall mean those facts and circumstances actually known by either Jeffrey J. E. Bourn and Frederick Vosburgh.

     “ Law ” means any federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

     “ Licenses In ” means licenses, sublicenses or other agreements under which the Company is granted rights by others in Intellectual Property Assets.

     “ Licenses Out ” means licenses, sublicenses or other agreements under which the Company has granted rights to others in Intellectual Property Assets.

     “ Lien ” means, with respect to any asset, any mortgage, lien, license, pledge, charge, security interest, restriction or encumbrance of any kind in respect of such asset.

     “ Losses ” of a Person shall mean, without duplication, any and all losses, liabilities, diminution in value, damages, claims, awards, judgments, costs and expenses, interest and penalties (including, without limitation, reasonable attorneys’ fees) asserted against, imposed upon or sustained or incurred by such Person (including, without limitation, any claim, action, suit, arbitration, inquiry, proceeding or investigation initiated by such Person).

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     “ Marks ” means rights in registered and unregistered trademarks, service marks, trade names, trade dress, logos, packaging design, slogans and Internet domain names, and registrations and applications for registration of any of the foregoing.

     “ Measurement Period ” means the First Measurement Period and the Second Measurement Period.

     “ Measurement Period Revenues ” means, with respect to the First Measurement Period and the Second Measurement Period, the dollar amount of the revenues recognized by the Surviving Company (in accordance with GAAP applied on a consistent basis) during such period, which, for the avoidance of doubt, shall include revenues recognized by the Surviving Corporation (in accordance with GAAP applied on a consistent basis) in respect of the Seaglider product.

     “ Milestones ” means the First Milestone and the Second Milestone.

     “ Merger Consideration ” means the sum of (a) the Base Cash Consideration, (b) the Financial Additional Consideration and (c) the Business Additional Consideration.

     “ Operating Agreement ” means the Company’s Amended and Restated Operating Agreement dated August 6, 2004, as may be amended as of the date hereof.

     “ Parent Material Adverse Effect ” shall mean any material adverse change, event, circumstance or development with respect to, or material adverse effect on, the business, financial condition or results of operations of Parent and MergerCo, taken as a whole, or the ability of Parent or MergerCo to consummate the transactions contemplated by this Agreement.

     “ Patents ” means patents, patent applications of any kind, patent rights, inventions, discoveries and invention disclosures (whether or not patented).

     “ Person ” shall mean an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity or group (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended).

     “ Phantom Equity Unit ” means an equity interest that has been granted under the Equity Plan and which is convertible into Class B Units (whether or not vested) at the Effective Time.

     “ Products ” means products, computer programs and/or services and related documentation currently or previously researched, designed, developed, manufactured, performed, licensed, sold, distributed and/or otherwise made available by the Company.

     “ Release ” shall mean any releasing, disposing, discharging, injecting, spilling, leaking, pumping, dumping, emitting, escaping or emptying of a Hazardous Material into the Environment.

     “ Second Measurement Period ” means the period starting on January 3, 2010 and continuing through and including January 1, 2011.

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     “ Securities Act ” means the Securities Act of 1933, as amended.

     “ Superior Proposal ” shall mean any unsolicited, bona fide written proposal regarding an Acquisition Transaction (a) which, if any cash consideration is involved, is not subject to any material financing contingencies (or if financing is required, such financing is then fully committed to the third party making such Acquisition Transaction without any material conditions thereto) and (b) with respect to which the Company Board shall have reasonably determined in good faith (after consultation with the Company’s outside legal counsel, and after taking into account, among other things, the financial, legal and regulatory aspects of such Acquisition Transaction) that (i) the acquiring party is capable of consummating the proposed Acquisition Transaction on the terms proposed within a reasonable time period and (ii) that the proposed Acquisition Transaction would, if consummated in accordance with its terms within a reasonable time period, be more favorable to the Members, from a financial point of view, than the transactions contemplated by this Agreement.

     “ Tax ” and “ Taxes ” means all federal, state, local and foreign net income, alternative or add-on minimum, estimated, gross income, gross receipts, sales, use, ad valorem , value added, transfer, franchise, capital profits, lease, service, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit taxes, customs duties and other taxes, governmental fees and other like assessments and charges of any kind whatsoever (including Tax liabilities incurred or borne as a transferee or successor, or by contract or otherwise), together with all interest, penalties, additions to tax and additional amounts with respect thereto.

     “ Tax Returns ” means all returns, declarations, reports, claims for refund, information statements and other documents relating to Taxes, including all schedules and attachments thereto, and including all amendments thereof.

     “ Tax Authority ” means any Governmental Authority responsible for the imposition or collection of any Tax.

     “ Trade Secrets ” means rights in know-how, trade secrets, confidential or proprietary information, research in progress, algorithms, data, designs, processes, formulae, drawings, schematics, blueprints, flow charts, models, strategies, prototypes, techniques, testing procedures and testing results.

     “ Treasury Regulations ” means the Treasury Regulations (including temporary regulations) promulgated by the United States Department of Treasury with respect to the Code or other federal tax statutes.

     “ Unitholder ” shall mean each of, and “ Unitholders ” shall mean collectively, R. Gordon Caudle, Jeffrey J. E. Bourn, Frederick Vosburgh, Charles Pell, Ian P. Wainwright and Stephen A. Wainwright.

     “ WARN ” shall mean the Worker Adjustment and Retraining Notification Act of 1988, as amended.

