AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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ADC TELECOMMUNICATIONS, INC | FALCON VENTURE CORP | FIBER OPTIC NETWORK SOLUTIONS CORP

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Delaware Date: 7/25/2005
Industry: Communications Equipment Law Firm: Dorsey & Whitney LLP Sector: Technology

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

by and among

ADC TELECOMMUNICATIONS, INC.,

FALCON VENTURE CORP.,

FIBER OPTIC NETWORK SOLUTIONS CORP.,

and

MICHAEL J. NOONAN

JULY 21, 2005

TABLE OF CONTENTS

Article I The Merger

1.1	The Merger
1.2	Effect of Merger
1.3	Effective Time
1.4	Articles of Organization; Bylaws
1.5	Directors and Officers
1.6	Taking of Necessary Action; Further Action
1.7	The Closing

Article II Conversion of Securities

2.1	Conversion of Securities
2.2	Exchange of Certificates
2.3	Escrow
2.4	Adjustment of Shares
2.5	Merger Consideration

Article III Representations and Warranties of the Company

3.1	Incorporation; Corporate Power and Authority
3.2	Subsidiaries
3.3	Capitalization
3.4	Execution, Delivery; Valid and Binding Agreement
3.5	No Violations, etc.
3.6	Financial Statements
3.7	Absence of Undisclosed Liabilities
3.8	Absence of Certain Developments
3.9	Title to Properties
3.10	Accounts Receivable
3.11	Inventory
3.12	Tax Matters
3.13	Contracts and Commitments
3.14	Intellectual Property Rights
3.15	Litigation
3.16	Warranties
3.17	Employees
3.18	Employee Benefit Plans
3.19	Insurance
3.20	Affiliate Transactions
3.21	Customers and Supplier
3.22	Compliance with Laws; Permits
3.23	Environmental Matters
3.24	Bank Accounts
3.25	Vote Required

3.26	Anti-takeover Plan; State Takeover Statutes
3.27	Indemnification Obligations
3.28	Brokerage
3.29	No Other Representations

Article IV Representations and Warranties of Parent

4.1	Incorporation and Corporate Power
4.2	Execution, Delivery; Valid and Binding Agreement
4.3	No Violations, etc.
4.4	Litigation
4.5	Financing

Article V Conduct Prior to the Closing

5.1	Conduct of the Business
5.2	Access to Books and Records
5.3	Company Debt

Article VI Additional Agreements

6.1	Company Shareholders’ Meeting
6.2	Regulatory Filings
6.3	Bonus Pool
6.4	Conditions
6.5	No Negotiations
6.6	Notification of Certain Matters
6.7	Nonsolicitation
6.8	MJN Covenant Not to Compete
6.9	MJN Nonsolicitation
6.10	MJN Covenant Regarding Confidential Information
6.11	Acknowledgement/Equitable Relief

Article VII Conditions to Closing

7.1	Conditions to Obligations of Each Party to Effect the Merger
7.2	Additional Conditions to Parent’s Obligations
7.3	Additional Conditions to the Company’s Obligations

Article VIII Termination

8.1	Termination
8.2	Effect of Termination

Article IX Survival; Indemnification

9.1	Survival of Representations and Warranties
9.2	Indemnification by Shareholders

EXHIBITS

Exhibit A—Form of Voting Agreement
Exhibit B—Articles of Merger
Exhibit C—Form of Escrow Agreement

SCHEDULES

Schedule 2.5—Company Indebtedness
Schedule 7.2(l)—Required Agreements
Disclosure Schedule

iii

DEFINED TERMS

Aggregate Closing Price Per Certificate	2.2(a)
Agreement	Preamble
Annual Financial Statements	3.6(a)
Applicable Percentage	2.1(a). 2.1(a)(i)
Articles of Merger	1.3
Balance Sheet Date	3.7
Basket Amount	9.2(b)
Business	6.8(a)(i)
Cap	9.2(b)
Certificates	2.2(a)
Charter Documents	3.1(b)
Claim	9.5(a)
Closing	1.7
Closing Date	1.7
Closing Price Per Common Share	2.1(a)(iii)
Closing Price Per Series A Share	2.1(a)(ii)
Closing Price Per Series B Share	2.1(a)(i)
Common Price Per Share	2.1(a)(iii)
Company	Preamble
Company Board Recommendation	6.1(b)
Company Capital Stock	2.1
Company Common Stock	2.1(a)(iii)
Company Debt	2.5
Company Intellectual Property	3.14(a)
Company Shareholders’ Meeting	6.1(a)
Confidential Information	6.10(a). 3.14(g)
Confidentiality Agreement	5.2
Constituent Corporations	Preamble
Contracts	3.13
DOL	3.17(f)
Effective Date	1.3
Effective Time	1.3
Employee Outstanding Common	2.1(a). 2.1(a)(iii)
Environmental Costs	3.23(a)(i)
Environmental Laws	3.23(a)(ii)
ERISA	3.18(a)
Escrow Account	2.3
Escrow Agent	2.3
Escrow Agreement	2.3
Escrow Amount	2.3
Escrow Fund	2.3
Extended Reps	9.1
Fiber Distribution Panels, Frames and Cables Products	6.8(a)(iii)
Fiber-to-the-X Products	6.8(a)(ii)

Governing Documents	3.1(b)
Governmental Entity	3.5
Hazardous Materials	3.23(a)(iii)
Holder Indemnified Parties	9.3(a)
Holder Losses	9.3(a)
Holders	9.2(a)
HSR Act	3.5
include, includes and including	11.5
Indemnified Party	9.5
insiders	3.20
Intellectual Property	3.14(a)
IRS	3.18(c)
knowledge	11.5
Latest Balance Sheet	3.6(a)
Latest Financial Statements	3.6(a)
Leases	3.9(a)
List	3.23(a)(iv)
Losses	9.2(a)
Material Adverse Effect	3.1(a)
MBCA	Preamble
Merger	Preamble
Merger Consideration	2.5
Merger Sub	Preamble
Merger Sub Common Stock	2.1(c)
MJN	Preamble
Other Outstanding Common	2.1(a)
Outstanding Common	2.1(a)(iii)
Outstanding Series	2.1(a)(ii)
Outstanding Series B	2.1(a)(i)
Parent	Preamble
Parent Indemnified Parties	9.2(a)
Parent Losses	9.2(a)
Parent Representatives	5.2
Paying Agent	2.2(a)
Per Share Common Escrow Amount	2.1(a)(iii)
Per Share Series A Escrow Amount	2.1(a)(ii)
Per Share Series B Escrow Amount	2.1(a)(i)
Permits	3.22(b)
Permitted Liens	3.8(b)
Person	11.5
Plan	3.18(a)
Property	3.23(a)(v)
Real Property	3.9(a)
Regulatory Action	3.23(a)(vi)
Related Documents	9.2(a)
Release	3.23(a)(vii)

