AGREEMENT AND PLAN OF MERGER

 

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FORM OF BY-LAWS OF THE SURVIVING CORPORATION

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Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

among:

SYNERON MEDICAL LTD.,
a company organized under the laws of the State of Israel;

SYNERON ACQUISITION SUB, INC.,
a Delaware corporation;

and

CANDELA CORPORATION,
a Delaware corporation

dated as of September 8, 2009

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Exhibits

Exhibit A – Definitions
Exhibit B – Form of Voting Agreement
Exhibit C – Form of Certificate of Incorporation of the Surviving Corporation
Exhibit D – Form of Bylaws of the Surviving Corporation
Exhibit E – Form of Resignation

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AGREEMENT AND PLAN OF MERGER

        This AGREEMENT AND PLAN OF MERGER (this "Agreement" ) is made and entered into as of September 8, 2009, by and among SYNERON MEDICAL LTD. , a company organized under the laws of the State of Israel ( "Parent" ), SYNERON ACQUISITION SUB, INC., a Delaware corporation and an indirect, wholly-owned subsidiary of Parent ( "Merger Sub" ), and CANDELA CORPORATION , a Delaware corporation (the "Company" ). Certain capitalized terms used in this Agreement are defined in Exhibit A .

RECITALS

        WHEREAS, Parent, Merger Sub and the Company intend to effect a merger of Merger Sub into the Company (the "Merger" ) in accordance with this Agreement and the DGCL. Upon consummation of the Merger, Merger Sub will cease to exist, and the Company will become an indirect, wholly-owned subsidiary of Parent.

        WHEREAS, the respective boards of directors of Parent, Merger Sub and the Company have approved this Agreement and the Merger and the other transactions contemplated hereby.

        WHEREAS, the board of directors of the Company (the "Company Board" ) has unanimously determined to recommend to its stockholders the approval of this Agreement and the Merger and the other transactions contemplated hereby.

        WHEREAS, for U.S. federal income tax purposes, it is intended that (a) the Merger shall qualify as a "reorganization" under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code" ), (b) this Agreement, shall constitute a plan of reorganization within the meaning of Treasury Regulations Section 1.368-2(g) and (c) the parties hereto shall each be a party to this transaction as described in and pursuant to Section 368(b) of the Code.

        WHEREAS, in order to induce Parent to enter into this Agreement and to cause the Merger to be consummated, certain stockholders of the Company are executing voting agreements in favor of Parent in the form attached hereto as Exhibit B concurrently with the execution and delivery of this Agreement (the "Voting Agreements" ).

        NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound, hereby agree as follows:

AGREEMENT

        The parties to this Agreement, intending to be legally bound, agree as follows:

        SECTION 1.     D ESCRIPTION OF T RANSACTION     

        1.1     Merger of Merger Sub into the Company.     Upon the terms and subject to the conditions set forth in this Agreement and in the applicable provisions of the DGCL, at the Effective Time (as defined in Section 1.3), Merger Sub shall be merged with and into the Company, and the separate existence of Merger Sub shall cease. The Company will continue as the surviving corporation in the Merger (the "Surviving Corporation" ) and as an indirect, wholly-owned subsidiary of Parent.

        1.2     Effects of the Merger.     The Merger shall have the effects set forth in this Agreement, the certificate of merger and in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

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        1.3     Closing; Effective Time.     The consummation of the Contemplated Transactions (the "Closing" ) shall take place at the offices Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co., One Azrieli Center, Tel Aviv, Israel, at 10:00 am (Israel time) on a date to be designated by Parent, which shall be no later than the second Business Day after the satisfaction or waiver (to the extent permitted to be waived) of the last to be satisfied or waived of the conditions set forth in Section 6 and Section 7. The date on which the Closing actually takes place is referred to as the "Closing Date." A certificate of merger in customary form and substance and satisfying the applicable requirements of the DGCL shall be duly executed in accordance with the relevant provisions of the DGCL in connection with the Closing and, concurrently with or as soon as practicable following the Closing, shall be filed with the Secretary of State of the State of Delaware. The Merger shall become effective at the time of the filing of such certificate of merger with the Secretary of State of the State of Delaware or at such later time as may be specified in such certificate of merger (the time as of which the Merger becomes effective being referred to as the "Effective Time" ).

        1.4     Certificate of Incorporation and Bylaws; Directors and Officers.     Unless otherwise determined by Parent prior to the Effective Time:

        (a)   at the Effective Time, the certificate of incorporation of the Company as in effect immediately prior to the Effective Time shall be amended and restated in its entirety as set forth in Exhibit C , and as so amended shall be the certificate of incorporation of the Surviving Corporation until thereafter amended as provided therein or by Applicable Law.

        (b)   at the Effective Time, the bylaws of the Company as in effect immediately prior to the Effective Time shall be amended and restated in their entirety as set forth in Exhibit D , and as so amended shall be the bylaws of the Surviving Corporation until thereafter amended as provided therein or by Applicable Law; and

        (c)   the directors and officers of the Surviving Corporation immediately after the Effective Time shall be the respective individuals who are validly designated and elected immediately prior to the Effective Time, who shall serve until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the applicable provisions of the certificate of incorporation and the bylaws.

        1.5     Conversion of Shares/Options.     

        (a)   At the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company or any holder of shares of the Company Common Stock (any such share, a "Share" ):

        (i)    any Shares or shares of other capital stock of the Company that are held by the Company (or held in the Company's treasury) immediately prior to the Effective Time shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor;

        (ii)   any Shares or shares of other capital stock of the Company that are held by Parent or Merger Sub immediately prior to the Effective Time shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor;

        (iii)  notwithstanding anything to the contrary in this Agreement, any Shares or shares of other capital stock of the Company that are held by any Subsidiary of the Company or by any Subsidiary of Parent (other than Merger Sub) shall remain outstanding after the Merger and shall not be cancelled, retired or converted into Per Share Merger Consideration;

        (iv)  except as provided in clauses "(i)" through "(iii)" above and subject to Sections 1.5(b), 1.5(c) and 1.5(d), each Share outstanding immediately prior to the Effective Time shall be converted into the right to receive the following consideration (the "Per Share Merger Consideration" ): 0.2911 (the "Exchange Ratio" ) duly issued and credited fully paid Parent Shares; and

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        (v)   each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time, shall, at the Effective Time, by virtue of the Merger and without any action on the part of Merger Sub or any other Person, be converted into one fully paid and nonassessable share of common stock, $0.01 par value per share, of the Surviving Corporation.

        (b)   If, during the period commencing on the date of this Agreement and ending at the Effective Time, the outstanding shares of Company Common Stock or Parent Shares are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then the Per Share Merger Consideration shall be appropriately adjusted.

        (c)   If any shares of Company Common Stock outstanding immediately prior to the Effective Time are unvested or are subject to a repurchase option, risk of forfeiture or other condition under any applicable restricted stock purchase agreement or other Contract or under which the Company has any rights, then the Parent Shares issued in exchange for such shares of Company Common Stock will also be unvested and subject to the same repurchase option, risk of forfeiture or other condition, and the certificates representing such Parent Shares may accordingly be marked with appropriate legends. The Company shall take all action that may be necessary to ensure that, from and after the Effective Time: (i) such Parent Shares shall remain so unvested and subject to such repurchase option, risk of forfeiture or other condition; (ii) such Parent Shares need not be delivered until such time as such repurchase option, risk of forfeiture or other condition lapses or otherwise terminates; and (iii) Parent is entitled to exercise any such repurchase option or other right set forth in any such restricted stock purchase agreement or other Contract.

        (d)   Prior to the Effective Time, the Company Board (or, if appropriate, any committee thereof) and the board of directors of Parent (the "Parent Board" ) (or, if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary to provide that effective at the Effective Time, the Company Stock Plans and each Company Award (as defined in Section 2.3(b)) listed in Part 1.5(d) of the Disclosure Schedule and which is outstanding immediately prior to the Effective Time, whether vested or unvested, shall be assumed by Parent and shall become fully vested and continue in effect in all material respects on the same terms and conditions as in effect immediately prior to the Effective Time (subject to the adjustments provided in Section 1.5(b)), and each such Company Award shall be converted automatically into an option or stock appreciation right, as the case may be (each, a "New Award" ) to purchase the number of shares of Parent Shares, determined as provided below, at the exercise price, determined as provided below:

        (i)    the number of Parent Shares to be subject to the New Award shall be equal to the number of shares of Company Common Stock remaining subject (as of immediately prior to the Effective Time) to the Company Award multiplied by the Exchange Ratio; provided that the number of Parent Shares resulting therefrom shall be rounded downward to the nearest whole Parent Share; and

        (ii)   the exercise price per Parent Share under the New Award shall be equal to (x) the exercise price per share of the Company Common Stock under the Company Award, divided by (y) the Exchange Ratio, provided that such exercise price shall be rounded upward to the nearest whole cent.

        The adjustment provided herein with respect to any Company Award shall be, and is intended to be, effected in a manner which is consistent with Section 424(a) of the Code. Except as provided in this Section 1.5(d), after the Effective Time, each New Award shall be exercisable upon the same terms and conditions as were applicable to the related Company Award immediately prior to the Effective Time (except that with regard to such New Award, any references to the Company shall be deemed, as appropriate, to mean Parent). Parent shall take all action necessary, on or prior to the Effective Time, to authorize and reserve a number of Parent Shares sufficient for issuance upon the exercise of New Awards as contemplated by this Section 1.5(d).

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        (iii)  Parent shall file no later than ten (10) Business Days after the Effective Time a registration statement on Form S-8 (or any successor or other appropriate form) registering a number of Parent Shares to be issued in connection with the exercise of the New Awards as determined in this Section 1.5(d), and shall use its commercially reasonable efforts to maintain the effectiveness of such registration statement for as long as the New Awards remain outstanding and such registration continues to be required.

        (e)   The Company shall take all actions necessary or appropriate to provide that each Company Award not listed in Part 1.5(d) of the Disclosure Schedule which is outstanding immediately prior to the Effective Time shall become fully vested and, to the extent not exercised immediately prior to the Effective Time, shall be canceled by the Company.

        (f)    Prior to the Effective Time, the Company Board shall take action to amend the Company's 1990 Employee Stock Purchase Plan (the "ESPP" ) to end the Payment Period no later than two (2) Business Days before the Effective Time and to terminate the ESPP immediately thereafter.

        (g)   No fractional Parent Shares shall be issued in connection with the Merger, and no certificates or scrip for any such fractional shares shall be issued. Any holder of Company Common Stock who would otherwise be entitled to receive a fraction of a Parent Share (after aggregating all fractional shares of Parent Shares issuable to such holder) shall, in lieu of such fraction of a share and upon surrender of such holder's Company Stock Certificate(s) (as defined in Section 1.6), be paid in cash the proportionate interest in the net proceeds for the sale by the Exchange Agent on behalf of such holder of the aggregate fractional Parent Shares that such holder otherwise would be entitled to receive.

        1.6     Closing of the Company's Transfer Books.     At the Effective Time: (a) all shares of Company Common Stock outstanding immediately prior to the Effective Time shall automatically be canceled and retired and shall cease to exist, and in the case of shares of Company Common Stock represented by book-entry ( "Book-Entry Shares" ), the names of the former registered holders shall be removed from the registry of holders of such shares, and all holders of certificates representing shares of Company Common Stock that were outstanding immediately prior to the Effective Time and any holders of Book-Entry Shares shall cease to have any rights as stockholders of the Company; and (b) the stock transfer books of the Company shall be closed with respect to all shares of Company Common Stock outstanding immediately prior to the Effective Time. No further transfer of any such shares of Company Common Stock shall be made on such stock transfer books after the Effective Time. If, after the Effective Time, a valid certificate previously representing any shares of Company Common Stock outstanding immediately prior to the Effective Time (a "Company Stock Certificate" ) is presented to the Exchange Agent (as defined in Section 1.7) or to the Surviving Corporation or Parent, such Company Stock Certificate shall be canceled and shall be exchanged as provided in Section 1.7.