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      Section 1.2. Definitions . The following terms have the meanings set forth in the Sections set forth opposite such term below:

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ARTICLE II — THE MERGER; EFFECT OF THE MERGER ON THE COMPANY MEMBERSHIP UNITS

      Section 2.1. The Merger . Subject to the terms and conditions of this Agreement and in accordance with the NCLLCA, at the Effective Time, the Company and MergerCo shall consummate the Merger pursuant to which (a) MergerCo shall be merged with and into the Company and the separate corporate existence of MergerCo shall thereupon cease, (b) the Company shall be the surviving company in the Merger (the “ Surviving Company ”) and shall continue to be governed by the laws of the State of North Carolina and (c) the separate entity existence of the Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger. The Merger shall have the effects specified in the NCLLCA.

      Section 2.2. Effective Time . On the Closing Date, MergerCo and the Company shall duly execute the certificate of merger substantially in the form attached hereto as Exhibit A (the “ Certificate of Merger ”) and file such Certificate of Merger with the Administrator in accordance with the NCLLCA. The Merger shall become effective at such time as the Certificate of Merger, accompanied by payment of the filing fee (as provided in the NCLLCA), has been examined by, and received the endorsed approval of, the Administrator, or at such subsequent time as Parent and the Company shall agree and shall specify in the Certificate of Merger (the date and time the Merger becomes effective being the “ AEffective Time ”).

      Section 2.3. Articles of Organization and Operating Agreement . The articles of organization of MergerCo, as in effect immediately prior to the Effective Time, shall be amended

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as set forth on Exhibit B hereto and, as amended, shall be the articles of organization of the Surviving Company until thereafter amended as provided by law and by the terms of such articles of organization. The operating agreement of MergerCo, as in effect immediately prior to the Effective Time, shall be the operating agreement of the Surviving Company until thereafter amended as provided by law, by the terms of the articles of organization of the Surviving Company and by the terms of such operating agreement. Notwithstanding the foregoing, the name of the Surviving Company shall be “Nekton Research, LLC” and the articles of organization and operating agreement of the Surviving Company shall so provide.

      Section 2.4. Closing . The closing of the Merger (the “ Closing ”) shall occur as promptly as practicable (but in no event later than the third Business Day) after all of the conditions set forth in Article VIII shall have been satisfied or, if permissible, waived by the party entitled to the benefit of the same (other than those that by their terms are to be satisfied or waiver at the Closing), and, subject to the foregoing, shall take place at such time and on a date to be specified by the parties (the “ Closing Date ”). The Closing shall take place at the offices of Goodwin Procter LLP, Exchange Place, Boston, Massachusetts 02109, or at such other place as agreed to by the parties hereto.

      Section 2.5. Board Representatives and Officers . The members of the board of representatives of MergerCo and the officers of MergerCo immediately prior to the Effective Time shall be the initial members of the board of representatives of the Surviving Company and the officers of the Surviving Company, each to hold office in accordance with the articles of organization and operating agreement of the Surviving Company.

      Section 2.6. Effect on Company Membership Units . As of the Effective Time, by virtue of the Merger and without any action on the part of the holders of any Company Membership Units (each a “ Member ,” and collectively, the “ Members ”) or any holders of membership units of MergerCo:

          (a) Each Company Membership Unit (including, without limitation, Company Membership Units into which Phantom Equity Units are converted in accordance with Section 2.7 and the terms thereof) shall be converted automatically into and become the right to receive a portion of the Merger Consideration pursuant to and in accordance with the allocation of the Merger Consideration among the Members set forth on the Allocation Schedule attached hereto as Exhibit C (the “ Allocation Schedule ”) (which Allocation Schedule shall be amended from time to time to reflect the addition of any new Members to the Company and which final Allocation Schedule shall be delivered to Parent at least two Business Days prior to Closing). As of the Effective Time, all such Company Membership Units shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist.

          (b) All membership interests of MergerCo issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, shall be converted into 100% of the membership interests of the Surviving Company following the Merger.

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          (c) Each Company Membership Unit that is owned by the Company, by Parent or by MergerCo shall automatically be canceled and retired and shall cease to exist, and no cash or other consideration shall be delivered or deliverable in exchange therefor.

      Section 2.7. Treatment of Phantom Equity Units and Equity Plan . Immediately prior to the Effective Time, the Company shall take all necessary steps to terminate the Equity Plan. Pursuant to the terms of the Equity Plan, all Phantom Equity Units outstanding thereunder shall be converted to Class B Units and shall share in the Merger Consideration as Company Membership Units, as provided in Section 2.6 .

      Section 2.8. Company Actions . The Company represents and warrants to Parent and MergerCo that, at a meeting duly called and held prior to the date hereof, the Company Board has, upon the terms and subject to the conditions set forth herein: (a) unanimously determined that this Agreement is advisable, (b) unanimously determined that this Agreement and the transactions contemplated hereby are in the best interests of the Company and the Equityholders, (c) unanimously approved this Agreement and the transactions contemplated hereby and (d) unanimously resolved to recommend that the Members approve, authorize and adopt this Agreement and the transactions contemplated hereby in accordance with the provisions of applicable law, the Articles of Organization and the Operating Agreement.

ARTICLE III — PAYMENT FOR COMPANY MEMBERSHIP UNITS

      Section 3.1. Payment for Company Membership Units.