Required Shareholder Vote	3.4
Returns	3.12(a)
SEC	3.6(c)
Series A Base Liquidation Preference	2.1(a)(ii)
Series A Participation Amount	2.1(a)(ii)
Series A Preferred Stock	2.1(a)(ii)
Series A Price Per Share	2.1(a)(ii)
Series B Base Liquidation Preference	2.1(a)(i)
Series B Participation Amount	2.1(a)(i)
Series B Preferred Stock	2.1(a)(i)
Series B Price Per Share	2.1(a)(i)
Shareholders’ Representative	9.7(a)
Subsidiaries	3.2
Subsidiary	3.2
Surviving Corporation	1.1
Survivor	1.1
Tax	3.12(t)
Tax Affiliate	3.12(a)
Tax Affiliates	3.12(a)
Taxes	3.12(t)
Third Party Expenses	11.2
Third Party Intellectual Property Rights	3.14(b)
Third-Party Environmental Claim	3.23(a)(viii)
USCIS	3.17(f)
Voting Agreement	Preamble
Work Permits	3.17(f)

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated July 21, 2005, is made and entered into by and among ADC Telecommunications, Inc., a Minnesota corporation (“ Parent ”), Falcon Venture Corp., a Massachusetts corporation and wholly owned subsidiary of Parent (“ Merger Sub ”), Fiber Optic Network Solutions Corp., a Massachusetts corporation (the “ Company ”) and Michael J. Noonan, an individual resident of the Commonwealth of Massachusetts (“ MJN ”). Merger Sub and the Company are sometimes collectively referred to as the “ Constituent Corporations .”

WITNESSETH:

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

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

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

NOW, THEREFORE , in consideration of the representations, warranties, covenants and agreements set forth in this Agreement and in the Articles of Merger (as defined in Section 1.3 hereof), the parties hereto, intending to be legally bound, agree as follows:

Article I
The Merger

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

1.2 Effect of Merger . At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Articles of Merger and Section 11.07 of the MBCA. Without limiting the generality of the foregoing, the Surviving Corporation shall succeed to and possess all the properties, rights, privileges, immunities, powers, franchises and purposes, and be subject

to all the duties, liabilities, debts, obligations, restrictions and disabilities, of the Constituent Corporations, all without further act or deed.

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

1.4 Articles of Organization; Bylaws . From and after the Effective Time and until further amended in accordance with applicable law, the Articles of Organization of the Merger Sub, as in effect immediately prior to the Effective Time, shall be the Articles of Organization of the Surviving Corporation, as amended as set forth in an exhibit to the Articles of Merger. From and after the Effective Time and until further amended in accordance with law, the Bylaws of Merger Sub as in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation.

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

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

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

as is mutually agreeable to Parent and the Company (the “ Closing Date ”). The Closing will be effective as of the Effective Time.

Article II
Conversion of Securities

2.1 Conversion of Securities . At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company, or the holder of any shares of Series B Preferred Stock, Series A Preferred Stock or Company Common Stock (all as hereinafter defined and, collectively, the “ Company Capital Stock ,”) the following shall occur in the following order and priority:

(a) At the Effective Time:

(i) each share of Series B redeemable, convertible preferred stock, par value $0.01 per share, of the Company (the “ Series B Preferred Stock ”) issued and outstanding immediately prior to the Effective Time (other than any shares of Series B Preferred Stock to be canceled pursuant to Section 2.1(b)) (the “ Outstanding Series B ”) will be canceled and extinguished and be converted automatically into the right to receive an amount (the “ Series B Price Per Share ”) equal to the sum of (i) Five Dollars and 4375/10000 ($5.4375) (the “ Series B Base Liquidation Preference ”), plus (ii) the “ Series B Participation Amount ,” as defined below, if any, of which an amount equal to the product of (X) the Series B Price Per Share, times (Y) the “ Applicable Percentage ,” as defined below, will be delivered to the Escrow Agent pursuant to Section 2.3 (such amount referred to herein as the “ Per Share Series B Escrow Amount ,” and the difference between the Series B Price Per Share and the Per Share Series B Escrow Amount is referred to herein as the “ Closing Price Per Series B Share ”);

(ii) each share of Series A convertible preferred stock, par value $0.01 per share, of the Company (the “ Series A Preferred Stock ”) issued and outstanding immediately prior to the Effective Time (other than any shares of Series A Preferred Stock to be canceled pursuant to Section 2.1(b)) (the “ Outstanding Series A ”) will be canceled and extinguished and be converted automatically into the right to receive an amount (the “ Series A Price Per Share ”) equal to the sum of (i) Twelve Dollars ($12.00) (the “ Series A Base Liquidation Preference ”), plus (ii) the Series A Participation Amount , as defined below, if any, of which an amount equal to the product of (X) the Series A Price Per Share, times (Y) the Applicable Percentage will be delivered to the Escrow Agent pursuant to Section 2.3 (such amount referred to herein as the “ Per Share Series A Escrow Amount ,” and the difference between the Series A Price Per Share and the Per Share Series A Escrow Amount is referred to herein as the “ Closing Price Per Series A Share ”); and

(iii) each share of common stock, no par value per share, of the Company (the “ Company Common Stock ”) issued and outstanding immediately prior to the Effective Time (other than any shares of Company Common Stock to be canceled pursuant to Section 2.1(b)) (the “ Outstanding Common ”) will be canceled and extinguished and be converted automatically into the right to receive an amount (the “ Common Price Per

Share ”), equal to the result of (i) the excess, if any, of the Merger Consideration over the aggregate of the Series B Base Liquidation Preference and the Series A Base Liquidation Preference payable to the holders of the Outstanding Series B and the Outstanding Series A, respectively, divided by (ii) the sum of (a) the number of shares of Outstanding Common, (b) the number of shares of Outstanding Series B, and (c) an amount equal to the product of five times the number of shares of Outstanding Series A; provided that, an amount equal to the product of (X) the Common Price Per Share, times (Y) the Applicable Percentage, as defined below, will be delivered to the Escrow Agent pursuant to Section 2.3 (such amount referred to herein as the “ Per Share Common Escrow Amount ,” and the difference between the Common Price Per Share and the Per Share Common Escrow Amount is referred to herein as the “ Closing Price Per Common Share ”). In implementation of the foregoing calculation, each of the holders of “ Employee Outstanding Common ,” defined below, shall be entitled to receive, with respect to each share of Employee Outstanding Common, the Common Price Per Share at the Effective Time without deduction for any payment to the Escrow Agent.