        1.7     Surrender of Certificates.     

        (a)   On or prior to the Closing Date, Parent shall select a reputable bank or trust company reasonably satisfactory to the Company to act as exchange agent in the Merger (the "Exchange Agent" ). Promptly after the Effective Time (but in any event within five (5) Business Days), Parent or Merger Sub shall deposit with the Exchange Agent: (i) the Parent Shares issuable pursuant to Section 1.5 in respect of Shares properly delivered to the Exchange Agent; and (ii) cash sufficient to make payments in lieu of fractional shares in accordance with Section 1.5(g). The Parent Shares, and cash amounts so deposited with the Exchange Agent, together with any dividends or distributions received by the Exchange Agent with respect to such shares, are referred to collectively as the "Exchange Fund."

        (b)   Promptly after the Effective Time (but in any event within five (5) Business Days), the Exchange Agent will mail to the Persons who were record holders of Company Stock Certificates immediately prior to the Effective Time: (i) a letter of transmittal in customary form and containing such provisions as Parent may reasonably specify (including a provision confirming that delivery of Company Stock Certificates or evidence thereof shall be effected, and risk of loss and title to Company Stock Certificates shall pass, only

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upon actual delivery of such Company Stock Certificates or evidence of Book-Entry Shares, as the case may be to the Exchange Agent); and (ii) instructions for use in effecting the surrender of Company Stock Certificates in exchange for the aggregate Per Share Merger Consideration for the shares surrendered. Upon surrender of a Company Stock Certificate or evidence of Book-Entry Shares to the Exchange Agent for exchange, together with a duly executed letter of transmittal and such other documents as may be reasonably required by the Exchange Agent or Parent: (A) the holder of such Company Stock Certificate or Book-Entry Shares shall be entitled to receive in exchange therefor a certificate representing the number of whole Parent Shares (after giving effect to any required withholdings) that such holder has the right to receive pursuant to the provisions of Section 1.5 and cash in lieu of any fractional Parent Shares) and the applicable Per Share Merger Consideration shall be sent as promptly as practicable to such holders; and (B) the Company Stock Certificate or Book-Entry Shares so surrendered shall be canceled. Until surrendered as contemplated by this Section 1.7(b), each Share shall be deemed, from and after the Effective Time, to represent only the right to receive the Per Share Merger Consideration as contemplated by Section 1.5. No interest shall be paid, payable or accrued on any amount payable upon due surrender of the Company Stock Certificates or Book-Entry Shares. If any Company Stock Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the holder thereof and, if reasonably requested by Parent, the execution of an indemnity agreement against any claim that may be made against it with respect to such Company Stock Certificate, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Company Stock Certificate, certificates representing the Per Share Merger Consideration into which the Shares represented by such Company Stock Certificates were converted pursuant to Section 1.5 (and cash for fractional shares, if any, as may be required pursuant to Section 1.5(g) and any dividends or distributions payable pursuant to Section 1.7(c)).

        (c)   No dividends or other distributions declared or made with respect to Parent Shares with a record date after the Effective Time shall be paid to the holder of any unsurrendered Company Stock Certificate or Book-Entry Shares with respect to the Parent Shares that such holder has the right to receive in the Merger until such holder surrenders such Company Stock Certificate or Book-Entry Shares in accordance with this Section 1.7 (at which time such holder shall be entitled, subject to the effect of applicable abandoned property, escheat or similar laws, to receive all such dividends and distributions, without interest).

        (d)   Any portion of the Exchange Fund that remains undistributed to holders of Company Stock Certificates as of the date one (1) year after the Closing Date shall be delivered to Parent upon demand, and any holders of Company Stock Certificates who have not theretofore surrendered their Company Stock Certificates in accordance with this Section 1.7 shall thereafter look only to Parent for satisfaction of their claims for the Per Share Merger Consideration.

        (e)   Each of the Exchange Agent, Parent and the Surviving Corporation shall be entitled to deduct and withhold from any consideration deliverable pursuant to this Agreement to any holder of any Shares such amounts as are required to be deducted or withheld from such consideration under the Code or any provision of state, local or foreign tax law or under any other applicable Legal Requirement. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.

        (f)    Neither Parent nor the Surviving Corporation shall be liable to any holder of any Shares or to any other Person with respect to any Parent Shares (or dividends or distributions with respect thereto), or for any cash amounts, delivered to any public official pursuant to any applicable abandoned property law, escheat law or similar Legal Requirement.

        1.8     Further Action.     If, at any time after the Effective Time, any further action is determined by Parent or the Surviving Corporation to be necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full right, title and possession of and to all rights and property of Merger Sub and the Company, then the officers and directors of the Surviving Corporation and

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Parent shall be fully authorized (in the name of Merger Sub, in the name of the Company and otherwise) to take such action.

        1.9     Appraisal Rights.     (a) Notwithstanding anything in this Agreement to the contrary, any Shares (including Book-Entry Shares) outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Merger or consented thereto in writing and who has complied with all of the relevant provisions of Section 262 of the DGCL (the "Dissenting Shares" ), shall not be converted into, or represent the right to receive, the Per Share Merger Consideration. Such stockholders shall be entitled to receive, subject to and net of any applicable withholding of Taxes, payment of the appraised value of such Dissenting Shares held by them in accordance with the provisions of Section 262 of the DGCL, except that all Dissenting Shares held by stockholders who shall have failed to perfect or who shall have effectively withdrawn or lost their rights to appraisal of such Dissenting Shares under Section 262 of the DGCL shall thereupon be deemed to have been converted into, and to have become exchangeable for, as of the Effective Time, the right to receive the Per Share Merger Consideration, without any interest thereon, upon surrender, in the manner provided in Section 1.7, of such Dissenting Shares.

        (b)   The Company shall give Parent prompt notice of, together with copies of, any written demands for appraisal received by the Company, withdrawals of such demands, and any other instruments served on or otherwise received by the Company pursuant to the DGCL. Parent shall have the right to direct and control all negotiations and proceedings with respect to any and all such demands for appraisal under the DGCL. Without limiting, and in furtherance of, the foregoing, the Company shall not, except with the prior written consent of Parent, (i) make any payment with respect to any such demands for appraisal other than pursuant to any Legal Requirement, (ii) offer to settle or otherwise settle any such demands or (iii) waive any failure to properly make or effect any such demand for appraisal or other action required to perfect appraisal rights in accordance with the DGCL.

        SECTION 2.     R EPRESENTATIONS AND W ARRANTIES OF THE C OMPANY     

        Except as set forth (i) in the Disclosure Schedule or (ii) in the Filed Company SEC Documents, (other than disclosures in the "Risk Factors" or "Forward Looking Statements" sections of any such reports or other forward-looking statements set forth in such reports) the Company represents and warrants to Parent and Merger Sub as follows:

        2.1     Subsidiaries; Due Organization; Etc.     

        (a)   The Company has no Subsidiaries, except for the Entities identified in Part 2.1(a)(i) of the Disclosure Schedule ; and neither the Company nor any of the other Entities identified in Part 2.1(a)(i) of the Disclosure Schedule owns any capital stock of, any equity or similar interest of any nature in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest of any nature in, any other Entity, other than the Entities identified in Part 2.1(a)(ii) of the Disclosure Schedule (which includes a description of the interest and the percentage owned). None of the Acquired Corporations has agreed or is obligated to make, or is bound by any Contract under which it may become obligated to make, any future investment in or capital contribution to any other Entity. None of the Acquired Corporations has, at any time, been a general partner of, or has otherwise been liable for any of the debts or other obligations of, any general partnership, limited partnership or other Entity.

        (b)   Each of the Acquired Corporations is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has all necessary power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; and (ii) to own and use its assets in the manner in which its assets are currently owned and used, except in the case of clauses (i) and (ii), the absence of which would not, individually, or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect.

        (c)   Each of the Acquired Corporations is qualified to do business as a foreign entity, and is in good standing, under the laws of all jurisdictions where the nature of its business requires such qualification, except as would not, individually, or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect.

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        2.2     Certificate of Incorporation; Bylaws; Charters and Codes of Conduct.     The Company has made available to Parent accurate and complete copies of the certificate of incorporation, bylaws and other charter and organizational documents of the respective Acquired Corporations, including all amendments thereto, as currently in effect. The Company has made available to Parent accurate and complete copies of: (a) the charters of all committees of the Company Board; and (b) any code of conduct or similar policy adopted by any of the Acquired Corporations or by the board of directors, or any committee of the board of directors, of any of the Acquired Corporations, as currently in effect. The Company is not in breach or violation of its certificate of incorporation, by-laws or other charter and organizational documents. None of the Company Subsidiaries is in breach or violation of its respective certificate of incorporation, by-laws or other charter and organizational documents, except as would not reasonably be expected to have a Company Material Adverse Effect.

        2.3     Capitalization, Etc.     

        (a)   The authorized capital stock of the Company consists of 60,000,000 shares of Company Common Stock, of which 22,907,022 shares have been issued and are outstanding and of which 3,449,860 shares are held by the Company in its treasury. Except as set forth in Part 2.3(a)(i) of the Disclosure Schedule , the Company does not hold any shares of its capital stock in its treasury. All of the outstanding shares of Company Common Stock have been duly authorized and validly issued, and are fully paid and nonassessable. There are no shares of Company Common Stock held by any of the other Acquired Corporations. Except for the Voting Agreements and as set forth in Part 2.3(a)(ii) of the Disclosure Schedule : (i) none of the outstanding shares of Company Common Stock is entitled or subject to any preemptive right, right of participation or any similar right; (ii) none of the outstanding shares of Company Common Stock is subject to any right of first refusal in favor of the Company; and (iii) there is no Company Contract relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or granting any option or similar right with respect to), any shares of Company Common Stock. None of the Acquired Corporations is under any obligation, or is bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding shares of Company Common Stock or other securities. Part 2.3(a)(iii) of the Disclosure Schedule accurately describes all repurchase rights held by the Company with respect to shares of Company Common Stock (including shares issued pursuant to the exercise of stock options), and specifies which of those repurchase rights are currently exercisable.