          (a) Parent shall make the following payments:

     (i) As soon as practicable following the date of this Agreement and in any event not less than five Business Days before the Closing Date, Parent shall appoint a national bank or trust company reasonably acceptable to the Company to act as paying agent (the “ Paying Agent ”) in the Merger. At the Effective Time, Parent shall deposit with the Paying Agent, for the benefit of the Equityholders immediately prior to the Effective Time, for payment through the Paying Agent in accordance with this Section 3.1 , cash in an amount (the “ Payment Fund ”) equal to the Aggregate Cash Consideration At Closing plus all interest and dividends thereon received by Paying Agent. The Payment Fund shall be invested as directed by the Members Representative in a tax-free interest bearing or dividend paying account. The Paying Agent shall, pursuant to irrevocable instructions, make the payments provided for in Sections 2.6 and 2.7 out of the Payment Fund. The Payment Fund shall not be used for any other purpose, except as provided in this Agreement. The Company shall prepare a schedule of the allocation of the Aggregate Cash Consideration At Closing payable to the Equityholders, as set forth on the Allocation Schedule. The parties hereto acknowledge and agree that the Company will amend the Allocation Schedule as of the Effective Time to (A) reflect

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any actual adjustments and allocation of the Merger Consideration required by Section 3.3(a)(ii) and (B) instruct the Paying Agent as to the portion of the Payment Fund payable as of the Effective Time to each of the Equityholders.

     (ii) At the Effective Time, Parent shall cause to be delivered to Paragon Commercial Bank (the “ Escrow Agent ”) an amount of cash equal to $1,200,000. The Escrow Amount shall be invested as directed by the Members Representative in a tax-free interest bearing or dividend paying account (the “ Escrow Amount ”). The Escrow Amount shall be governed by the terms of an escrow agreement to be entered into by and among Parent, the Members Representative and the Escrow Agent, such escrow agreement to be substantially in the form attached hereto as Exhibit D (the “ Escrow Agreement ”). For federal income tax purposes, any payment made by the Escrow Agent to the Equityholders shall be treated as deferred Merger Consideration and shall be subject to imputation of interest under Section 483 or Section 1274 of the Code. Any interest or other income earned on the Escrow Amount will be included in the gross income of Parent in accordance with Proposed Treasury Regulations under Section 468B(g) of the Code.

     (iii) Each Equityholder’s percentage interest in the Escrow Amount in the event any such amount (including any interest or other income earned thereon) may be ultimately released and distributed to the Equityholders is set forth on the Allocation Schedule. The parties hereto acknowledge and agree that the Company will amend the Allocation Schedule as of the Effective Time to reflect any actual adjustments and allocation of the Merger Consideration required in accordance with this Agreement.

          (b) To the extent permitted by applicable law, none of Parent, MergerCo, the Company, the Surviving Company, or the Paying Agent shall be liable to any Person in respect of any portion of the Aggregate Cash Consideration At Closing from the Payment Fund properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

          (c) Each of the Paying Agent, the Surviving Company and Parent shall be entitled to deduct and withhold from the portion of the Aggregate Cash Consideration At Closing attributable to any unit of Company Membership Units (including, without limitation, Company Membership Units into which Phantom Equity Units are converted in accordance with Section 2.7 and the terms thereof), or amounts otherwise payable pursuant to this Agreement to any holder thereof, such amounts as are required to be withheld with respect to the making of such payment under the Code, and the rules and regulations promulgated thereunder, or any provision of United States federal, state or local tax laws. To the extent that amounts are so withheld, such withheld amounts shall be (i) remitted by the Paying Agent, the Surviving Company and Parent, as the case may be, to the applicable Governmental Authority and (ii) treated for all purposes of this

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Agreement as having been paid to the holder thereof in respect of which such deduction and withholding was made.

          (d) The right to receive a portion of the Merger Consideration in accordance with the terms of this Article III shall be deemed to have been paid in full satisfaction of all rights pertaining to Company Membership Units (including, without limitation, Company Membership Units into which Phantom Equity Units are converted in accordance with Section 2.7 and the terms thereof), as applicable.

          (e) Promptly following the date that is 36 months after the Effective Time, Parent shall cause the Paying Agent to deliver to the Surviving Company all cash and other documents in its possession relating to the Merger, and the Paying Agent’s duties shall terminate. Any former Equityholders who have not complied with this Section 3.1 prior to the end of such 36 month period shall thereafter look only to the Surviving Company (subject to abandoned property, escheat or other similar laws) for payment of their claim for right to receive the Merger Consideration.

      Section 3.2. Payments at Closing for Indebtedness of the Company . As of the Closing Date, Parent and MergerCo shall provide sufficient funds to the Surviving Company to enable the Surviving Company to repay or assume any outstanding Indebtedness of the Company. Parent and MergerCo will cooperate in arranging for such repayment and shall take such reasonable actions as may be necessary to facilitate such repayment and to facilitate the release, in connection with such repayment, of any mortgage, pledge, lien, conditional sale agreement, security title, encumbrance or other charge (collectively, “ Encumbrances ”) securing such Indebtedness of the Company.

      Section 3.3. Working Capital Adjustment .

          (a) Preparation of Estimated Closing Balance Sheet; Estimated Net Working Capital .

     (i) The Company shall prepare in good faith and, at least five Business Days prior to the Closing Date, deliver to Parent (A) an estimated balance sheet of the Company, which shall be reasonably acceptable to Parent, as of the close of business on the day immediately prior to the Closing Date, reflecting thereon the Company’s best estimate of all balance sheet items of the Company (the “ Estimated Closing Balance Sheet ”) and (B) the Net Working Capital of the Company as of the close of business on the day immediately prior to the Closing Date based on the Estimated Closing Balance Sheet (“ Estimated Net Working Capital ”). The Estimated Closing Balance Sheet shall be prepared in accordance with GAAP, consistently applied (except no footnotes shall be required), and using the same GAAP accounting principles, practices, methodologies and policies, that were used to prepare the Base Balance Sheet.