For the purposes of this Section 2.1, the following terms shall have the following meanings: The Series B Participation Amount and the Series A Participation Amount shall be an amount equal to: (A) in the case of the Series B Participation Amount, the Common Price Per Share, and (B) in the case of the Series A Participation Amount, the product of five times the Common Price Per Share. “ Employee Outstanding Common ” shall mean Outstanding Common issued in January and/or March of 2005 pursuant to the Company’s 2000 Stock Award and Option Plan, as amended and restated, to Persons who were employees of the Company when such shares were issued. “ Other Outstanding Common ” shall mean Outstanding Common which is not Employee Outstanding Common. “ Applicable Percentage ” means the result, expressed as a percentage to two decimal points, of $34,000,000, divided by the sum of the aggregate of the Merger Consideration payable to (i) the holders of the Outstanding Series B, (ii) the holders of the Outstanding Series A, and (iii) the holders of Other Outstanding Common.

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

(c) At the Effective Time, each share of common stock, $0.01 par value, of Merger Sub (“ Merger Sub Common Stock ”) issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock, no par value, of the Surviving Corporation, and the Surviving Corporation shall be a wholly owned subsidiary of Parent. Each stock certificate of Merger Sub evidencing ownership of any such shares shall continue to evidence ownership of such shares of capital stock of the Surviving Corporation.

2.2 Exchange of Certificates .

(a) Prior to the Effective Time, the Company shall cause to be mailed or delivered to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding shares of Company Capital Stock (the “ Certificates ”) (i) a letter of

transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Parent, and passage of the Effective Time, and shall be in such form and have such other provisions as Parent may reasonably specify and which shall be reasonably acceptable to the Company) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Closing Price Per Series A Share, the Closing Price Per Series B Share, Closing Price Per Common Share or the Common Price Per Share, as appropriate; provided, however, that in the event that such executed documents and Certificates are received prior to the Effective Time, such documents and Certificates shall be held in escrow by the Parent or its designee, acting as paying agent (the “ Paying Agent ”), until the Effective Time. Upon delivery by the Paying Agent to Parent (in the event that Parent is not the Paying Agent) of such Certificates for cancellation, together with such letter of transmittal, duly completed and validly executed, and such other documents as may be reasonably required pursuant to such instructions, the holder of such Certificate shall be entitled to receive, and shall promptly receive, cash in an amount equal to the number of shares of Company Capital Stock represented by such certificate multiplied by the Closing Price Per Series A Share, the Closing Price Per Series B Share, Closing Price Per Common Share or the Common Price Per Share, as appropriate (the “ Aggregate Closing Price Per Certificate ”), and the Certificate so surrendered shall forthwith be canceled by Company. Until surrendered as contemplated by this Section 2.2, each Certificate that, prior to the Effective Time, represented shares of Company Capital Stock will be deemed from and after the Effective Time, to evidence the right only to receive the Aggregate Closing Price Per Certificate for the shares of Company Capital Stock represented thereby without interest.

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

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

(d) If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact, in form and substance reasonably acceptable to Parent, by the person claiming such Certificate to be lost, stolen or destroyed, and complying with such other conditions as Parent may reasonably impose (including the execution of an indemnification undertaking in favor of Parent with respect to the Certificate alleged to be lost, stolen or destroyed), will deliver to such person, the Aggregate Closing Price Per Certificate as may be required pursuant to Section 2.1.

2.3 Escrow . An amount equal to $34,000,000 (the “ Escrow Amount ”) will be deposited by Parent with U.S. Bank National Association, as escrow agent (the “ Escrow Agent ”), to be held in escrow (the “ Escrow Fund ”) in an account (the “ Escrow Account ”) pursuant to the terms of the Escrow Agreement (the “ Escrow Agreement ”) among Parent, the Shareholders’ Representative and the Escrow Agent in the form of Exhibit C . The Escrow Amount shall

initially be equal to the sum of (i) the Per Share Series A Escrow Amount multiplied by the number of issued and outstanding shares of Series A Preferred Stock immediately prior to the Effective Time, (ii) the Per Share Series B Escrow Amount multiplied by the number of issued and outstanding shares of Series B Preferred Stock immediately prior to the Effective Time, and (iii) the Per Share Common Escrow Amount multiplied by the number of issued and outstanding shares of Other Outstanding Common immediately prior to the Effective Time. Distributions of any amounts from the Escrow Account shall be governed by the terms and conditions of the Escrow Agreement.

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

2.5 Merger Consideration . Notwithstanding anything to the contrary contained in this Agreement, the aggregate value delivered by Parent in exchange for the Company Capital Stock (the “ Merger Consideration ”) shall equal $161,500,000, plus (x) the value of all cash and cash equivalents held by the Company as of the Effective Date, up to a maximum of $1,000,000, less (y) the amount of any Company Debt that has not been discharged prior to the Effective Date. “ Company Debt ” means, whether or not reflected on the Latest Balance Sheet, all indebtedness or guarantees of indebtedness for borrowed money of the Company and/or the Subsidiaries owed to financial institutions, the holders of Company Capital Stock, or other Persons, including, but not limited to, the indebtedness listed on Schedule 2.5, the aggregate amount of all outstanding principal, and any unpaid fees and expenses, premiums, penalties or other amounts (including losses, costs, penalties and expenses, if any, of lenders relating to the foregoing items arising from the payment or prepayment of such items) payable in connection with the payment or repayment prior to or after the Closing of any of the foregoing.