        (b)   (i) 5,399,642 shares of Company Common Stock are subject to outstanding options to purchase Company Common Stock and stock appreciation rights or similar rights granted on Company Common Stock (collectively "Company Award(s)" ) and 603,848 shares of Company Common Stock are reserved for future Company Award grants under the Candela Laser Corporation 1990 Employee Stock Purchase Plan, the Candela Corporation Third Amended and Restated 1998 Stock Plan, and the Candela Corporation 2008 Stock Plan (collectively, the "Company Stock Plans" ). Part 2.3(b) of the Disclosure Schedule sets forth the following information with respect to each Company Award outstanding as of the date of this Agreement: (A) the particular Company Stock Plan (if any) pursuant to which such Company Award was granted; (B) the name of the grantee; (C) the number of shares of Company Common Stock subject to such Company Awards; (D) the exercise price of such Company Award; (E) the date on which such Company Award was granted; (F) the extent to which such Company Award is vested and exercisable as of the date of this Agreement; (G) the date on which such Company Award expires; and (H) whether such Company Award is an "incentive stock option" (as defined in the Code), a non-qualified stock option or a stock appreciation right. The Company has made available to Parent accurate and complete copies of all the Company Stock Plans pursuant to which any of the Acquired Corporations has ever granted Company Awards, and the forms of all standard Award agreements evidencing such grants. Each Company Award was duly authorized no later than the date on which the grant of such Company Award was by its terms to be effective (the "Grant Date") by all necessary corporate action, including, as applicable, approval by the Company Board (or a duly constituted and authorized committee thereof), or a duly authorized delegate

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thereof, and any required stockholder approval by the necessary number of votes or written consents; each such grant was made in all material respects in accordance with the terms of the applicable Company Stock Plan and all other applicable Law; each such grant intended to qualify as an "incentive stock option" under Section 422 of the Code so qualifies; and the per share exercise price of each Company Award, if applicable, was not less than the fair market value of a share of Company Common Stock on the applicable Grant Date.

        (c)   Except as set forth in Part 2.3(b) of the Disclosure Schedule there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of any of the Acquired Corporations or any stock appreciation rights or similar rights; or (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of any of the Acquired Corporations, except in the case of clauses (i) and (ii), in the ordinary course of business of the Acquired Corporations with respect to obligations between or among the Acquired Corporations.

        (d)   To the knowledge of the Company, all outstanding shares of Company Common Stock, options, warrants and other securities of the Acquired Corporations have been issued and granted in compliance with all applicable securities laws and other applicable Legal Requirements.

        (e)   All of the outstanding shares of capital stock of each of the Company's Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof, and are owned beneficially and of record by the Company, free and clear of any Encumbrances, other than with respect to applicable Legal Requirements.

        2.4     Authority; Binding Nature of Agreement.     

        (a)   The Company has all necessary corporate power and authority to enter into and to perform its obligations under this Agreement (subject to the receipt of the Required Stockholder Vote (as defined in Section 2.21)). The Company Board (at a meeting duly called and held) has: (a) unanimously determined that the Merger is advisable; (b) unanimously authorized and approved the execution, delivery and performance of this Agreement by the Company and unanimously approved the Merger; (c) recommended the adoption and approval of this Agreement by the holders of Company Common Stock and directed that this Agreement and the Merger be submitted for consideration by the Company's stockholders at the Company Stockholders' Meeting (as defined in Section 5.2)(the "Company Board Recommendation" ); and (d) to the extent necessary, unanimously adopted a resolution having the effect of causing the Company not to be subject to any state takeover law or similar Legal Requirement that might otherwise apply to the Merger or any of the other Contemplated Transactions. This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Parent and Merger Sub, constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Legal Requirements of general application affecting or relating to the enforcement of creditors' rights generally and (ii) is subject to general principles of equity, whether considered in a proceeding at law or in equity (the "Bankruptcy and Equity Exception" ).

        (b)   Other than the receipt of the Required Stockholder Vote, no other corporate proceedings on the part of the Company are necessary to approve or adopt this Agreement and to consummate the Contemplated Transactions.

        2.5     SEC Filings; Financial Statements.     

        (a)   The Company has made available to Parent accurate and complete copies of all registration statements, proxy statements, Certifications (as defined below) and other statements, reports, schedules, forms and other documents (including documents incorporated by reference therein) filed by the Company with the SEC since June 28, 2008 (the "Company SEC Documents" ) as well as all comment letters received

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by the Company from the SEC since June 28, 2008 and all responses to such comment letters provided to the SEC by or on behalf of the Company. All statements, reports, schedules, forms and other documents required to have been filed by the Company with the SEC have been so filed on a timely basis. None of the Company's Subsidiaries is required to file any documents with the SEC. As of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the Company SEC Documents complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act (as the case may be); and (ii) none of the Company SEC Documents at the time they were filed with the SEC contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Each of the principal executive officer of the Company and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company, as applicable) has made certifications and statements required by: (A) Rule 13a-14 under the Exchange Act; and (B) 18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley Act) relating to the Company SEC Documents (collectively, the "Certifications" ) which at the time made were accurate and complete, and complied as to form and content with all applicable Legal Requirements. As used in this Section 2, the term "file" and variations thereof shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.

        (b)   The Company maintains disclosure controls and procedures that satisfy the requirements of Rule 13a-15 under the Exchange Act. Such disclosure controls and procedures are designed to ensure that all material information concerning the Company, including its consolidated Subsidiaries is made known on a timely basis to the individuals responsible for the preparation of the Company's filings with the SEC and other public disclosure documents. The Company has made available to Parent accurate and complete copies of, all written descriptions of, and all policies, manuals and other documents promulgating such disclosure controls and procedures. The Company is in material compliance with the applicable listing and other rules and regulations of the Nasdaq and it has not received any notice from the Nasdaq asserting any non-compliance with such rules and regulations.

        (c)   The Company maintains an effective system of internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. The Company's principal executive officer and its principal financial officer have disclosed, based on their most recent evaluation, to the Company's outside auditors and the audit committee of the Company Board (i) any significant deficiency or material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial data and, (ii) any fraud, whether or not material, that involves management or other employees who have a role in the Company's control over financial reporting. Since June 28, 2008 (the "Audit Date" ), there has not been any material weakness in the Company's internal control over financial reporting, nor any material change in the Company's internal control over financial reporting.

        (d)   The financial statements (including any related notes) contained or incorporated by reference in the Company SEC Documents: (i) complied as to form as of the respective dates of filing of such Company SEC Documents with the SEC, in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements or, in the case of unaudited financial statements, as permitted by Form 10-Q of the SEC, and except that the unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end adjustments that will not, individually or in the aggregate, be material in amount), and (iii) fairly present, in all material respects, the consolidated financial position of the Company and its consolidated Subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows of the Company and its consolidated Subsidiaries for the periods covered thereby (subject, in the case of unaudited statements, to notes and normal year-end audit adjustments that were not, or with respect to any such financial statements contained in any Company SEC Documents to be filed subsequent to the

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date hereof are not expected to be, material in amount or effect). No financial statements of any Person other than the Acquired Corporations are required by GAAP to be included in the consolidated financial statements of the Company.

        (e)   The Company's auditor has at all times since the date of enactment of the Sarbanes-Oxley Act been "independent" with respect to the Company within the meaning of Regulation S-X under the Exchange Act.

        (f)    The Company has made available to Parent accurate and complete copies of the documentation creating or governing "off-balance sheet arrangements" (as defined in Item 303(a)(4)(ii) of Regulation S-K under the Exchange Act) effected by any of the Acquired Corporations during any period covered by any of the Company SEC Documents.

        2.6     Absence of Changes.     Except as disclosed on the Company SEC Documents or set forth in Part 2.6 of the Disclosure Schedule or as expressly contemplated by this Agreement, since June 28, 2008 through the date of this Agreement:

        (a)   there has not been any Company Material Adverse Effect, and no event has occurred or circumstance arisen that would reasonably be expected to have or result in a Company Material Adverse Effect;

        (b)   there has not been any material loss, damage or destruction to, or any material interruption in the use of, any of the assets of any of the Acquired Corporations (whether or not covered by insurance) which has had or would reasonably be expected to have a Company Material Adverse Effect;

        (c)   none of the Acquired Corporations has: (i) declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of capital stock; or (ii) repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities;

        (d)   none of the Acquired Corporations has: (i) made or changed any Tax election; (ii) adopted or changed any accounting method relating to Taxes; (iii) compromised or settled any Tax liability; or (iv) consented to any waiver or extension of the limitations period applicable to any Taxes or Tax Returns, in each case, which has had or would reasonably be expected to have a Company Material Adverse Effect;

        (e)   none of the Acquired Corporations has: (i) adopted, established or entered into any Company Benefit Plan or Company Benefit Agreement; (ii) caused or permitted any Company Benefit Plan to be amended in any material respect other than to the extent require by any Legal Requirement; or (iii) paid any bonus or made any profit-sharing or similar payment to, or materially increased the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or other employees other than in the ordinary course of business; and

        (f)    none of the Acquired Corporations has entered into any material transaction or Contract outside of the ordinary course of business.

        2.7     Title to Assets.     The Acquired Corporations own, and have good and valid title to, all material assets purported to be owned by them, including: (a) all material assets reflected on the Unaudited Interim Balance Sheet (except for inventory sold or otherwise disposed of in the ordinary course of business since the date of the Unaudited Interim Balance Sheet); and (b) all other material assets reflected in the books and records of the Acquired Corporations as being owned by the Acquired Corporations. All of said assets are owned by the Acquired Corporations free and clear of any Encumbrances, except for: (i) any statutory lien for current taxes not yet due and payable, or taxes being contested in good faith by appropriate proceedings and for which adequate reserves have been made; (ii) minor liens that have arisen in the ordinary course of business and that do not (in any case or in the aggregate) materially detract from the value of the assets subject thereto or materially impair the operations of any of the Acquired Corporations; (iii) pledges to secure deposits described in Part 2.7 of the Disclosure Schedule; and (iv) liens described in Part 2.7 of the Disclosure Schedule . The Acquired Corporations are the lessees of, and hold valid

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leasehold interests in, all assets purported to have been leased by them, including: (A) all assets reflected as leased on the Unaudited Interim Balance Sheet; and (B) all other material assets reflected in the books and records of the Acquired Corporations as being leased by the Acquired Corporations.

        2.8     Real Property; Leasehold.     None of the Acquired Corporations own any real property or any interest in real property, except for the leaseholds created under the real property leases identified in Part 2.8 of the Disclosure Schedule.

        2.9     Intellectual Property; Privacy.     

        (a)   For purposes of this Agreement, the following terms shall be defined as follows:

        (i)     "IP Rights" means any and all of the following in any country: (A) Copyrights, Patent Rights, Trademark Rights, domain name registrations, moral rights, trade secrets, know how rights, and other intellectual property rights; and (B) the right (whether at law, in equity, by contract or otherwise) to use or otherwise exploit any of the foregoing.

        (ii)    "Copyrights" means all U.S. copyrights and copyrightable works, including all rights of authorship, reproduction, distribution, display, performance, preparation of derivative works, moral rights and rights of ownership of copyrightable works and all rights to register and obtain renewals and extensions of registrations, together with all other interests accruing by reason of international copyright.

        (iii)   "Material Company IP Rights" means all Company IP Rights, which are material to the conduct of the Company's business in the manner in which its business is currently being conducted.

        (iv)   "Patent Rights" means all issued patents and pending patent applications (which for purposes of this Agreement shall include utility models, design patents, certificates of invention and applications for certificates of invention and priority rights) in any country, including all provisional applications, substitutions, continuations, continuations-in-part, divisions, renewals, reissues, re-examinations and extensions thereof.

        (v)    "Company IP Rights" means all IP Rights owned solely or co-owned by the Company or its Subsidiaries, or in which the Company or its Subsidiaries has any right, title or interest, including any IP Rights applied for by, issued to, or registered in the name of the Company or any of its Subsidiaries.

        (vi)   "Trademark Rights" means all trademarks, registered trademarks, applications for registration of trademarks, service marks, registered service marks, applications for registration of service marks, trade names, registered trade names and applications for registration of trade names.