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     (ii) The cash consideration to be paid by Parent at Closing shall be adjusted, dollar for dollar, down to the extent that the Estimated Net Working Capital is less than the Net Working Capital target of $180,000. The difference between the Estimated Net Working Capital and such Net Working Capital target, to the extent such difference is a negative number, is referred to as the “ Negative Estimated Net Working Capital Adjustment Amount .”

     (iii) The cash consideration to be paid by Parent at Closing shall be adjusted, dollar for dollar, up to the extent that the Estimated Net Working Capital is greater than the Net Working Capital target of $180,000. The difference between the Estimated Net Working Capital and such Net Working Capital target, to the extent such difference is a positive number, is referred to as the “ Positive Estimated Net Working Capital Adjustment Amount and together with the Negative Estimated Net Working Capital Adjustment Amount, the “ Estimated Net Working Capital Adjustment Amount .”

     (iv) As used in this Section 3.3 , the term “ Net Working Capital ” means, as of the date of determination, an amount equal to the difference at such time of (A) the sum of all Current Assets minus (B) the sum of all Current Liabilities.

          (b) Preparation of Final Closing Balance Sheet .

     (i) As promptly as practicable, but no later than 45 days after the Closing Date, Parent shall prepare and deliver to the Members Representative (A) a balance sheet of the Company as of the close of business on the day immediately prior to the Closing Date, reflecting thereon Parent’s best estimate of the same balance sheet items of the Company as included on the Estimated Closing Balance Sheet but adjusted to take into account the final balances as of the close of business on the day immediately prior to the Closing Date (the “ Closing Balance Sheet ”) and (B) the Net Working Capital of the Company based on the Closing Balance Sheet. The Closing Balance Sheet shall be prepared in accordance with GAAP and using the same GAAP accounting principles, practices, methodologies and policies that were used to prepare the Estimated Closing Balance Sheet.

     (ii) Unless the Members Representative delivers the Dispute Notice within 30 days after receipt of the Closing Balance Sheet, such Closing Balance Sheet shall be deemed the “ Final Closing Balance Sheet ,” shall be binding upon the Equityholders and Parent and shall not be subject to dispute or review. If the Members Representative disagrees with the Closing Balance Sheet, the Members Representative may, within 30 days after receipt thereof, notify Parent in writing (the “ Dispute Notice ”), which Dispute Notice shall provide reasonable detail of the

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nature of each disputed item on the Closing Balance Sheet, including all supporting documentation thereto, and the Members Representative shall be deemed to have agreed with all other items and amounts contained in the Closing Balance Sheet delivered pursuant to this Section 3.3(b) . Parent and the Members Representative shall first use commercially reasonable efforts to resolve such dispute between themselves and, if Parent and the Members Representative are able to resolve such dispute, the Closing Balance Sheet shall be revised to the extent necessary to reflect such resolution, shall be deemed the “ Final Closing Balance Sheet ” and shall be conclusive and binding upon the Equityholders and Parent and shall not be subject to dispute or review. If Parent and the Members Representative are unable to resolve the dispute within 15 days after receipt by Parent of the Dispute Notice, Parent and the Members Representative shall submit the dispute to a mutually acceptable independent accounting firm (the “ Accountants ”). The Accountants shall act as experts and not arbiters and shall determine only those items in dispute on the Closing Balance Sheet. Promptly, but no later than 30 days after engagement, the Accountants shall deliver a written report to Parent and the Members Representative as to the resolution of the disputed items, the resulting Closing Balance Sheet and the resulting calculation of Net Working Capital as of the Closing Date. The Closing Balance Sheet as determined by the Accountants shall be deemed the “ Final Closing Balance Sheet ,” shall be conclusive and binding upon the Equityholders and Parent and shall not be subject to dispute or review. The fees and expenses of the Accountants in connection with the resolution of disputes pursuant to this Section 3.3(b) shall be paid by (A) the Equityholders (from the Escrow Amount), if Parent’s calculation of the portion of the Closing Net Working Capital in dispute is closer to the Accountants’ determination than the Members Representative’s calculation thereof, (B) by Parent, if the reverse is true or (C) except as provided in clauses (A) or (B) above, equally by the Equityholders (from the Escrow Amount) and Parent. Parent and the Members Representative agree that they will, and agree to cause their respective representatives and independent accountants to cooperate and assist in the preparation of the Closing Balance Sheet and in the conduct of the audits and reviews referred to in this Section 3.3(b) , including, without limitation, the making available to the extent necessary of books, records, work papers and personnel.

     (iii) The Merger Consideration shall be adjusted, dollar for dollar, up or down, as appropriate, to the extent that the Net Working Capital set forth on the Final Closing Balance Sheet (the “ Closing Net Working Capital ”) is greater than or less than the Estimated Net Working Capital, as applicable. Within three Business Days following determination of the Closing Net Working Capital in accordance with Section 3.3(b)(ii) , (A) if the Closing Net Working Capital is less than the Estimated Net Working Capital, Parent and the Members Representative shall jointly direct the Escrow Agent to pay to Parent from the Escrow

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Amount an amount equal to the difference between such amounts and to deliver the balance amount, if any, to Parent and (B) if the Closing Net Working Capital is greater than the Estimated Net Working Capital, Parent shall deliver or cause to be delivered to the Paying Agent the lesser of (1) the amount equal to the Closing Net Working Capital minus the Estimated Net Working Capital and (2) the amount equal to $180,000 minus the Estimated Net Working Capital, and Parent shall cause the Paying Agent to distribute such amount to the Equityholders in accordance with the Allocation Schedule. The difference between the Closing Net Working Capital and the Estimated Net Working Capital, whether a positive or a negative number, is referred to as the “ Final Net Working Capital Adjustment Amount .”