Article III
Representations and Warranties of the Company

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

3.1 Incorporation; Corporate Power and Autho rity .

(a) Each of the Company and the Subsidiaries is a corporation duly organized, validly existing, duly registered (if applicable) and in good standing under the laws of the jurisdiction of its organization and has all requisite corporate power and authority and all material authorizations, licenses, permits and certifications necessary to carry on its business as now being conducted and presently proposed to be conducted and to own, lease and operate its assets. The Company and each of the Subsidiaries is duly qualified as a foreign corporation to do

business in every jurisdiction in which the nature of its business or its ownership of property requires it to be so qualified, except for those jurisdictions in which the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect (as defined below). Section 3.1 of the Disclosure Schedule sets forth a true and complete list, by corporation, of all jurisdictions in which the Company and each of the Subsidiaries is qualified and in good standing, if applicable. As used herein, the term “ Material Adverse Effect ” means any change, effect, event or condition that (i) has had or would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, assets (including intangible assets), results of operations, condition (financial or otherwise), or customer relations of the Company and its Subsidiaries, taken as a whole, or on the ability of the Company and its Subsidiaries, taken as a whole, to achieve the Company’s business plan as such plan has been presented to Parent other than (A) any such change, effect, event or condition that results or arises from changes or conditions affecting the industry in which the Company markets its products and services generally, except to the extent such changes or conditions disproportionately, in any material respect, affect the Company and the Subsidiaries, taken as a whole, or (B) any such change, effect, event or condition that results or arises from changes in general economic, regulatory or political conditions (including armed hostilities or terrorist actions), except to the extent such changes or conditions disproportionately, in any material respect, affect (relative to other participants in the industry in which the Company markets its products and services) the Company and the Subsidiaries, taken as a whole, or (C) any such change, effect, event or condition that results or arises solely from the announcement of this Agreement and the transactions contemplated hereby or the consummation of the transactions contemplated hereby and that would not have resulted or arisen in the absence of such announcement (excluding, from this subsection (C), all changes, effects, events or conditions that existed prior to the date hereof), or (ii) would prevent or materially delay the Company’s ability to consummate the Merger or the other transactions contemplated hereby.

(b) Neither the Company nor any Subsidiary is in violation of any of the provisions of its Articles of Organization or other applicable charter document (any such document hereinafter referred to as its “ Charter Documents ”) or Bylaws or other applicable governing document (any such documents hereinafter referred to as its “ Governing Documents ”). The Company has delivered to Parent accurate and complete copies of the respective Charter Documents and Governing Documents, as currently in effect of each of the Company and the Subsidiaries.

3.2 Subsidiaries . The Company is the record and beneficial owner of the outstanding shares of capital stock of each of the entities listed (and in the amount and ownership percentage shown) in Section 3.2 of the Disclosure Schedule (each, a “ Subsidiary ” and together, the “ Subsidiaries ”). Except as disclosed in Section 3.2 of the Disclosure Schedule, neither the Company nor any of its Subsidiaries owns, controls or holds with the power to vote, directly or indirectly, of record, beneficially or otherwise, any capital stock or any equity or ownership interests in any corporation, partnership, association, joint venture or other entity, except for the Subsidiaries. There are no proxies with respect to the shares of the Subsidiaries, and no equity securities of any Subsidiary are or may be required to be issued by reason of any options, warrants, scrip, rights to subscribe for, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of any capital stock of any such Subsidiary, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is bound to issue, transfer or sell any

shares of such capital stock or securities convertible into or exchangeable for such shares. Other than as set forth in Section 3.2 of the Disclosure Schedule, all of such shares so owned by the Company are duly authorized, validly issued, fully paid and nonassessable and are owned by it free and clear of any Lien with respect thereto.

3.3 Capitalization .

(a) The authorized capital stock of the Company consists of: 1,578,125 shares of Series A Preferred Stock, of which 1,057,292 shares are issued and outstanding; 8,045,977 shares of Series B Preferred Stock, of which 5,747,126 shares are issued and outstanding; and 45,483,661 shares of Company Common Stock, of which 27,686,841 shares are issued and outstanding. The issued and outstanding shares of Company Capital Stock are duly authorized, validly issued, fully paid and nonassessable, and are free of preemptive rights or any other third party rights. All issued and outstanding shares of Company Capital Stock have been offered, sold and delivered by the Company in compliance with applicable securities and corporate laws. No shares of the Company Capital Stock have been issued in violation of any preemptive rights, rights of first refusal or similar rights. The rights and privileges of each class of Company Capital Stock are set forth in the Company’s Articles of Organization.

(b) Except as disclosed in Section 3.3(b) of the Disclosure Schedule, there is no option, warrant, call, subscription, convertible security, right (including preemptive right) or Contract of any character to which the Company is a party or by which it is bound obligating the Company to issue, exchange, transfer, sell, repurchase, redeem or otherwise acquire any capital stock of the Company or obligating the Company to grant, extend, accelerate the vesting of or enter into any such option, warrant, call, subscription, convertible security, right or Contract. There are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Company. Except as contemplated by this Agreement, there are no registration rights agreements, no voting trust, proxy or other Contract and no restrictions on transfer with respect to any capital stock of the Company. The share registers and the transfer of shares of the Company, copies of which have been made available to Parent prior to the date hereof, are up-to-date, complete and correct.