        (b)    Part 2.9(b) of the Disclosure Schedule lists all of the Patent Rights and all registered Trademark Rights (or Trademark Rights for which applications for registration have been filed) owned solely by the Company or its Subsidiaries as of the date of this Agreement, setting forth in each case the jurisdictions in which patents have been issued, patent applications have been filed, trademarks have been registered and trademark applications have been filed. Part 2.9(b) of the Disclosure Schedule lists all of the Patent Rights and all registered Trademark Rights (or Trademark Rights for which applications for registration have been filed) in which the Company or its Subsidiaries has any co-ownership interest, other than those owned solely by the Company or its Subsidiaries, setting forth in each case the jurisdictions in which patents have been issued, patent applications have been filed, trademarks have been registered and trademark applications have been filed. Part 2.9(b) of the Disclosure Schedule lists, to the best knowledge of the Company as of the date hereof, all of the Patent Rights and all registered Trademark Rights (or Trademark Rights for which applications for registration have been filed) in which the Company or its Subsidiaries has any right, title or interest, other than those owned solely or co-owned by the Company or its Subsidiaries.

        (c)   Except as set forth in Part 2.9(c) of the Disclosure Schedule , neither the Company nor its Subsidiaries jointly own any Patent Rights with any person other than the Company or its Subsidiaries. No

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current or former officer, manager, director, employee or independent contractor of the Company or its Subsidiaries, has any right, title or interest in, to or under any Company IP Rights or any IP Right used in the business of the Company or any of its Subsidiaries that has not been exclusively assigned, or transferred to the Company or its Subsidiaries or licensed to the Company or its Subsidiaries for such use, except where the absence of such assignment, transfer or license would not reasonably be expected to have or result in a Company Material Adverse Effect. Except as set forth in Part 2.9 (c) of the Disclosure Schedule , no Company IP Right is involved in any interference, reexamination, cancellation, or opposition proceeding and no third party has challenged in writing within the last two years, or to the best knowledge of the Company has threatened within the last two years to challenge, the right, title or interest of the Company or its Subsidiaries in, to or under the Company IP Rights owned or co-owned by the Company or exclusively licensed to the Company, or the validity, enforceability or claim construction of any Patent Rights owned or co-owned or exclusively licensed by the Company or its Subsidiaries included in the Company IP Rights. To the best knowledge of the Company, no third party has claimed within the last two years any right, title or interest in any Company IP Rights owned or co-owned by or exclusively licensed to the Company in contravention of the Company's rights in such Company IP Rights.

        (d)   Except as set forth in Part 2.9 (d) of the Disclosure Schedule , no third party is asserting in writing, or to the best knowledge of the Company threatening in writing or otherwise to make, a claim challenging the ownership or other rights of the Company or its Subsidiaries in, under or to any of the Material Company IP Rights and the Company has no knowledge of facts that have led the Company to believe that such claim is likely to be made.

        (e)   Neither the Company nor its Subsidiaries is subject to any legally binding contract or written agreement that restricts the use, transfer, delivery or licensing of the Material Company IP Rights owned or co-owned by the Company (or any tangible embodiment thereof), except where such restrictions would not reasonably be expected to have or result in a Company Material Adverse Effect. Part 2.9(e) of the Disclosure Schedule is an accurate and complete list of all licenses and other agreements pursuant to which the Company or any of its Subsidiaries is authorized to use any IP Rights owned by any third party other than those that are not material to the conduct of the business of the Company or its Subsidiaries. The execution, delivery, and performance of this Agreement, and the consummation of the transactions contemplated hereby, will not breach, violate, or conflict with any such agreement governing any such IP Right, will not cause the forfeiture or termination or give rise to a right of forfeiture or termination of any such IP Right, or in any way impair the right of the Company or any of its Subsidiaries to use or bring any action for the unauthorized use or disclosure, infringement, or misappropriation of any Material Company IP Right.

        (f)    The Company and its Subsidiaries have taken commercially reasonable measures to protect and maintain the secrecy and confidentiality of the proprietary know-how included in the Company IP Rights. Neither the Company nor any of its Subsidiaries has granted, licensed or conveyed to any third party, pursuant to any written or oral contract, agreement, license or other arrangement, any exclusive right or license, or title in, to or under any Material Company IP Rights (or any tangible embodiment thereof). Except as set forth in Part 2.9(f) of the Disclosure Schedule , there are no outstanding obligations to pay any material amounts or provide other material consideration to any other person in connection with any Material Company IP Rights (or any tangible embodiment thereof).

        (g)   To the best of the knowledge of the Company, the Company and its Subsidiaries own, or otherwise possess legally enforceable rights to use, all IP Rights used by the Company in its conduct of its business, other than those which, individually or in the aggregate, are not material to the conduct of the Company's business. To the best knowledge of the Company, the Company IP Rights collectively constitute all of the IP Rights necessary to enable the Company and its Subsidiaries to conduct its business, other than those which, individually or in the aggregate, are not material to the conduct of the Company's business.

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        (h)   To the best of the knowledge of the Company, the conduct of its business does not infringe, constitute contributory infringement, inducement to infringe, misappropriation or unlawful use of any IP Rights of any other person, and, except as set forth in Part 2.9(h) of the Disclosure Schedule , neither the Company nor its Subsidiaries has received any written notice or other communication asserting any of the foregoing that remains unresolved.

        (i)    To the best knowledge of the Company, no Material Company IP Rights are being infringed or misappropriated by any third party.

        (j)    The practice of the Company and its Subsidiaries is to sign non-disclosure and assignment agreements with officers and employees of the Company and its Subsidiaries who have contributed in a material manner to the creation or development of any Material Company IP Rights arising from services performed for the Company or its Subsidiaries by such persons. The practice of the Company and its Subsidiaries is to sign non-disclosure and assignment agreements with consultants and independent contractors to the Company or its Subsidiaries who have contributed in a material manner to the creation or development of any Material Company IP Rights, arising from the services performed for the Company or its Subsidiaries by such persons. To the best knowledge of the Company, no current employee or independent contractor of the Company or its Subsidiaries is in material violation of any term of any non-disclosure or assignment agreement with the Company or its Subsidiaries.

        (k)   Neither the execution, delivery or performance of this Agreement by the Company nor the consummation by the Company of the transactions contemplated by this Agreement will contravene, conflict with or result in any limitation on the Company's right, title or interest in or to any Company IP Rights, except where such contravention, conflict or limitation would not reasonably be expected to have or result in a Company Material Adverse Effect.

        2.10     Contracts.     

        (a)    Part 2.10(a) of the Disclosure Schedule identifies each Company Contract that constitutes a "Material Contract." For purposes of this Agreement, each of the following, shall be deemed to constitute a "Material Contract" :

        (i)    any Contract where the amount paid or payable is greater than $150,000, in the aggregate, over a period of one (1) year: (A) relating to the employment of, or the performance of services by, any employee, consultant or director; (B) pursuant to which any of the Acquired Corporations is or may become obligated to make any severance, termination or similar payment to any current or former employee or director; or (C) pursuant to which any of the Acquired Corporations is or may become obligated to make any bonus or similar payment (other than payments constituting base salary);

        (ii)   any Company IP Contract, if a breach of such Company IP Contract could reasonably be expected to have or result in a Company Material Adverse Effect;

        (iii)  any Contract relating to the acquisition, sale, spin-off, outsourcing or disposition of any business operation or unit or any product line of any Acquired Corporation;

        (iv)  any Contract that provides for indemnification of any Company Associate or any current or former agent of any of the Acquired Corporations other than such Contracts entered into in the ordinary course of business (an "Indemnification Contract" );

        (v)   any Contract (other than such Contracts entered into in the ordinary course of business and/or that may be canceled without any penalty or other liability to any Acquired Corporation upon notice of 120 days or less) imposing any material restriction on the right or ability of any Acquired Corporation: (A) to compete with any other Person; (B) to acquire any product or other asset or any services from any other Person; (C) to solicit, hire or retain any Person as an employee, consultant or independent contractor; (D) to develop, sell, supply, distribute, offer, support or service any product or any technology

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or other asset to or for any other Person; (E) to perform services for any other Person; or (F) to transact business or deal in any other manner with any other Person;

        (vi)  any Contract (other than Contracts evidencing Company Awards): (A) relating to the acquisition, issuance, voting, registration, sale or transfer of any securities; (B) providing any Person with any preemptive right, right of participation or similar right with respect to any securities; or (C) providing any of the Acquired Corporations with any right of first refusal with respect to, or right to repurchase or redeem, any securities;

        (vii) any Contract incorporating or relating to any guaranty, any warranty, any sharing of liabilities or any indemnity or similar obligation other than (A) any such agreement between or among any of the Acquired Corporations; or (B) any such agreement entered into in the ordinary course of business which relates to obligations which do not exceed $250,000 in the aggregate;

        (viii)  any Contract relating to any currency hedging;

        (ix)  any Contract: (A) to which any Governmental Body is a party or under which any Governmental Body has any rights or obligations; or (B) directly or indirectly benefiting any Governmental Body (including any subcontract or other Contract between any Acquired Corporation and any contractor or subcontractor to any Governmental Body ) ;

        (x)   any mortgages, indentures, guarantees, loans or credit agreements, security agreements or other Contracts relating to the borrowing of money or extension of credit, other than (A) accounts receivables and payables which do not exceed $250,000 in the aggregate, (B) loans to direct and indirect wholly owned Subsidiaries which do not exceed $250,000 in the aggregate (C) advances to employees for travel and business expenses, in each case in the ordinary course of business consistent with past practice which do not exceed $250,000 in the aggregate, (D) agreements between or among any of the Acquired Corporations which relate to obligations which do not exceed $250,000 in the aggregate and (E) agreements entered into in the ordinary course of business which relate to obligations which do not exceed $250,000 in the aggregate;

        (xi)  any Contract with or to a labor union, including a collective bargaining agreement or similar agreement;

        (xii) any Contract, the termination of which would reasonably be expected to have or result in a Company Material Adverse Effect; and

        (xiii)  any Contract outside the ordinary course of business that contemplates or involves the payment or delivery of cash or other consideration in an amount or having a value in excess of $250,000 in the aggregate, or contemplates or involves the performance of services having a value in excess of $250,000 in the aggregate.

        The Company has made available to Parent copies of each written Material Contract and written summaries of all oral Material Contracts (other than Company IP Contracts that do not need to be specifically identified in Part 2.9 of the Disclosure Schedule ).

        (b)   Except as disclosed on Part 2.10(b) of the Disclosure Schedule , each Material Contract is valid and in full force and effect, and is enforceable in accordance with its terms, subject to (i) the Bankruptcy and Equity Exception, and (ii) such failures to be valid and binding or to be in full force and effect that would not have or reasonably be expected to have a Company Material Adverse Effect.

        (c)   Except as set forth in Part 2.10(c) of the Disclosure Schedule , none of the Acquired Corporations has violated or breached, or committed any default under (and no event has occurred that with notice or lapse of time, or both, would constitute such a default), any Material Contract; and, to the best of the knowledge of the Company, no other Person has violated or breached, or committed any default under, any Material Contract, in each case except as would not have or reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

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        2.11     Liabilities.     None of the Acquired Corporations has, and none of the Acquired Corporations is or may become responsible for performing or discharging, any accrued, contingent or other liabilities of any nature, either matured or unmatured, except for: (a) liabilities reflected or reserved against on the Unaudited Interim Balance Sheet; (b) liabilities that have been incurred by the Acquired Corporations since the date of the Unaudited Interim Balance Sheet in the ordinary course of business; (c) liabilities for performance of obligations of the Acquired Corporation under Company Contracts, to the extent such liabilities are readily ascertainable (in nature, scope and amount) from the copies of such Company Contracts made available to Parent prior to the date of this Agreement; (d) liabilities incurred in connection with the negotiation, preparation, execution, and performance of this Agreement and the Contemplated Transactions; and (e) liabilities described in Part 2.11 of the Disclosure Schedule .