           Section 3.4. Financial Additional Consideration .

          (a) Preparation of Financial Additional Consideration Calculation . As promptly as practicable, and in any event within 75 days following the end of each Measurement Period, Parent shall prepare and deliver to the Members Representative a calculation of Measurement Period Revenues for such Measurement Period.

          (b)  Disagreements .

     (i) The Members Representative may dispute any element of the calculation of the Measurement Period Revenues by notifying Parent of such disagreement in writing and setting forth in reasonable detail the particulars of such disagreement, within 20 days after its receipt of the calculation of such Measurement Period Revenues. In the event that the Members Representative does not provide such a notice of disagreement within such 20-day period, the Members Representative shall be deemed to have accepted the calculation of the Measurement Period Revenues delivered by Parent, which shall be final, binding and conclusive for all purposes hereunder.

     (ii) In the event any such notice of disagreement is provided on a timely basis, Parent and the Members Representative shall attempt, for a period of 15 days (or such longer period as they may mutually agree), to resolve any disagreements with respect to the calculation of the Measurement Period Revenues. If, at the end of such period, Parent and the Members Representative are unable to resolve such disagreements, then the Accountants shall resolve any remaining disagreements.

     (iii) The Accountants shall determine as promptly as practicable, but in any event within 30 days of the date on which such dispute is referred to the Accountants, whether such Measurement Period Revenues were properly calculated, and shall deliver to Parent and the Members Representative a written report setting forth its findings, which shall be final, conclusive and binding on Parent and the Equityholders.

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The fees and expenses of the Accountants in connection with its services under this Section 3.4(b) shall be paid (A) by Parent if the Accountants’ calculation of the Measurement Period Revenues is closer to the Members Representative’s calculation of the Measurement Period Revenues than as calculated by Parent, (B) by the Equityholders (from the Escrow Account) if the reverse is true or (C) otherwise equally by Parent and the Members Representative (from the Escrow Account).

     (iv) Each party shall, and shall cause its representatives to, cooperate with the other and provide timely access to information for purposes of resolving any dispute pursuant to this Section 3.4(b) , including without limitation, making available to the other parties such books, records, work papers, reports of Parent’s outside independent certified public accountants, and personnel, to the extent necessary. Parent covenants and agrees that during the Measurement Periods that the books and records of the Surviving Company shall be maintained in a manner that will allow Parent’s accounting firm to reasonably determine the Financial Additional Consideration pursuant to this Agreement.

          (c) Payment . For each Measurement Period pursuant to this Section 3.4 , Parent shall cause the Paying Agent to pay, no later than the latest of (i) 90 days after the end of such Measurement Period and (ii) 15 days after the final close of the fiscal year end audit for such Measurement Period in immediately available funds, an amount equal to:

     (i) in the case of the First Measurement Period, an amount equal to the product of (A) the amount by which the Measurement Period Revenues for the First Measurement Period exceeds $10,000,000, multiplied by (B) the numeral 0.5; provided , however , that, notwithstanding anything to the contrary set forth in this Agreement, in no event shall the amount payable under this Section 3.4(c)(i) exceed $1,000,000 in the aggregate; and

     (ii) in the case of the Second Measurement Period, an amount equal to the product of (A) the amount by which the Measurement Period Revenues for the Second Measurement Period exceeds $10,000,000, multiplied by (B) the numeral 0.25; provided , however , that, notwithstanding anything to the contrary set forth in this Agreement, in no event shall the amount payable under this Section 3.4(c)(ii) exceed $1,000,000 in the aggregate.

Parent shall cause the Paying Agent to distribute such amount to the Equityholders in accordance with the Allocation Schedule. Notwithstanding anything to the contrary in this Agreement, in no event shall the amount payable to the Equityholders pursuant to this Section 3.4 exceed $2,000,000 in the aggregate. The aggregate amount to which the Equityholders are entitled pursuant to this Section 3.4(c) is referred to herein as the “ Financial Additional Consideration .”

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          (d) Compliance with Operating Plan . Attached hereto as Exhibit E is the operating plan agreed by Parent and the Company (the “ Operating Plan ”), which sets forth the financial, personnel and other resources to be made available by Parent to the Surviving Company with respect to the achievement of the Measurement Period Revenues and the Milestones. In the case of any material and continuing failure by Parent to comply with the Operating Plan during and in respect of the First Measurement Period (of which such material and continuing failure Parent has received written notice specifying in reasonable detail the nature thereof), the Measurement Period Revenues for the First Measurement Period shall automatically be deemed to be $12,000,000, except as set forth in the Operating Plan. In the case of any material and continuing failure by Parent to comply with the Operating Plan during and in respect of the Second Measurement Period (of which such material and continuing failure Parent has received written notice specifying in reasonable detail the nature thereof), the Measurement Period Revenues for the Second Measurement Period shall automatically be deemed to be $14,000,000, except as set forth in the Operating Plan.

           Section 3.5. Business Additional Consideration .