3.4 Execution, Delivery; Valid and Binding A greement . The Company has all requisite corporate power and authority to execute and deliver, and perform its obligations under, this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action and, other than (i) the approval and adoption of this Agreement and the Merger by the holders of Company Capital Stock in accordance with the Company’s Charter Documents, and (ii) the approval of the Merger in accordance with the requirements of the MBCA (the “ Required Shareholder Vote ”), no other corporate proceedings on the Company’s part are necessary to authorize the execution, delivery or performance of this Agreement. This Agreement has been duly and validly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, and the other documents contemplated hereby, when executed and delivered by the Company, will constitute the valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, in each case except to the extent

that their enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

3.5 No Violations, etc . The execution, delivery and performance of this Agreement by the Company does not and the consummation of the transactions contemplated hereby will not: (a) contravene any provision of the Articles of Organization or Bylaws of the Company; (b) violate or conflict in any material respect with any federal, state, local or foreign law or any decree, writ, injunction, judgment or order of any court or administrative or other governmental body or of any arbitration award which is either applicable to, binding upon or enforceable against the Company or any of the Subsidiaries, or the business or any assets of the Company or any of the Subsidiaries; (c) assuming the consents referred to in subsection (e) of this Section 3.5 are obtained, conflict with, or result in any breach of any of the provisions of, or constitute a default (or any event which would, with the passage of time or the giving of notice or both, constitute a default) under, result in a violation of, result in the creation of a right of termination, amendment, modification, abandonment or acceleration under any material agreement, including any material indenture, hypothecation, mortgage, lease, license, loan agreement or other material agreement or instrument which is either binding upon or enforceable against the Company or any of the Subsidiaries; (d) result in the creation of any material Lien (other than Permitted Liens) upon the Company or any of the Subsidiaries or any of the assets of the Company or any of the Subsidiaries; or (e) require any authorization, consent, approval, exemption or other action by or notice to any means any federal, state, local, foreign, international or multinational entity or authority exercising executive, legislative, judicial, regulatory, administrative or taxing functions of or pertaining to government (each, a “ Governmental Entity ”) or any other third party, other than (i) in connection with the applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder (the “ HSR Act ”), and any other comparable foreign merger or competition laws listed in Section 3.5 of the Disclosure Schedule, (ii) such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable federal or state securities laws, and (iii) consents set forth in Section 3.5 of the Disclosure Schedule (which the Company undertakes to use its commercially reasonable efforts to obtain prior to the Closing Date).

3.6 Financial Statements .

(a) The Company has delivered to Parent true and complete copies of (i) the audited consolidated balance sheet, as of February 28, 2005, of the Company and the audited consolidated statements of income and cash flows of the Company for the years ended February 29, 2004 and February 28, 2005 (collectively, the “ Annual Financial Statements ”), and (ii) the unaudited consolidated balance sheet, as of May 31, 2005, of the Company (the “ Latest Balance Sheet ”) and the unaudited consolidated statements of income and cash flows of the Company for the two-month period ended May 31, 2005 (such unaudited statements and the Latest Balance Sheet being herein referred to as the “ Latest Financial Statements ”).

(b) The Annual Financial Statements and the Latest Financial Statements are based upon the information contained in the books and records of the Company and fairly present in all material respects the financial condition of the Company and the Subsidiaries as of the dates thereof and results of operations for the periods referred to therein. The Annual Financial

Statements have been prepared in accordance with GAAP. The Latest Financial Statements have been prepared on a basis consistent with the Annual Financial Statements and in accordance with GAAP applicable to unaudited interim financial statements (and thus may not contain all notes and may not contain prior period comparative data which are required to be prepared in accordance with GAAP), and reflect all adjustments necessary to a fair statement of the results for the interim period(s) presented (except for normally recurring year-end adjustments).

(c) Section 3.6(c) of the Disclosure Schedule lists, and the Company has delivered to Parent copies of the documentation creating or governing, all securitization transactions and “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K adopted by the Securities and Exchange Commission (the “ SEC ”)) effected by the Company or the Subsidiaries since March 1, 2004.

(d) To the Company’s knowledge, there are no significant deficiencies or material weaknesses existing in the design or operation of the internal controls over financial reporting of the Company and the Subsidiaries that adversely affect the Company’s or the Subsidiaries’ ability to record, process, summarize and report to management or the Company’s Board of Directors material financial information relating to the Company or the Subsidiaries. Since March 1, 2004, no fraud, whether or not material, that involves management or other employees who have a significant role in the preparation of financial reports of the Company and the Subsidiaries, as a whole, has been disclosed to the Company’s auditors, Board of Directors or executive management.

3.7 Absence of Undisclosed Liabilities . Neither the Company nor any Subsidiary has any material liabilities (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due, whether known or unknown, and regardless of when asserted) including any such liabilities under any material guarantee, support, indemnification, assumption or endorsement of, or any similar commitment with respect to the obligations, liabilities (contingent or otherwise) or indebtedness of any person, arising out of transactions or events heretofore entered into, or any action or inaction, or any state of facts existing, with respect to or based upon transactions or events heretofore occurring, except (a) as reflected in the Latest Balance Sheet, (b) liabilities which have arisen after the date of the Latest Balance Sheet (the “ Balance Sheet Date ”) in the ordinary course of business (none of which is a material uninsured liability for breach of contract, breach of warranty, tort, or infringement), or (c) as otherwise set forth in the Disclosure Schedule.

3.8 Absence of Certain Developments . Since the Balance Sheet Date, there has been no change in the Company or any Subsidiary which change has had or would be reasonably expected to have had, a Material Adverse Effect, and neither the Company nor any Subsidiary has:

(a) borrowed any amount (including advances on existing credit facilities) or incurred or become subject to any liability in excess of $500,000 individually, or $1,000,000 in the aggregate, except (i) current liabilities incurred in the ordinary course of business; (ii) liabilities under contracts entered into in the ordinary course of business; and (iii) short term borrowings under existing credit facilities that will be repaid in full on or prior to the Closing.

(b) hypothecated, mortgaged, pledged or subjected to any Lien, any of its assets with a fair market value in excess of $500,000 individually, or $1,000,000 in the aggregate, except (i) Liens for current property taxes not yet due and payable, (ii) Liens imposed by law and incurred in the ordinary course of business for obligations not yet due to carriers, warehousemen, laborers, materialmen and the like, (iii) Liens in respect of pledges or deposits under workers’ compensation laws, (iv) statutory landlords’ Liens under leases to which the Company or any Subsidiary is a party, (v) zoning restrictions, easements, rights of way, licenses and restrictions on the use of Real Property or minor irregularities in title thereto, which do not materially impair the use of such property in the normal operation of the business of the Company; (vi) Liens that do not materially impair the use, operation, value or marketability of the asset or property to which it relates, (vii) statutory or common law Liens (such as rights of setoff) on deposit accounts of the Company or any Subsidiary; (viii) Liens arising out of or created by this Agreement or the transactions contemplated hereby, or (ix) Liens set forth under the caption referencing this Section 3.8 in the Disclosure Schedule (collectively, the “ Permitted Liens ”);