        2.12     Compliance with Legal Requirements.     Each of the Acquired Corporations is in compliance in all material respects with all applicable Legal Requirements, except for failures to comply or violations that have not had and would not reasonably be expected to have a Company Material Adverse Effect.

        2.13     Certain Business Practices.     The Acquired Corporations and each director, officer, employee and agent of the Acquired Corporations acting on behalf of the Acquired Corporations, is in compliance in all material respects with (a) applicable laws relating to illegal payments and bribes, (b) applicable laws relating to illegal political contributions, and (c) the Foreign Corrupt Practices Act of 1977, as amended, or the regulations promulgated thereunder, or any similar Legal Requirement.

        2.14     Governmental Authorizations.     

        (a)   The Acquired Corporations hold all material Governmental Authorizations necessary to enable the Acquired Corporations to conduct their respective businesses in the manner in which such businesses are currently being conducted. All such Governmental Authorizations are in full force and effect, except where the failure to have any such Governmental Authorization would not have or reasonably be expected to have a Company Material Adverse Effect. To the knowledge of the Company, no suspension, revocation or cancellation thereof has been threatened in writing, and there is no Legal Proceeding pending, or to the knowledge of the Company, threatened in writing, seeking the suspension, revocation or cancellation of any such Governmental Authorizations, except where the failure to have such Governmental Authorizations have not had and would not reasonably be expected to have a Company Material Adverse Effect.

        Each Acquired Corporation is in compliance in all material respects with the terms and requirements of such Governmental Authorizations, except for failures to comply or violations that have not had and would not reasonably be expected to have a Company Material Adverse Effect.

        (b)    Part 2.14(b) of the Disclosure Schedule accurately and completely describes the terms of each effective material grant, incentive or subsidy provided or made available to or for the benefit of any of the Acquired Corporations by any Governmental Body. Each of the Acquired Corporations is in compliance in all material respects with all of the terms and requirements of each grant, incentive and subsidy identified or required to be identified in Part 2.14(b) of the Disclosure Schedule , except for failures to comply or violations that have not had and would not reasonably be expected to have a Company Material Adverse Effect. Neither the execution, delivery or performance of this Agreement, nor the consummation of the Merger or any of the other Contemplated Transactions, will (with or without notice or lapse of time, or both) give any Person the right to revoke, withdraw, suspend, cancel, terminate or modify any grant, incentive or subsidy identified or required to be identified in Part 2.14(b) of the Disclosure Schedule , except for any such revocation, withdrawal, suspension, cancelation, termination or modification or other occurrences that, individually or in the aggregate, would not have or reasonably be expected to have a Company Material Adverse Effect.

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        2.15     Tax Matters.     

        (a)   Except as would not have or reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate, (i) each of the Acquired Corporations has filed all Tax Returns that it was required to file under applicable Legal Requirements, and (ii) all such Tax Returns were correct and complete in all respects; provided , however , that notwithstanding anything to the contrary, the foregoing shall not constitute a representation or warranty as to the existence, amount or any other aspect of the net operating or capital loss carryovers, carryforward of business or other Tax credits, Tax basis, earnings and profits or other Tax attribute of the Acquired Corporations.

        (b)   Except as would not have or reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate, (i) all Taxes due and owing by each of the Acquired Corporations (whether or not shown on any Tax Return) have been paid, other than Taxes being contested in good faith by appropriate proceedings and for which adequate reserves have been made, and (ii) each of the Acquired Corporations has withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

        (c)   Except as would not have or reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate, no claim has ever been made in writing by an authority in a jurisdiction where the Acquired Corporations do not file Tax Returns that any of them is or may be subject to taxation in that jurisdiction.

        (d)   Except as would not have or reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate, (i) none of the Acquired Corporations has received from any Governmental Body any (A) written notice indicating an intent to open an audit or other review, or (B) written notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any Governmental Body against any of the Acquired Corporations, in either case, that has not been resolved on or prior to the date hereof, and (ii) no Legal Proceedings are now proposed, pending, in progress, or to the knowledge of the Company, threatened in writing, against the Acquired Corporations.

        (e)   The Company has not been a United States real property holding corporation within the meaning of section 897(c)(2) of the Code during the applicable period specified in section 897(c)(1)(A)(ii) of the Code.

        (f)    No Acquired Corporation has participated in, or is currently participating in, (i) a "listed transaction" within the meaning of Treasury Regulations Section 1.6011-4(b) or (ii) to the knowledge of Company, a "reportable transaction" within the meaning of Treasury Regulations Section 1.6011-4 (or, in either case, under any similar provision under state, local or foreign law).

        (g)   Except as would not have or reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate, none of the Acquired Corporations is or has been a party to or bound by any Tax allocation, sharing or indemnity agreement pursuant to which any Acquired Corporation would have an obligation with respect to the Taxes of another person or entity following the Closing or that will not be terminated as of the Closing. Each of the Acquired Corporations has (A) not been a member of an affiliated group filing a consolidated, combined or unitary income Tax Return (other than a group the common parent of which was the Company) within the meaning of Section 1504(a) of the Code (or any similar provision of state, local or foreign law) and (B) no liability for the Taxes of any Person (other than any Acquired Corporation) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, or by contract, except as would not have or reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate.

        (h)   Except as would not have or reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate, the unpaid Taxes of the Acquired Corporations (i) did not, as of the date of the Unaudited Interim Balance Sheet, exceed the reserve for Tax liabilities (rather than any reserve for

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deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Unaudited Interim Balance Sheet, and (ii) do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Acquired Corporations in filing their Tax Returns. Since the date of the Unaudited Interim Balance Sheet, none of the Acquired Corporations has incurred any material liability for Taxes arising from extraordinary gains or losses, determined in accordance with GAAP, outside the ordinary course of business.

        (i)    Except as would not have or reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate, none of the Acquired Corporations will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting for a taxable period ending on or prior to the Closing Date; (ii) "closing agreement" as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (iii) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code; (iv) installment sale or open transaction disposition made on or prior to the Closing Date; or (v) prepaid amount received on or prior to the Closing Date.

        (j)    None of the Acquired Corporations was a "distributing corporation" or a "controlled corporation" in a transaction governed by or intended to be governed by Section 355 of the Code (or any similar provision under state, local or foreign law) (i) in the two years prior to the date of this Agreement or (ii) in a distribution which could otherwise constitute part of a "plan" or "series of related transactions" (within the meaning of Section 355 of the Code, or any similar provision under state, local or foreign law) in conjunction with the Merger.

        (k)   None of the Acquired Corporations has taken any action (or failed to take any action) or has any knowledge of any fact or circumstance that is reasonably likely to (i) prevent the transactions contemplated hereby, including the Merger, from qualifying as a reorganization within the meaning of Section 368(a) of the Code or (ii) prevent Parent from being treated as a "corporation" pursuant to Section 367(a) of the Code with respect to the Merger.

        (l)    Except as would not have or reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate, none of the Acquired Corporations waived any statute of limitations or agreed to any extension of time with respect to any assessment or deficiency of Tax.

        2.16     Employee and Labor Matters; Benefit Plans.     

        (a)    Part 2.16(a) of the Disclosure Schedule accurately identifies each employee of any of the Acquired Corporations who is not fully available to perform work because of disability or other leave and sets forth the basis of such disability or leave and the anticipated date of return to full service.

        (b)    Part 2.16(b) of the Disclosure Schedule accurately identifies each former employee of any of the Acquired Corporations who is receiving or is scheduled to receive (or whose spouse or other dependent is receiving or is scheduled to receive) any severance benefits (whether from any of the Acquired Corporations or otherwise) relating to such former employee's employment with any of the Acquired Corporations; and Part 2.16(b) of the Disclosure Schedule accurately describes such benefits.

        (c)   The Company has made available to Parent accurate and complete copies of all employee manuals and handbooks, disclosure materials, policy statements and other materials relating to the employment of the Company Associates.

        (d)   Except as set forth in Part 2.16(d) of the Disclosure Schedule , none of the Acquired Corporations is a party to, bound by, or has a duty to bargain for, any collective bargaining agreement or other Contract with a labor organization representing any of its employees, and there are no labor organizations representing, purporting to represent or, to the best of the knowledge of the Company, seeking to represent any employees of any of the Acquired Corporations.

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        (e)   Except as set forth in Part 2.16(e) of the Disclosure Schedule , there has never been, nor has there been any threat of, any strike, slowdown, work stoppage, lockout, job action, union organizing activity, question concerning representation or any similar activity or dispute, affecting any of the Acquired Corporations or any of their employees. No event has occurred, and no condition or circumstance exists, that might directly or indirectly give rise to or provide a basis for the commencement of any such strike, slowdown, work stoppage, lockout, job action, union organizing activity, question concerning representation or any similar activity or dispute.

        (f)    None of the Acquired Corporations is or has ever been engaged, in any material unfair labor practice within the meaning of the National Labor Relations Act. There is no Legal Proceeding, claim, labor dispute or grievance pending or, to the best of the knowledge of the Company, threatened or reasonably anticipated relating to any employment contract, privacy right, labor dispute, wages and hours, leave of absence, plant closing notification, workers' compensation policy, long-term disability policy, harassment, retaliation, immigration, employment statute or regulation, safety or discrimination matter involving any Company Associate, including charges of unfair labor practices or discrimination complaints.

        (g)   To the knowledge of the Company, no current or former independent contractor of any of the Acquired Corporations could be deemed to be a misclassified employee. To the knowledge of the Company, the Acquired Companies (i) are in material compliance with all applicable Legal Requirements with respect to employment, employment practices, terms and conditions of employment and wages and hours, in each case with respect to their respective current and former employees, (ii) have withheld and reported all amounts required by law or by agreement to be withheld and reported with respect to wages, salaries and other payments to employees, (iii) are not liable for any arrears of wages beyond the current pay period or any taxes or any penalty for material failure to comply with any of the foregoing, and (iv) are not liable for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Body, with respect to unemployment compensation benefits, social security or other benefits or obligations to employees (other than routine payments to be made in the normal course of business and consistent with past practice), except, in each case, as would not have a material adverse effect, alone or in the aggregate.

        (h)    Part 2.16(h) of the Disclosure Schedule contains an accurate and complete list as of the date hereof of each Company Benefit Plan and each Company Benefit Agreement. None of the Acquired Corporations has any plan or commitment to create any additional Company Benefit Plan, or to modify or change any existing Company Benefit Plan (other than to comply with applicable Legal Requirements as previously disclosed to Parent in writing or as expressly contemplated by this Agreement) in a manner that would affect any Company Associate.

        (i)    With respect to each Company Benefit Plan, the Company has made available to Parent: (i) an accurate and complete copy of all documents setting forth the terms of such Company Benefit Plan, including all amendments thereto and all related trust documents; (ii) a complete and accurate copy of the latest annual report (Form Series 5500 and all schedules and financial statements attached thereto), if any, required under ERISA or the Code, with respect to such Company Benefit Plan; (iii) the most recent summary plan description together with the summaries of material modifications thereto, if any, required under ERISA with respect to such Company Benefit Plan; (iv) if such Company Benefit Plan is funded through a trust or any third party funding vehicle, an accurate and complete copy of the trust or other funding agreement (including all amendments thereto) and accurate and complete copies of the most recent financial statements thereof; (v) accurate and complete copies of all Contracts relating to such Company Benefit Plan, including service provider agreements and insurance contracts; (vi) all material correspondence, if any, to or from any Governmental Body relating to such Company Benefit Plan; (vii) all forms required under COBRA; and (viii) if such Company Benefit Plan is intended to be qualified under Section 401(a) of the Code, the most recent IRS determination letter (or opinion letter, if applicable) received with respect to such Company Benefit Plan.