          (a) If the Surviving Company achieves the First Milestone, as set forth in Schedule 3.5 , prior to the one-year anniversary of the Closing Date, Parent shall deliver or cause to be delivered to the Paying Agent, in immediately available funds, $2,500,000, which amount shall be delivered within 90 days after the determination (in accordance with this Section 3.5(a)) that the First Milestone has been achieved, and Parent shall cause the Paying Agent to distribute such amount to the Equityholders in accordance with the Allocation Schedule. If the Surviving Company achieves the Second Milestone, as set forth in Schedule 3.5 , prior to December 31, 2009, Parent shall deliver to the Paying Agent, in immediately available funds $500,000, which amount shall be delivered within 90 days after the determination (in accordance with this Section 3.5(a)) that the Second Milestone has been achieved, and Parent shall cause the Paying Agent to distribute such amount to the Equityholders in accordance with the Allocation Schedule. Any achievement of either Milestone shall be, and only shall be, determined by mutual agreement of Parent and the Members Representative, such agreement not to be withheld unreasonably. Notwithstanding anything to the contrary in this Agreement, in no event shall the amount payable pursuant to this Section 3.5 exceed $3,000,000 in the aggregate. The aggregate amount to which the Members are entitled pursuant to this Section 3.5 is referred to herein as the “ Business Additional Consideration .”

          (b) Compliance with Operating Plan . In the case of any material and continuing failure by Parent (of which such material and continuing failure Parent has received written notice specifying in reasonable detail the nature thereof) to comply with the Operating Plan, with respect to the Milestones, the Milestones shall automatically be deemed to have been achieved prior to their applicable deadlines.

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ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company hereby represents and warrants to Parent and MergerCo, that, except as set forth in the various Sections of the schedules to this Agreement (the “ Schedules ”) that correspond with the Sections of this Article IV , the statements contained in this Article IV are true and correct as of the date of this Agreement.

      Section 4.1. Existence; Good Standing; Authority .

          (a) The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of North Carolina. The Company has all requisite power and authority to own, operate and/or lease its properties and carry on its business in all material respects as currently conducted. As of the date of this Agreement, the Company is duly licensed or qualified to do business as a foreign corporation in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such licensure or qualification necessary except where a failure to qualify would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. The copies of the Operating Agreement and the Articles of Organization, each as in effect as of the date hereof and made available to Parent’s and MergerCo’s counsel, are complete and correct, and no amendments thereto are pending.

          (b) The Company has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement, the performance by the Company of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by the Company Board. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement by each of Parent and MergerCo, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in a proceeding at law or in equity).

      Section 4.2. Capitalization . As of the date of this Agreement, the issued and outstanding Company Membership Units consists of (a) 15,625,000 Class A Units and (b) 23,861,780 Class B Units. All of the issued and outstanding Company Membership Units have been duly authorized and validly issued, and are fully paid and nonassessable. Schedule 4.2 sets forth each holder of outstanding Company Membership Units and each holder of Phantom Equity Units. As of the date of this Agreement, except as set forth on Schedule 4.2 , there are no outstanding subscriptions, options, warrants, commitments, preemptive rights, deferred compensation rights, agreements, arrangements or commitments of any kind to which the Company is a party relating to the issuance, or outstanding securities convertible into or exercisable or exchangeable for, any Company Membership Units of any class or other equity interests of the Company. Except as set forth on Schedule 4.2 , there are no agreements to which the Company is a party with respect to the voting of and Company Membership Units or which restrict the transfer of any such Company Membership Units. Except as set forth on Schedule 4.2 ,

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there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any Company Membership Units, other equity interests or any other securities of the Company. The Allocation Schedule sets forth, and will set forth as of the Effective Time, the true and accurate allocation of the Merger Consideration among the Equityholders in accordance with the Articles of Organization, the Operating Agreement and any applicable Law. The distribution of the membership interests of Nekton Ventures, LLC, a North Carolina limited liability company, by the Company to the Equityholders on or around May 12, 2004 was done in accordance with the terms and provisions of the Operating Agreement.

      Section 4.3. Subsidiaries . The Company does not own, of record or beneficially, directly or indirectly, (a) with respect to any corporation, more than 50% of the total voting power of all classes of capital stock entitled to vote in the election of directors thereof and (b) with respect to any Person other than a corporation, at least a majority of any class of capital stock (however designated) entitled to vote in the election of the governing body, partners, managers or others that will control the management of such Person. Except as set forth on Schedule 4.3 , there are no corporations, partnerships, joint ventures, associations or other entities in which the Company owns, of record or beneficially, any other direct or indirect equity or other interest or right (contingent or otherwise) to acquire any of the same. The Company is not a member of any partnership nor is the Company a participant in any joint venture or similar arrangement.

      Section 4.4. No Conflict; Consents .

          (a) Subject to the adoption and approval of this Agreement by the Members, the execution and delivery by the Company of this Agreement, and the consummation by the Company of the transactions in accordance with the terms hereof, do not (i) violate, conflict with or result in a default (whether after the giving of notice, lapse of time or both) under, or give rise to a right of termination of, any contract, agreement, permit, license, authorization or obligation to which the Company is a party or by which the Company or any of its assets are bound, except for any such conflicts, violations, defaults and terminations that would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, (ii) conflict with, or result in, any violation of any provision of the Articles of Organization or the Operating Agreement; (iii) violate or result in a violation of, or constitute a default (whether after the giving of notice, lapse of time or both) under, any provision of any law, regulation or rule, or any order of, or any restriction imposed by, any court or other governmental agency applicable to the Company.

          (b) Except as set forth in Schedule 4.4 , no notice to, declaration or filing with, or consent or approval of any federal, state, local or foreign government, any governmental, regulatory or administrative authority, agency, bureau or commission or any court, tribunal or judicial or arbitral body (a “ Governmental Authority ”) or other third party is required by or with respect to the Company in connection with the execution and delivery by the Company of this Agreement, and the consummation by the Company of the transactions in accordance with the terms hereof, except for the filing of the Certificate of Merger with the Administrator and appropriate documents with the

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relevant authorities of other states in which the Company duly licensed or qualified to do business.