(c) discharged or satisfied any Lien or paid any liability, in each case with a value in excess of $100,000 individually, or $250,000 in the aggregate, other than current liabilities paid in the ordinary course of business;

(d) sold, assigned or transferred (including, without limitation, transfers to any employees, affiliates or stockholders) any tangible assets of its business except sales of inventory in the ordinary course of business, or canceled any debts or claims except in the ordinary course of business;

(e) sold, assigned, transferred or granted (including, without limitation, transfers to any employees, affiliates or stockholders) any licenses, patents, trademarks, trade names, domain names, copyrights, trade secrets or other intangible assets, other than licenses granted on normal commercial terms and on a non-exclusive basis in conjunction with the sale of product in the ordinary course of business;

(f) disclosed, to any Person other than Parent and authorized representatives of Parent, any material proprietary confidential information, other than pursuant to a confidentiality agreement limiting the use or further disclosure of such information, which agreement is identified in the Disclosure Schedule under the caption referencing this Section 3.8 and is in full force and effect on the date hereof;

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

(h) issued, sold or transferred any of its equity securities, securities convertible into or exchangeable for its equity securities or warrants, options or other rights to acquire its equity securities, or any bonds or debt securities;

(i) to the knowledge of the Company, entered into any transaction with any “insider” (as defined in Section 3.20 hereof) other than employment and other arrangements otherwise

disclosed in this Agreement and the Disclosure Schedule, or the transactions contemplated by this Agreement;

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

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

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

(m) made any capital expenditure or commitment therefor in excess of $250,000 individually, or $500,000 in the aggregate;

(n) made any loans or advances to, or guarantees for the benefit of, any Persons;

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

(p) made any material charitable contributions or pledges; or

(q) made any change in accounting principles or practices from those utilized in the preparation of the Annual Financial Statements.

3.9 Title to Properties .

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

(b) The Leases are in full force and effect and the Company and each Subsidiary, as applicable, holds a valid and existing leasehold interest under each of the respective Leases for the term set forth under caption referencing this Section 3.9 in the Disclosure Schedule. The Company has made available to Parent complete and accurate copies of each of its Leases, and none of the Leases has been modified in any material respect, except to the extent that such modifications are disclosed by the copies delivered to the Company. Neither the Company nor any Subsidiary is in default in any material respect and to the knowledge of the Company no circumstances exist which, if unremedied, would, either with or without notice or the passage of

time or both, result in such default under any of the Leases; nor, to the knowledge of the Company, is any other party to any of the Leases in default in any material respect thereunder.

(c) The Company or one of the Subsidiaries owns good and valid title to each of the material tangible properties and material tangible assets reflected on the Latest Balance Sheet or acquired since the date thereof, free and clear of all Liens, except for (i) Liens for current Taxes not yet due and payable, (ii) the Real Property subject to the Leases, (iii) personal property used by the Company and subject to lease, all of which leases are identified in the Disclosure Schedule under the caption referencing this Section 3.9, and (iv) assets disposed of since the Balance Sheet Date in the ordinary course of business.

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

(e) Neither the Company nor any Subsidiary is in violation in any material respect of any applicable zoning ordinance or other law, regulation or requirement relating to the operation of any properties used in the operation of its business, and neither the Company nor any Subsidiary has received any notice of any such violation, or notice of the existence of any threatened or actual condemnation proceeding with respect to any of the Real Property, except, in each case, with respect to violations the potential consequences of which do not or are not reasonably likely, individually or in the aggregate, to have a Material Adverse Effect.

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

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

3.11 Inventory . The Company’s and each Subsidiary’s inventory of raw materials, work in process and finished products relating to its business consists of items in all material respects of a quality and quantity usable and, with respect to finished products only, salable in the ordinary course of its business, in each case net of reserves for excess or obsolete inventory set forth in the Latest Financial Statements.

3.12 Tax Matters .

(a) Each of the Company and the Subsidiaries, as the case may be (each, a “ Tax Affiliate ” and, collectively, the “ Tax Affiliates ”), has: (i) timely filed (or has had timely filed on its behalf) all material returns, declarations, reports, estimates, information returns, and

statements (“ Returns ”) required to be filed or sent by it in respect of any Taxes due or payable on or prior to the date hereof or required to be filed or sent by it by any taxing authority having jurisdiction, which Returns are true and correct in all material respects and have been completed in accordance with applicable law; (ii) timely and properly paid (or has had paid on its behalf) all Taxes due and payable with respect to such Returns and/or the periods to which such Returns pertain; and (iii) complied in all material respects with all applicable laws relating to the withholding of Taxes and the payment thereof (including, without limitation, withholding of Taxes under Sections 1441 and 1442 of the Code, or similar provisions under any foreign laws) and timely and properly withheld from individual employee wages and all other remuneration, and from all remuneration paid to officers and directors, and paid over to the proper governmental authorities all amounts required to be so withheld and paid over under all applicable laws, including, without limitation, all withholding of Taxes required with respect to any grant of restricted stock.

(b) There are no material Liens for Taxes upon any of the assets of the Company or any Tax Affiliate that arose in connection with any failure (or alleged failure) to pay any Tax.

(c) Neither the Company nor the Subsidiaries are delinquent in the payment of any Tax. No material deficiency for any Taxes has been proposed, asserted or assessed against the Company or the Tax Affiliates that has not been resolved and paid in full. No waiver, extension or comparable consent given by the Company or the Tax Affiliates regarding the application of the statute of limitations or the period for assessment or reassessment with respect to any Taxes or Returns is outstanding, nor is any request for any such waiver or consent pending. Except as set forth in the Disclosure Schedules, there has been no Tax audit or other administrative proceeding or court proceeding with regard to any Taxes or Returns, nor is any such Tax audit or other proceeding pending, nor has there been any notice to the Company by any Taxing authority regarding any such Tax, audit or other proceeding, or, to the knowledge of the Company, is any such Tax audit or other proceeding threatened with regard to any Taxes or Returns. The Company expects no assessment of any additional Taxes on the Company or of any Tax Affiliates and has no knowledge of any unresolved questions, claims or disputes concerning the liability for Taxes on the Company or the Tax Affiliates which would exceed the estimated reserves established on its books and records.