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        (j)    Except for violations that, individually, on the aggregate, would not reasonably be expected to have a Company Material Adverse Effect, (i) each of the Company Benefit Plans has been operated and administered in all material respects in accordance with its terms and with applicable Legal Requirements, including ERISA, the Code, and applicable U.S. securities laws and regulations; (ii) to the best of the knowledge of the Company, each of the Acquired Corporations and Company Affiliates have performed all obligations required to be performed by them under each Company Benefit Plan, and none of the Acquired Corporations is in default or violation of the terms of any Company Benefit Plan; and (iii) to the best of the knowledge of the Company, there has been no default or violation by any other party with respect to any term of any Company Benefit Plan. Any Company Benefit Plan intended to be qualified under Section 401(a) of the Code has obtained a favorable determination letter (or opinion letter, if applicable) as to its qualified status under the Code, and the Company is not aware of any event, condition or circumstance that could reasonably be expected to result in disqualification under the Code. No "prohibited transaction," within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA (other than a transaction exempt under Section 408 of ERISA or guidance from the DOL) has occurred with respect to any Company Benefit Plan that could subject the acquired corporation to a material tax or penalty. There are no material claims or material Legal Proceedings pending, or, to the best of the knowledge of the Company, threatened or reasonably anticipated (other than routine claims for benefits), against any Company Benefit Plan or against the assets of any Company Benefit Plan. To the best of the knowledge of the Company, no material breach of fiduciary duty has occurred with respect to which any Acquired Corporation or any of its fiduciaries could reasonably be expected to incur a material liability. Each Company Benefit Plan (other than any Company Benefit Plan to be terminated prior to the Closing in accordance with this Agreement or any Company Benefit Agreement) can be amended, terminated or otherwise discontinued after the Effective Time in accordance with its terms, without liability to Parent, the Acquired Corporations or any Company Affiliate (other than ordinary administration expenses). No Company Benefit Plan is under audit or investigation, or is subject to any other Legal Proceeding commenced by the IRS, the DOL or any other Governmental Body, nor is any such audit, investigation or other Legal Proceeding pending or, to the best of the knowledge of the Company, threatened. No mortgage, lien, pledge, charge, security interest or other Encumbrance of any kind has been imposed under the Code or ERISA with respect to any Company Benefit Plan or any of the assets of any Company Benefit Plan. All contributions, premiums and expenses to or in respect of each Company Benefit Plan have been paid in full or, to the extent not yet due, have been adequately accrued on the Unaudited Interim Balance Sheet.

        (k)   None of the Acquired Corporations nor any Company Affiliate has ever maintained, established, sponsored, participated in, or contributed to any: (i) Company Benefit Plan subject to Section 302 or Title IV of ERISA or Section 412 of the Code; (ii) "multiemployer plan" within the meaning of Section 3(37) of ERISA; (iii) "multiple employer plan" (within the meaning of Section 413(c) of the Code); or (iv) Company Benefit Plan in which stock of any of the Acquired Corporations or any Company Affiliate is or was held as a "plan asset" within the meaning of DOL Regulations Section 2510.3-101. Except as otherwise set forth in Part 2.16(k) of the Disclosure Schedule , neither the execution of this Agreement, nor the consummation of any of the Contemplated Transactions, will cause any of the assets or insurance obligations to be less than the benefit obligations under such Company Benefit Plan or Foreign Plan.

        (l)    Except as set forth in Part 2.16(l) of the Disclosure Schedule , no Company Benefit Plan provides (except at no cost to the Acquired Corporations or any Company Affiliate), or reflects or represents any liability of any of the Acquired Corporations or any Company Affiliate to provide, retiree life insurance, retiree health benefits or other retiree employee welfare benefits to any Person for any reason, except as may be required by COBRA or other applicable Legal Requirements. Except as set forth in Part 2.16(l) of the Disclosure Schedule , other than commitments made that involve no future costs to any of the Acquired Corporations or any Company Affiliate, no Acquired Corporations nor any Company Affiliate has ever represented, promised or contracted (whether in oral or written form) to any Company Associate (either individually or as a part of a group of Company Associates) or any other Person that such Company

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Associate or other person would be provided with retiree life insurance, retiree health benefit or other retiree employee welfare benefits, except to the extent required by applicable Legal Requirements.

        (m)  Except as set forth in Part 2.16(m) of the Disclosure Schedule , neither the execution of this Agreement nor the consummation of any of the Contemplated Transactions (either alone or in combination with another event, whether contingent or otherwise) will (i) result in any bonus, severance or other payment or obligation to any Company Associate (whether or not under any Company Benefit Plan); (ii) materially increase the benefits payable or provided to, or result in a forgiveness of any indebtedness of, any Company Associate; (iii) accelerate the vesting, funding or time of payment of any compensation, equity award or other similar benefit; (iv) result in any "parachute payment" under Section 280G of the Code (whether or not such payment is considered to be reasonable compensation for services rendered); or (v) cause any compensation to fail to be deductible under Section 162(m) of the Code or any other provision of the Code or any similar foreign Legal Requirement.

        (n)   Except as set forth in Part 2.16(n) of the Disclosure Schedule , and except for violations that, individually, or in the aggregate, would not reasonably be expect to have a Company Material Adverse Effect each of the Acquired Corporations and Company Affiliates: (i) is, and at all times has been, in compliance in all material respects with all applicable Legal Requirements respecting employment, employment practices, terms and conditions of employment and wages and hours, in each case, with respect to Company Associates, including the health care continuation requirements of COBRA, the requirements of FMLA, the requirements of HIPAA and any similar provisions of state law; (ii) has withheld and reported all amounts required by any Legal Requirement or Contract to be withheld and reported with respect to wages, salaries and other payments to any Company Associate; (iii) has no liability for any arrears of wages or any Taxes or any penalty for failure to comply with the Legal Requirements applicable to any of the foregoing; and (iv) has no liability for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Body with respect to unemployment compensation benefits, social security or other benefits or obligations for any Company Associate (other than routine payments to be made in the normal course of business and consistent with past practice). None of the Acquired Corporations has effectuated a "plant closing," partial "plant closing," "mass layoff," "relocation" or "termination" (each as defined in the Worker Adjustment and Retraining Notification Act (the "WARN Act" ) or any similar Legal Requirement) affecting any site of employment or one or more facilities or operating units within any site of employment or facility of any of the Acquired Corporations.

        (o)   To the best of the knowledge of the Company, no stockholder nor any Company Associate is obligated under any Contract or subject to any judgment, decree, or order of any court or other Governmental Body that would interfere with such Person's efforts to promote the interests of the Acquired Corporations or that would interfere with the businesses of the Acquired Corporations or any Company Affiliate.

        (p)    Part 2.16(p) of the Disclosure Schedule sets forth each Company Benefit Plan that is in effect as of the date of this Agreement and provides any compensation that could be deemed deferred compensation within the meaning of Section 409A of the Code, and each such Plan (1) would not be reasonably expected to trigger any taxes or penalties under Section 409A of the Code, (2) has been operated since January 1, 2005 in good faith compliance with Section 409A of the Code and all applicable IRS guidance promulgated thereunder to the extent such plan is subject to Section 409A of the Code, and (3) as to any such plan in existence prior to January 1, 2005 and not subject to Section 409A of the Code, has not been "materially modified" (within the meaning of IRS Notice 2005-1) at any time after October 3, 2004.

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        2.17     Environmental Matters.     

        (a)   Except as set forth in Part 2.17(a) of the Disclosure Schedule , each of the Acquired Corporations is in material compliance with, and has no material liability under, any applicable Environmental Requirements (as defined in Section 2.17(d)).

        (b)   Except as set forth in Part 2.17(b) of the Disclosure Schedule , no Acquired Corporation has Released or transported any Materials of Environmental Concern except in compliance in all material respects with any applicable Environmental Requirement.

        (c)   Except as set forth in Part 2.17(c) of the Disclosure Schedule , none of the Acquired Corporations has received any written notice or other written communication, from a Governmental Body or any other Person, regarding any of the Acquired Corporations' alleged noncompliance with, or liability under, any Environmental Requirement.

        (d)   For purposes of this Agreement: (i)  "Environmental Requirement" means any Legal Requirement relating to pollution or protection of natural resources or the environment (including ambient air, surface water, ground water, land surface or subsurface strata), including any Legal Requirement relating to emissions, discharges, releases or threatened releases of Materials of Environmental Concern, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern; (ii)  "Materials of Environmental Concern" include pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products and any other substance that is regulated by any Environmental Requirement; and (iii)  "Release" means any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping or other releasing into the environment, whether intentional or unintentional.

        2.18     Insurance.     

        (a)   The Company has made available to Parent accurate and complete copies of all material insurance policies and all material self insurance programs and arrangements relating to the business, assets, liabilities and operations of the Acquired Corporations. Except as would not have or reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and subject to expirations and renewals of insurance policies in the ordinary course of business, each of such insurance policies is in full force and effect, and all premiums due thereon have been paid in full (other than retrospective premiums which may be payable with respect to workers' compensation insurance policies). Except as set forth in Part 2.18(a) of the Disclosure Schedule , since August 31, 2008, none of the Acquired Corporations has received any written notice regarding any actual or possible: (i) cancellation or invalidation of any insurance policy; (ii) refusal or denial of any coverage, reservation of rights or rejection of any material claim under any insurance policy; or (iii) material adjustment in the amount of the premiums payable with respect to any insurance policy. Except as set forth in Part 2.18(a) of the Disclosure Schedule , there is no pending workers' compensation or other claim under or based upon any insurance policy of any of the Acquired Corporation, in each case, in excess of $75,000. Except as set forth in Part 2.18(a) of the Disclosure Schedule , since August 31, 2008, the Company has provided timely written notice to the appropriate insurance carrier(s) of each Legal proceeding pending or threatened against any of the Acquired Corporations, and no such carrier has issued a denial of coverage or a reservation of rights with respect to any such Legal Proceeding, or informed any of the Acquired Corporations of its intent to do so.

        (b)   The Company has made available to Parent accurate and complete copies of the existing policies (primary and excess) of directors' and officers' liability insurance maintained by the Company as of the date of this Agreement.

        2.19     Transactions with Affiliates.     Except as set forth in the Company SEC Documents or in Part 2.19 of the Disclosure Schedule , since the date of the Company's last proxy statement filed with the

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SEC, no event has occurred that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC.

        2.20     Legal Proceedings; Orders.     

        (a)   Except as disclosed in the Company SEC Documents or as set forth in Part 2.20(a) of the Disclosure Schedule , there is no pending Legal Proceeding, and (to the best of the knowledge of the Company) no Person has threatened to commence any Legal Proceeding: (i) that involves any of the Acquired Corporations or any of the assets owned or used by any of the Acquired Corporations, that if determined or resolved adversely to the Acquired Corporations, would have or would reasonably be expected to have a Company Material Adverse Effect; or (ii) that, as of the date of this Agreement, challenges, or may have the effect of preventing, materially delaying or making illegal the Merger or any of the other Contemplated Transactions.

        (b)   The Company has not received any order, writ, injunction, judgment or decree to which any of the Acquired Corporations, or any of the assets owned or used by any of the Acquired Corporations, is subject.