      Section 4.5. Financial Statements .

          (a) The Company has made available to Parent and MergerCo true and complete copies of the following financial statements, copies of which are attached hereto as Schedule 4.5 (collectively, the “ Financial Statements ”):

     (i) Reviewed balance sheet of the Company as of December 31, 2007 and the related reviewed statements of operations, members’ equity and cash flows of the Company for the year ended December 31, 2007; and

     (ii) Unreviewed balance sheet of the Company as of June 30, 2008 (the “ Base Balance Sheet ”) and the related unreviewed statements of operations, members’ equity and cash flows for the fiscal period then ended.

          (b) Subject to the absence of footnotes and year-end adjustments with respect to any unreviewed Financial Statements, the Financial Statements (i) have been prepared in accordance with GAAP consistently applied and (ii) present fairly in all material respects the financial condition, statements of operations, members’ equity and cash flows of the Company as of the dates and for the periods indicated therein.

          (c) Except as set forth on Schedule 4.5(c) , the Company maintains a system of “internal controls over financial reporting” (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurance (i) that transactions are executed and access to assets is permitted only in accordance with management’s general or specific authorization; (ii) that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, consistently applied, and to maintain asset accountability; and (iii) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of the Company’s assets.

          (d) The Company is not 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, 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 under the Exchange Act)), where the result, purpose or intended effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company’s financial statements.

          (e) Schedule 4.5(e) sets forth an unaudited projected balance sheet of the Company (the “ Projected Closing Balance Sheet ”) that the Company has delivered to Parent at least five days prior to the date of this Agreement. The Projected Closing

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Balance Sheet was prepared using categories, principles and policies consistent with those contained in the Base Balance Sheet and represents the Company’s reasonable good faith estimate of the Closing Balance Sheet, setting forth the estimated Closing Net Working Capital and Estimated Net Working Capital Adjustment Amount, if any, as of the close of business on the day immediately prior to the Closing Date.

      Section 4.6. Absence of Certain Changes . Except as set forth on Schedule 4.6 , from the date of the Base Balance Sheet to the date of this Agreement, the Company has operated only in the ordinary course of business consistent with past practices and there has not been (a) any change in the business, assets, liabilities, condition (financial or otherwise) or results of operations of the Company, except such changes that have not had or would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, (b) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, equity interests or property) in respect of, any of the Company’s equity interests or any purchase, redemption or other acquisition of any of the Company’s equity interests or any other securities of the Company or any options, warrants, calls or rights to acquire any such equity interests or other securities, (c) any split, combination or reclassification of any of the Company’s equity interests or any issuance or the authorization of any other securities in respect of, in lieu of or in substitution for equity interests or other securities of the Company, (d) any granting by the Company of (i) any loan or increase in compensation, perquisites or benefits or any bonus or award or (ii) any payment by the Company of any bonus, in each case to any current or former member of the Company Board, officer, employee, contractor or consultant of the Company, (e) any granting by the Company to any current or former member of the Company Board, officer, employee, contractor or consultant of the Company of any increase in severance, termination, change in control or similar compensation or benefits, (f) any entry by the Company into any amendment of or modification to or agreement to amend or modify (or announcement of an intention to amend or modify) or termination of (i) any employment, deferred compensation, severance, change in control, termination, employee benefit, loan, indemnification, retention, equity repurchase, equity option, consulting or similar agreement, commitment or obligation between the Company, on the one hand, and any current or former member of the Company Board or any current or former officer, employee, contractor or consultant of the Company, on the other hand, (ii) any agreement between the Company, on the one hand, and any current or former member of the Company Board or any current or former officer, employee, contractor or consultant of the Company, on the other hand, the benefits of which are contingent, or the terms of which are altered, upon the occurrence of transactions involving the Company of the nature contemplated by this Agreement or (iii) any trust or insurance contract or other agreement to fund or otherwise secure payment of any compensation or benefit to be provided to any current or former member of the Company Board or any current or former officer, employee, contractor or consultant of the Company, (g) any amendment to or modification of or agreement to amend or modify (or announcement of an intention to amend or modify) the Equity Plan, (h) any other granting by the Company of any awards or rights under the Equity Plan, (i) any damage, destruction or loss, whether or not covered by insurance, that individually or in the aggregate could reasonably be expected to have a Company Material Adverse Effect, (j) any change in financial or tax accounting methods, principles or practices by the Company, except insofar as may have been required by a change in GAAP or applicable Law, (k) any tax election that individually or in the aggregate could reasonably be expected to have a Company Material Adverse Effect or any tax attributes of the Company or any settlement or compromise of any

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income tax liability, (viii) any revaluation by the Company of any of its respective assets or (l) any licensing or other agreement with regard to the acquisition or disposition of any Company Intellectual Property Assets or rights thereto.

      Section 4.7. Litigation . Except as set forth on Schedule 4.7 , as of the date of this Agreement, there is no litigation, action, suit, proceeding, claim, arbitration or investigation pending or, to the Company’s knowledge, threatened in writing, against the Company. As of the date of this Agreement, the Company is not subject to any outstanding writ, order, judgment, injunction or decree of any Governmental Authority.

      Section 4.8. Taxes .