(d) Neither the Company nor any Tax Affiliate is a party to any agreement, contract or arrangement that would result, separately or in the aggregate, in any payments after Closing that would constitute “excess parachute payments” within the meaning of Section 280G of the Code, and the consummation of the transactions contemplated by this Agreement will not be a factor causing payments to be made by the Company or any Tax Affiliate that are not deductible (in whole or in part) under Section 280G of the Code. Neither the Company nor any Tax Affiliate is a party to any agreement, contract or arrangement that would result in the payment of any amount (including, but not limited to, a gross-up payment) to any “disqualified individual” on account of the imposition of any excise tax or “excess parachute payments,” all within the meaning of Sections 280G or 4999 of the Code.

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

(f) Neither the Company nor any Tax Affiliate has any liability for unpaid Taxes in respect of any fiscal periods ending on or before Closing which have not been accrued or reserved against in the Annual Financial Statements or the Latest Financial Statements, whether asserted or unasserted, contingent or otherwise, and neither the Company nor any Tax Affiliate has incurred any material liability for Taxes since the Balance Sheet Date other than in the ordinary course of business consistent with past practice.

(g) The Company and any Tax Affiliate have made available to Parent copies of all federal and state income and all state sales and use Tax Returns for all periods since the date of Company’s incorporation, and such Returns are correct and complete in all material respects.

(h) Except as set forth in the Disclosure Schedule under the caption referencing this Section 3.12, neither the Company nor any Tax Affiliate has (i) been a member of an affiliated group (within the meaning of Code Section 1504(a)) filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company) and (ii) any liability for the Taxes of any Person (other than the Company and the Subsidiaries), nor has the Company nor any Tax Affiliate been allocated any income or debt forgiveness of any Person (other than the Company), under any provision of federal, state, local or foreign law, as a transferee or successor, by contract, or otherwise.

(i) Except as set forth in the Disclosure Schedule under the caption referencing this Section 3.12, neither the Company nor any Subsidiary is a party to any tax sharing, tax indemnification or tax allocation agreement and does not owe any material amount under any such agreements.

(j) None of the Company’s or the Subsidiaries’ assets are “tax-exempt use property” within the meaning of Section 168 of the Code.

(k) The Company and the Tax Affiliates have evidence of payment for all material Taxes, charges, fees, levies or other assessments of a foreign country paid or accrued, each for the past five years, respectively.

(l) To the Company’s knowledge, all deductions claimed or reported on all Returns of the Company and any Tax Affiliate on account of royalties or similar fees payable with respect to any Company Intellectual Property (as defined in Section 3.14(a) hereof) of the Company or any other party are allowable in full.

(m) Neither the Company nor any Tax Affiliate is required to include in income any adjustment under either Section 481(a) or Section 482 of the Code (or an analogous provision of law) by reason of a voluntary change in accounting method or otherwise, and the IRS has not proposed in writing any such adjustment or change in accounting method.

(n) All transactions that could give rise to an underpayment of tax (within the meaning of Section 6662 of the Code) were reported by the Company and each Tax Affiliate in a manner for which there is substantial authority or were disclosed on the Returns to the extent required by Section 6662(d)(2)(B) of the Code.

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

(p) None of the indebtedness of the Company or any Tax Affiliate constitutes (i) ”corporate acquisition indebtedness” (as defined in Section 279(b) of the Code) with respect to which any interest deductions may be disallowed under Section 279 of the Code or (ii) an “applicable high yield discount obligation” under Section 163(i) of the Code; and none of the interest on any such indebtedness will be disallowed as a deduction under any other provision of the Code.

(q) Neither the Company nor any Tax Affiliate has engaged in any transaction that is subject to disclosure under current or former Treasury Regulations Sections 1.6011-4 or 1.6011-4T, as applicable.

(r) There is no Contract, plan or arrangement, including this Agreement, by which any current or former employee of the Company or any Subsidiary would be entitled to receive any payment from the Company or any Subsidiary as a result of the Merger that would not be deductible pursuant to Sections 404 of the Code.

(s) Neither the Company nor any Tax Affiliate has been a member of any partnership or joint venture or the holder of a beneficial interest in any trust for any period for which the statute of limitations for any Taxes potentially applicable as a result of such membership or holding has not expired.

(t) For purposes of this Agreement, the term “ Tax ” or “ Taxes ” means all taxes, charges, fees, levies, or other assessments, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, value-added tax (VAT), transfer, franchise, profits, license, withholding, payroll, employment, social security, unemployment, disability, workers’ compensation, excise, estimated, severance, stamp, occupation, property, goods and services tax (GST) or other taxes, customs duties, premiums, contributions, fees, assessments, or charges, including, without limitation, all interest and penalties thereon, and additions to Tax or additional amounts imposed by any taxing authority, domestic or foreign, upon either the Company or any Tax Affiliate.

3.13 Contracts and Commitments .

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

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

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

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

(iv) all leases of personal property (except as otherwise set forth in Section 3.10 of the Disclosure Schedule) and excluding leases with aggregate annual payments of $100,000 or less for pagers, copy machines, or otherwise entered into in the ordinary course of business;

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

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

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

(viii) all confidentiality or non-disclosure agreements dated on or after January 1, 2003 and currently in effect;

(ix) all agreements or indentures relating to the borrowing of money or to mortgaging, pledging or otherwise placing a Lien (other than a Permitted Lien) on any of the assets of the Company or any Subsidiary;

(x) all contracts or group of related contracts with the same party for the purchase of products or services under which the undelivered balance of such products or services is in excess of $500,000;

(xi) all contracts or group of related contracts with the same party for the sale of products or services under which the undelivered balance of such products or services has a sales price in excess of $750,000;

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

(xiii) all license agreements, transfer or joint-use agreements or other agreements providing for the payment or receipt of royalties or other compensation by

the Company or any Subsidiary in connection with the Company Intellectual Property (as defined in Section 3.14(a) hereof);

(xiv) any and all other agreements of the Company not entered into in the ordinary course of business or that are material to the business, financial condition, or results of operation of the Company;

(xv) any and all other contracts or commitments for capital expenditures in excess of $250,000;

(xvi) all material agreements providing for the development of any products, software or Intellectual Property by or for any third party;

(xvii) all agreements for the sale of any capital assets in excess of $250,000; and

(xviii) all material franchise agreements.