        2.21     Inapplicability of Anti-takeover Statutes.     The Company Board has taken all actions necessary to ensure that the restrictions applicable to business combinations contained in Section 203 of the DGCL are inapplicable to the execution, delivery and performance of this Agreement and the Voting Agreements and to the consummation of the Merger and the other Contemplated Transactions. No other state takeover statute or similar Legal Requirement applies or purports to apply to the Merger, this Agreement, the Voting Agreements or any of the other Contemplated Transactions.

        2.22     Vote Required.     The affirmative vote of the holders of a majority of the shares of Company Common Stock outstanding on the record date for the Company Stockholders' Meeting and entitled to vote (the "Required Stockholder Vote" ) is the only vote of the holders of any class or series of the Company's capital stock necessary to adopt or approve this Agreement and approve the Merger or the other Contemplated Transactions.

        2.23     Non-Contravention; Consents.     (a) Subject to obtaining the Required Stockholder Vote and compliance with the requirements specified in Section 2.22(b) and except as set forth in Part 2.23(a) of the Disclosure Schedule , neither (x) the execution, delivery or performance of this Agreement, nor (y) the consummation of the Merger or any of the other Contemplated Transactions, will directly or indirectly (with or without notice or lapse of time):

        (i)    contravene, conflict with or result in a violation of any of the provisions of the certificate of incorporation, bylaws or other charter or organizational documents of any of the Acquired Corporations;

        (ii)   contravene, conflict with or result in a violation of any Legal Requirement to which any of the Acquired Corporations, or any of the assets owned or used by any of the Acquired Corporations, is subject;

        (iii)  contravene, conflict with or result in a violation or breach of, or result in a default under or require notice to or the consent of any Person under, any provision of any Material Contract, or give any Person the right to: (a) declare a default under any Material Contract; (b) accelerate the maturity or performance of any Material Contract; or (c) cancel, terminate or modify any term of any Material Contract; or

        (iv)  result in the imposition or creation of any Encumbrance upon or with respect to any asset owned or used by any of the Acquired Corporations (except for minor liens that will not, in any case or in the aggregate, materially detract from the value of the assets subject thereto or impair the operations of any of the Acquired Corporations);

         provided, however , that except in the case of clauses (ii), (iii) and (iv) above, for any such contraventions, conflicts, violations, breaches, defaults, terminations, accelerations, modifications or cancellations or other occurrences and for any consents or waivers not obtained, that, individually or in the aggregate, would not have or reasonably be expected to have a Company Material Adverse Effect.

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        (b)   Except as set forth in Part 2.23(b) of the Disclosure Schedule and as may be required by the Exchange Act, the DGCL, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act" ) and any foreign antitrust Legal Requirement and the NASD Bylaws (as they relate to the Form F-4 Registration Statement and the Prospectus/Proxy Statement), none of the Acquired Corporations was, is or will be required to make any filing with or give any notice to, or to obtain any Consent from, any Person or Governmental Body in connection with (x) the execution, delivery or performance of this Agreement, or (y) the consummation of the Merger or any of the other Contemplated Transactions, except, in each case, for any filings or notification, the failure of which to be obtained, individually or in the aggregate, would not have or reasonably be expected to have a Company Material Adverse Effect.

        2.24     Company Fairness Opinion.     The Company Board has received the written opinion or oral opinion to be confirmed in writing of Houlihan Lokey Howard & Zukin Capital, Inc., financial advisor to the Company (the "Company Financial Advisor" ), to the effect that, based upon and subject to the assumptions, qualifications and limitations set forth therein, as of the date of such opinion, the Exchange Ratio is fair, from a financial point of view, to the stockholders of the Company. The Company will promptly make such opinion available to Parent upon receipt.

        2.25     Financial Advisor.     Except for the Company Financial Advisor, no broker, finder or investment banker is entitled to any brokerage fee, finder's fee, opinion fee, success fee, transaction fee or other fee or commission in connection with the Merger or any of the other Contemplated Transactions based upon arrangements made by or on behalf of any of the Acquired Corporations. The Company has made available to Parent accurate and complete copies of all agreements under which any such fees, commissions or other amounts have been paid or may become payable and all indemnification and other agreements related to the engagement of the Company Financial Advisor.

        2.26     Registration Statement; Prospectus/Proxy Statement.     None of the information supplied or to be supplied by or on behalf of the Company for inclusion or incorporation by reference in the Form F-4 Registration Statement or in any Other SEC Filing will, at the time the Form F-4 Registration Statement or Other SEC Filing becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by or on behalf of the Company for inclusion or incorporation by reference in the Prospectus/Proxy Statement will, at the time the Prospectus/Proxy Statement is mailed to the stockholders of the Company or at the time of the Company Stockholders' Meeting (or any adjournment or postponement thereof), contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing provisions in this Section 2.26, no representation or warranty is made by the Company with respect to information or statements supplied by Parent or Merger Sub for inclusion or incorporation by reference in the Form F-4 Registration Statement or the Prospectus/Proxy Statement.

        2.27     Compliance with Health Care Laws.     

        The Company and each of its Affiliates is in material compliance with all relevant federal and other health care Legal Requirements applicable to the Company and the Company's products, including the federal criminal anti-fraud and abuse statute (42 U.S.C. § 1320a-7b), all other Legal Requirements prohibiting false statements and improper remuneration for purchasing services or products, the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the federal health care programs exclusion laws, SSA § 1128 (42 U.S.C. § 1320a-7) and the regulations promulgated pursuant to such laws and regulations, relating to the regulation of the Company and the Company's products.

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        2.28     FDA Compliance.     

        (a)   The Company has obtained each federal, state, county, local or non-U.S. Governmental Authorizations (including 510(k), PMA and any other Governmental Authorization), or is exempt therefrom, that may be required by the FDA or any other Governmental Body engaged in the regulation of the Company's products. Part 2.28(a) of the Disclosure Schedule lists all annual establishment manufacturing registration and device listing, annual reports and similar regulatory filing requirements that are required to be filed in order to reasonably be expected to maintain any Governmental Authorization and manufacturing facility registrations or licenses and where failure to timely file would result in a Company Material Adverse Effect. The Company has not received any notice or written communication with respect to the Company's business from any Governmental Body regarding, and, to the knowledge of the Company, there are no facts or circumstances that are likely to give rise to, (i) any material violation of applicable Legal Requirements or material adverse change in any Governmental Authorization, or any failure to materially comply with any applicable Legal Requirement or any term or requirement of any Government Authorization or (ii) any revocation, withdrawal, suspension, cancellation, limitation, termination or modification of any Government Authorization.

        (b)   The operation of the Company's business, including the manufacture, import, export, testing, development, processing, packaging, labeling, storage, marketing, and distribution of all the Company products, is and at all times has been in material compliance with all applicable Legal Requirements, Governmental Authorizations and orders including those administered by the FDA for products sold in the United States. There is no actual or, to the knowledge of the Company, threatened material action or investigation in respect of the Company's business by the FDA or any other Governmental Body which has jurisdiction over the operations, properties, products or processes of the Company, or, to the knowledge of the Company, by any third parties acting on their behalf. The Company has no knowledge that any Governmental Body is considering such action or investigation or of any facts or circumstances that are likely to give rise to any such action or investigation.

        (c)   Except as set forth in Part 2.28(c) of the Disclosure Schedule , during the three (3) year period ending on the Closing Date, the Company has not had any product or manufacturing site subject to a Governmental Body (including FDA) shutdown or import or export prohibition, nor received any FDA Form 483 or other Governmental Body notice of inspectional observations, "warning letters," "untitled letters" or, to the knowledge of the Company, requests or requirements to make changes to the operations of the Company's business or the Company's products that if not complied with, would reasonably be expected to result in a Company Material Adverse Effect, or similar correspondence or written notice from the FDA or other Governmental Body in respect of the Company's business and alleging or asserting noncompliance with any applicable Legal Requirements or Governmental Authorizations, and, to the knowledge of the Company, neither the FDA nor any Governmental Body is considering such action. Except as set forth in Part 2.28(c) of the Disclosure Schedule , during the three (3) year period ending on the Closing Date, no vigilance report or medical device report with respect to the Company's products has been reported by the Company, and to the knowledge of the Company, no vigilance report or medical device report is under investigation by any Governmental Body with respect to the Company's Products.

        (d)   All studies, tests and preclinical tests and clinical trials in respect of the Company's business being conducted by or on behalf of the Company that have been or will be submitted to any Governmental Body, including the FDA and its counterparts worldwide, including in the European Union, in connection with any Governmental Authorizations, are being or have been conducted in compliance in all material respects with applicable Legal Requirements. The Company has not received any notices, correspondence or other communication in respect of the Company's business from the FDA or any other Governmental Body requiring the termination or suspension of any clinical trials conducted by, or on behalf of, the Company or in which the Company has participated, and to the knowledge of the Company, neither the FDA nor any other Governmental Body is considering such action. The Company has not received specific written notification from a Governmental Body of the rejection of data obtained from any clinical trials conducted

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by, or on behalf of, the Company or in which the Company has participated with respect to the Company's business or the Company's products, which data were submitted to the Governmental Body and which were necessary to obtain regulatory approval or clearance of a particular Company product.

        (e)   The manufacture of the Company's products by, or on behalf of, the Company is being conducted in compliance in all material respects with all applicable Legal Requirements including the FDA's Quality System Regulation at 21 C.F.R. Part 820 for products sold in the United States, and the respective counterparts thereof promulgated by any Governmental Body in countries outside the United States. The Company is in material compliance with all applicable Legal Requirements and certifications currently held by the Company governing quality systems and manufacturing processes. To the knowledge of the Company, any third party assembler, sterilizer or manufacturer of the Company's products is in material compliance with all applicable Legal Requirements governing those third parties' activities, including Legal Requirements set forth in 21 C.F.R. Part 807 and 21 C.F.R. Part 820 for products sold in the United States and all other similar applicable Legal Requirements.

        (f)    The Company is not the subject of any pending or, to the knowledge of the Company, threatened investigation in respect of the Company's business by the FDA pursuant to its "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities" Final Policy set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any amendments thereto. To its knowledge, the Company has not committed any act, made any statement, or failed to make any statement, in each case in respect of the Company's business, that would provide a basis for the FDA to invoke its policy with respect to "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities" and any amendments thereto. Neither the Company, nor, to its knowledge, any of its officers, employees or agents has been convicted of any crime or engaged in any conduct that could result in a material debarment or exclusion (i) under 21 U.S.C. Section 335a, or (ii) any similar applicable state Legal Requirement. To the knowledge of the Company, no debarment proceedings or investigations in respect of the Company's business are pending or threatened against the Company or any of its officers, employees or agents.

        (g)   There is no pending, nor to the knowledge of the Company, threatened, proceeding, informational inquiry or investigation under Medicare, Medicaid or any other government-sponsored health care program (collectively, "Government Programs" ) involving the Company, nor is the Company aware of any pending, or to the knowledge of the Company, threatened, proceeding, informational inquiry or investigation under any private third party health care insurance program (collectively, "Private Insurance Programs" ) involving the Company. To the Company's knowledge, the Company's sales and marketing practices are, and since January 1, 2004, have been, in compliance in all material respects with all applicable Legal Requirements and all policies of applicable Private Insurance Programs. To the Company's knowledge, the Company has not arranged with or contracted with (by employment or otherwise) any person who is excluded from participation in any Government Program for the provision of items or services for which payment may be made under any such Government Program. To the Company's knowledge, none of the officers, directors, agents or managing employees (as such term is defined in 42 U.S.C. Section 1320a-5(b)) of the Company has been excluded from any Government Program or been subject to sanction pursuant to 42 U.S.C. Section 1320a-7a or 1320a-8 or been convicted of a crime described at 42 U.S.C. Section 1320a-7b.