          (a) The Company has filed on a timely basis all Tax Returns required to be filed by it on or before the date hereof. Except as set forth on Schedule 4.8 , the Company has paid all Taxes owed (whether or not shown, or required to be shown, on Tax Returns) on or before the date hereof. The Company has withheld and paid all Taxes required to have been withheld and paid. All Tax Returns filed by the Company were complete and correct in all material respects, and such Tax Returns correctly reflected in all material respects the facts regarding the income, business, assets, operations, activities, status and other matters of the Company and any other information required to be shown thereon. The Company has not participated, within the meaning of Treasury Regulation Section 1.6011-4(b), in (i) any “reportable transaction” within the meaning of Section 6011 of the Code and the Treasury Regulations thereunder, (ii) any “confidential corporate tax shelter” within the meaning of Section 6111 of the Code and the Treasury Regulations thereunder, or (iii) any “potentially abusive tax shelter” within the meaning of Section 6112 of the Code and the Treasury Regulations thereunder. The Company has disclosed on its Tax Returns all positions taken therein that could give rise to a substantial understatement of Tax within the meaning of Section 6662 of the Code (or any similar provision of state, local or foreign Tax law). There are no Liens for Taxes upon any of the Company’s assets, other than Liens for ad valorem Taxes not yet due and payable, and there is no reasonable basis for the imposition of any such Liens.

          (b) Except as set forth in Schedule 4.8 , none of the Tax Returns filed by the Company or Taxes payable by the Company have been the subject of an audit, action, suit, proceeding, claim, examination, deficiency or assessment by any Governmental Authority, and no such audit, action, suit, proceeding, claim, examination, deficiency or assessment is currently pending or expected by the Company or any member, officer or employee responsible for Tax matters thereof.

          (c) The Company is not currently the beneficiary of any extension of time within which to file any Tax Return, and the Company has not waived any statute of limitation with respect to any Tax or agreed to any extension of time with respect to a Tax assessment or deficiency.

          (d) The Company has been taxed as a partnership for U.S. federal income tax purposes for all periods since the time of its formation, and the Company has never been a “publicly traded partnership” within the meaning of Section 7704 of the

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Code. Except for the Phantom Equity Units, no membership or other equity interest in the Company is subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code. Except for any payments to be made with respect to the Phantom Equity Units, no portion of the Merger Consideration is subject to the Tax withholding provisions of Section 3406 of the Code, or of Subchapter A of Chapter 3 of the Code or of any other provision of law.

          (e) Except as set forth on Schedule 4.8 , the Company is not a party to or member of any joint venture, partnership, limited liability company or other arrangement or contract which could be treated as a partnership for Tax purposes. The Company does not own an interest in real property. The Company has not made or agreed to make any adjustment under Section 481(a) of the Code (or any corresponding provision of state, local or foreign Tax law) by reason of a change in accounting method or otherwise, and will not be required to make such an adjustment as a result of the transactions contemplated by this Agreement. The Company does not own, directly or indirectly, any interests in an entity that is or has been a “passive foreign investment company” within the meaning of Section 1297 of the Code or a “controlled foreign corporation” within the meaning of Section 957 of the Code.

          (f) The Company is not a party to any Tax sharing agreement or similar arrangement (including, but not limited to, an indemnification agreement or arrangement with respect to Taxes). The Company has no liability for the Taxes of any other Person as a transferee or successor, or by contract, or otherwise.

          (g) The unpaid Taxes of the Company did not, as of the Balance Sheet Date, exceed the reserve for actual Taxes (as opposed to any reserve for deferred Taxes established to reflect timing differences between book and Tax income) as shown on the Balance Sheet, and will not exceed such reserve as adjusted for the passage of time through the Closing Date in accordance with the reasonable past custom and practices of the Company in filing Tax Returns. The Company will not incur any liability for Taxes from the Balance Sheet Date through the Closing Date other than in the ordinary course of business and consistent with reasonable past practices.

          (h) Schedule 4.8 hereto contains a list of all jurisdictions (whether foreign or domestic) to which any Tax is properly payable by the Company. No claim has ever been made by a Tax Authority in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to Tax in that jurisdiction. The Company does not have, nor has it ever had, a permanent establishment or other taxable presence in any foreign country, as determined pursuant to applicable foreign law and any applicable Tax treaty or convention between the United States and such foreign country.

          (i) Schedule 4.8 hereto lists all Tax Returns filed with respect to the Company for taxable periods ended on or after December 31, 2004. The Company has delivered or made available to Parent correct and complete copies of all income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by the Company since December 31, 2004.

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          (j) Since the Balance Sheet Date, except as reflected in Schedule 4.8 , there has not been any change in any method of Tax accounting or any making of a Tax election or change of an existing election by the Company.

          (k) Since the date of the Base Balance Sheet, the Company has not amended any Tax Return or changed or modified any method of reporting income, deductions or other items for Tax purposes.

      Section 4.9. Employee Benefit Plans .

          (a) Schedule 4.9(a) sets forth a list of every employee benefit plan, within the meaning of Section 3(3) of ERISA, program and arrangement currently maintained, sponsored or contributed to by the Company or any ERISA Affiliate for the benefit of any current or former employee, consultant or officer of the Company or any current or former member of the Company Board (the “ Benefit Plans ”). Except as set forth on Schedule 4.9(a) , (i) each Benefit Plan intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter from the IRS regarding its qualification thereunder and nothing has occurred since the date of such letter that would cause any such plan to no longer be so qualified, (ii) each Benefit Plan has been administered in all material respects in accordance with its terms, ERISA and the Code, (iii) no Benefit Plan is subject to Title IV of ERISA or Section 412 of the Code or is a “multiemployer plan,” as defined in Section 3(37) of ERISA, (iv) no Benefit Plan provides for post-employment life or health insurance benefits for any participant or any beneficiary of a participant, except as may be required by part 6 of Subtitle B of Title 1 of ERISA and (v) no “prohibited transaction” as defined in Section 406 of ERISA has occurred.