(b) The Company or the applicable Subsidiary has performed in all material respects all obligations required to be performed by it in connection with the Contracts and is not in receipt of any claim of default under any such Contract and, to the Company’s knowledge, no such claim is threatened. Neither the Company nor any Subsidiary has a present expectation or intention of not fully performing any material obligation pursuant to any Contract. The Company has no knowledge of any breach or anticipated breach by any other party to any Contract. The Company has no knowledge that any existing contracts or subcontracts with the Company’s or any Subsidiary’s customers cannot be fully performed by the Company or the applicable Subsidiary on time and without unusual expenditures of time or money. Neither the Company nor any Subsidiary has any obligation to refund payments received for work not yet performed under contracts where the percentage of work completed is less than the percentage of revenues received to date.

(c) Prior to the date of this Agreement, the Company has provided to Parent a true and complete copy of each written Contract listed on Schedule 3.13, and a written description of any material oral Contract, together with all amendments, waivers or other changes thereto.

3.14 Intellectual Property Rights .

(a) The Company, together with the Subsidiaries, owns, or is validly licensed or otherwise possesses legally enforceable rights to use, all patents, patent rights, trademarks, trademark rights, industrial designs, industrial design rights, trade names, trade name rights, service marks, domain names, copyrights, and any applications for any of the foregoing, maskworks, schematics, inventions, technology, know-how, trade secrets, ideas, algorithms, processes, computer software programs or applications (in both source code and object code form), database, and tangible or intangible proprietary or confidential information (“ Intellectual Property ”) that are used or, to the knowledge of the Company necessary to be used, in the business of the Company and the Subsidiaries as conducted or proposed to be conducted by the Company and the Subsidiaries (collectively, “ Company Intellectual Property ”).

(b) Section 3.14(b) of the Disclosure Schedule lists (i) all patents and patent applications and all registered trademarks and trademark applications, all registered industrial designs and industrial design applications, registered trade names and registered service marks, domain names and all registered copyrights included in the Company Intellectual Property, including the jurisdictions in which each such Company Intellectual Property right has been issued or registered or in which any application for such issuance and registration has been filed, (ii) all material licenses, sublicenses and other agreements other than non-exclusive licenses and sublicenses granted to customers in the ordinary course of business as to which the Company or any Subsidiary is a party and pursuant to which any third party is authorized to use any Company Intellectual Property, and (iii) all material licenses, sublicenses and other agreements as to which the Company or any Subsidiary is a party and pursuant to which the Company or any Subsidiary is authorized to use any third-party patents, trademarks or copyrights, including software, other than off-the-shelf, shrink wrapped software and other currently available commercial software (“ Third Party Intellectual Property Rights ”) which are incorporated in, are, or form a part of any product of the Company or any Subsidiary. The execution and delivery of this Agreement by the Company and the consummation of the transactions contemplated hereby will not cause either the Company or any Subsidiary to be in material violation or default under any such license, sublicense or agreement, nor entitle any other party to any such license, sublicense or agreement to terminate or modify to any material extent such license, sublicense or agreement. Except as set forth in Section 3.14(b) of the Disclosure Schedule, the Company or a Subsidiary is the sole and exclusive owner or licensee of, with all right, title and interest in and to (free and clear of any Liens), the Company Intellectual Property, and has sole and exclusive rights (and is not contractually obligated to pay any compensation to any third party in respect thereof) to the use thereof or the material covered thereby in connection with the services or products in respect of which Company Intellectual Property is being used by the Company or such Subsidiary.

(c) To the knowledge of the Company, there is no unauthorized use, infringement or misappropriation of any Company Intellectual Property, any trade secret material of the Company or any Subsidiary or any Third Party Intellectual Property to the extent licensed by or through the Company or any Subsidiary, by any third party, including any current or former employee, contractor or independent consultant. Neither the Company nor any Subsidiary has entered into any agreement to indemnify any other person against any charge of infringement of any Intellectual Property.

(d) Neither the Company nor any Subsidiary is, nor will be, as a result of the execution and delivery of this Agreement or the performance of obligations under this Agreement, in breach of any material license, sublicense or other agreement relating to the Company Intellectual Property or Third Party Intellectual Property Rights.

(e) Neither the Company nor any Subsidiary has been sued in any suit, action or proceeding during the past five (5) years which involves a claim of infringement of any patents, trademarks, industrial designs, service marks, domain names, copyrights or violation of any trade secret or other proprietary right of any third party. Neither (i) the conduct of the business of the Company and the Subsidiaries as currently conducted nor (ii) the use of the Company Intellectual Property by the Company or any Subsidiary or the sale of products by the Company or any Subsidiary, infringes or violates any valid and enforceable license, trademark, trademark right, trade name, trade name right, industrial design, industrial design right, patent, patent right,

invention, service mark, domain name or copyright of any third party in any material way. No third party is challenging the ownership or license by the Company or any Subsidiary, or the validity or effectiveness thereof, of any of the Company Intellectual Property. Neither the Company nor any Subsidiary has brought any action, suit or proceeding for infringement of Company Intellectual Property or breach of any license or agreement involving Company Intellectual Property during the past five (5) years against any third party. There are no pending or, to the knowledge of the Company, threatened interference, re-examinations, oppositions or nullities involving any patents, patent rights or applications therefor of the Company or any Subsidiary, except such as may have been commenced by the Company or any Subsidiary. Neither the Company nor any Subsidiary is in material breach or violation of any material license agreement, and, to the knowledge of the Company, no other party is in breach or violation of, nor is any material breach or violation, to the knowledge of the Company, threatened nor has the Company or any Subsidiary suffered any actual loss of rights under any license agreement to which the Company or any Subsidiary is a party.

(f) To the Company’s knowledge, the Company and each Subsidiary have executed written agreements with all former and current employees, consultants, contractors and any and all other third parties who materially participated in the design or creation of Company Intellectual Property which assign to the Company or such Subsidiary any and all rights to Company Intellectual Property including inventions, improvements, or discoveries of information, whether patentable or not, made by them during their service to the Company or such Subsidiary, and which are not considered a work made for hire.

(g) The Company and each

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