        SECTION 3.     R EPRESENTATIONS AND W ARRANTIES OF P ARENT AND M ERGER S UB     

        Except as set forth (i) in the Parent Disclosure Schedule or (ii) in the Filed Parent SEC Documents, (other than disclosures in the "Risk Factors" or "Forward Looking Statements" sections of any such reports or other forward-looking statements set forth in such reports) Parent and Merger Sub represent and warrant to the Company as follows:

        3.1     Subsidiaries; Due Organization; Etc.     Parent has no Subsidiaries, except for the Entities identified in Part 3.1(a)(i) of the Parent Disclosure Schedule ; and neither Parent nor any of the other Entities identified in Part 3.1(a)(i) of the Parent Disclosure Schedule owns any capital stock of, any equity

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or similar interest of any nature in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest of any nature in, any other Entity, other than the Entities identified in Part 3.1(a)(ii) of the Parent Disclosure Schedule (which includes a description of the interest and the percentage owned). Neither Parent nor any of the Entities identified in Part 3.1(a)(i) of the Parent Disclosure Schedule (collectively with Parent, the "Parent Entities" ) has agreed or is obligated to make, or is bound by any Contract under which it may become obligated to make, any future investment in or capital contribution to any other Entity. None of the Parent Entities has, at any time, been a general partner of, or has otherwise been liable for any of the debts or other obligations of, any general partnership, limited partnership or other Entity.

        (b)   Each of the Parent Entities is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has all necessary power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; and (ii) to own and use its assets in the manner in which its assets are currently owned and used, except in each case, the absence of which would not, individually, or in the aggregate, have or reasonably be expected to have a Parent Material Adverse Effect.

        (c)   Each of the Parent Entities is qualified to do business as a foreign entity, and is in good standing, under the laws of all jurisdictions where the nature of its business requires such qualification, except as would not, individually, or in the aggregate, have or reasonably be expected to have a Parent Material Adverse Effect.

        3.2     Certificate of Incorporation; Bylaws; Charters and Codes of Conduct.     Parent has made available to the Company accurate and complete copies of the certificate of incorporation, bylaws and other charter and organizational documents of the respective Parent Entities, including all amendments thereto, as currently in effect. Parent has made available to the Company accurate and complete copies of: (a) the charters of all committees of the Parent Board; and (b) any code of conduct or similar policy adopted by any of the Parent Entities or by the board of directors, or any committee of the board of directors, of any of the Parent Entities as currently in effect. Parent is not in breach or violation of its certificate of incorporation, by-laws or other charter and organizational documents. None of the Parent Subsidiaries is in breach or violation of its respective certificate of incorporation, by-laws or other charter and organizational documents, except as would not reasonably be expected to have a Parent Material Adverse Effect.

        3.3     Capitalization, Etc.     

        (a)   The authorized capital stock of Parent consists of 100,000,000 Parent Shares, of which 27,536,561 shares have been issued and are outstanding and of which 1,251,174 shares are held by Parent in its treasury, each as of the date of this Agreement. Except as set forth in Part 3.3(a)(i) of the Parent Disclosure Schedule , Parent does not hold any shares of its capital stock in its treasury. All of the outstanding Parent Shares have been duly authorized and validly issued, and are fully paid and nonassessable. There are no Parent Shares held by any of the other Parent Entities. Except as set forth in Part 3.3(a)(ii) of the Parent Disclosure Schedule as of the date of this Agreement: (i) none of the outstanding Parent Shares is entitled or subject to any preemptive right, right of participation or any similar right; (ii) none of the outstanding Parent Shares is subject to any right of first refusal in favor of Parent; and (iii) there is no Parent Contract relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or granting any option or similar right with respect to), any Parent Shares. None of the Parent Entities is under any obligation, or is bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding Parent Shares or other securities. Part 3.3(a)(iii) of the Parent Disclosure Schedule accurately describes as of the date of this Agreement, all repurchase rights held by the Company with respect to Parent Shares (including shares issued pursuant to the exercise of stock options), and specifies which of those repurchase rights are currently exercisable.

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        (b)   As of the date of this Agreement: (i) 3,577,698 Parent Shares are subject to outstanding options to purchase Parent Shares and restricted stock units or similar rights granted on Parent Shares (collectively "Parent Award(s)" ) and 2,149,897 Parent Shares are reserved for future Parent Award grants under the Syneron Medical Ltd. Share Option Plan 2003, the Syneron Medical Ltd. The 2004 Israel Stock Option Plan and the Syneron Medical Ltd. 2004 Stock Incentive Plan (collectively, the "Parent Stock Plans" ). Part 3.3(b) of the Parent Disclosure Schedule sets forth the following information with respect to each Parent Award outstanding as of the date of this Agreement: (A) the particular Parent Stock Plan (if any) pursuant to which such Parent Award was granted; (B) the name of the grantee; (C) the number of Parent Shares subject to such Parent Awards; (D) the exercise price of such Parent Award; (E) the date on which such Parent Award was granted; (F) the extent to which such Parent Award is vested and exercisable as of the date of this Agreement; (G) the date on which such Parent Award expires; and (H) whether such Parent Award is an "incentive stock option" (as defined in the Code), a non-qualified stock option or a restricted stock unit. Parent has made available to the Company accurate and complete copies of all the Parent Stock Plans pursuant to which any of the Parent Entities has ever granted Parent Awards, and the forms of all standard Parent Award agreements evidencing such grants.

        (c)   Except as set forth in Part 3.3(b) of the Parent Disclosure Schedule there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of any of the Parent Entities or any stock appreciation rights or similar rights; or (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of any of the Parent Entities, except in each case, in the ordinary course of business of the Parent Entities with respect to obligations between or among the Parent Entities.

        (d)   To the knowledge of the Parent, all outstanding shares of Parent Common Stock, options, warrants and other securities of the Parent Entities have been issued and granted in compliance with all applicable securities laws and other applicable Legal Requirements.

        (e)   All of the outstanding shares of capital stock of each of Parent's Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof, and are owned beneficially and of record by Parent, free and clear of any Encumbrances, other than with respect to applicable Legal Requirements.

        3.4     Authority; Binding Nature of Agreement.     

        (a)   Parent and Merger Sub have all necessary corporate power and authority to enter into and to perform their respective obligations under this Agreement. The Parent Board (at a meeting duly called and held) has: (a) determined that the Merger is advisable; (b) authorized and approved the execution, delivery and performance of this Agreement by the Company and Merger Sub; and (c) authorized and approved the issuance of Parent Shares pursuant to the terms of this Agreement. This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming the due authorization, execution and delivery by the Company, constitutes the legal, valid and binding obligation of Parent and Merger Sub enforceable against Parent and Merger Sub in accordance with its terms, except for the Bankruptcy and Equity Exception.

        (b)   No other corporate proceedings or the part of Parent or Merger Sub are necessary to approve or adopt this Agreement and to consummate the Contemplated Transactions.

        3.5     SEC Filings; Financial Statements.     

        (a)   Parent has made available to the Company accurate and complete copies of all registration statements, proxy statements, Certifications and other statements, reports, schedules, forms and other documents (including documents incorporated by reference therein) filed by Parent with the SEC since December 31, 2008 (the "Parent SEC Documents" ) as well as all comment letters received by Parent from the SEC since December 31, 2008 and all responses to such comment letters provided to the SEC by or on

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behalf of Parent. All statements, reports, schedules, forms and other documents required to have been filed by Parent with the SEC have been so filed on a timely basis. None of Parent's Subsidiaries is required to file any documents with the SEC. As of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the Parent SEC Documents complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act (as the case may be); and (ii) none of the Parent SEC Documents at the time they were filed with the SEC contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Each of the principal executive officer of Parent and the principal financial officer of Parent (or each former principal executive officer of Parent and each former principal financial officer of Parent, as applicable) has made the Certifications which at the time made were accurate and complete, and complied as to form and content with all applicable Legal Requirements. As used in this Section 3, the term "file" and variations thereof shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.

        (b)   Parent maintains disclosure controls and procedures that satisfy the requirements of Rule 13a-15 under the Exchange Act. Such disclosure controls and procedures are designed to ensure that all material information concerning Parent, including its consolidated Subsidiaries, is made known on a timely basis to the individuals responsible for the preparation of Parent's filings with the SEC and other public disclosure documents. Parent has made available to the Company accurate and complete copies of, all written descriptions of, and all policies, manuals and other documents promulgating such disclosure controls and procedures. Parent is in material compliance with the applicable listing and other rules and regulations of Nasdaq and has not received any notice from Nasdaq asserting any non-compliance with such rules and regulations.

        (c)   Parent's principal executive officer and its principal financial officer have disclosed, based on their most recent evaluation, to Parent's outside auditors and the audit committee of the Parent Board (i) any significant deficiency or material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Parent's ability to record, process, summarize and report financial data and, (ii) any fraud, whether or not material, that involves management or other employees who have a role in Parent's control over financial reporting. Since December 31, 2008, there has not been any material change in Parent's internal control over financial reporting.

        (d)   The financial statements (including any related notes) contained or incorporated by reference in the Parent SEC Documents: (i) complied as to form as of the respective dates of filing of such Parent SEC Documents with the SEC, in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements, and except that any unaudited financial statements provided to the Company may not contain footnotes and are subject to normal and recurring year-end adjustments that will not, individually or in the aggregate, be material in amount), and (iii) fairly present, in all material respects, the consolidated financial position of Parent and its consolidated Subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows of Parent and its consolidated Subsidiaries for the periods covered thereby (subject, in the case of unaudited statements, to notes and normal year-end audit adjustments that were not, or with respect to any such financial statements contained in any Parent SEC Documents to be filed subsequent to the date hereof are not expected to be, material in amount or effect). No financial statements of any Person other than the Parent Entities are required by GAAP to be included in the consolidated financial statements of Parent.

        (e)   Parent has made available to the Company accurate and complete copies of the documentation creating or governing "off-balance sheet arrangements" (as defined in Item 303(a)(4)(ii) of

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Regulation S-K under the Exchange Act) effected by any of the Parent Entities during any period covered by any of the Parent SEC Documents.

        3.6     Absence of Changes.     Except as disclosed on the Parent SEC Documents or set forth in Part 3.6 of the Parent Disclosure Schedule or as expressly contemplated by this Agreement, since December 31, 2008 through the date of this Agreement:

        (a)   there has not been any Parent Material Adverse Effect, and no event has occurred or circumstance arisen that would reasonably be expected to have or result in a Parent Material Adverse Effect;

        (b)   there has not been any material loss, damage or destruction to, or any material interruption in the use of, any of the assets of any of the Parent Entities (whether or not covered by insurance) which has had or would reasonably be expected to have a Parent Material Adverse Effect;

        (c)   none of the Parent Entities has: (i) declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of capital stock; or (ii) repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities; and

        (d)   none of the Parent Entities has: (i) made or changed any Tax election; (ii) adopted or changed any accounting method relating to Taxes; (iii) compromised or settled any Tax liability; or (iv) consented to any waiver or extension of the limitations period applicable to any Taxes or Tax Returns, in each case, which has had or would reasonably be expected to have a Parent Material Adverse Effect;

        (e)   none of the Parent Entities has entered into any material transaction or Contract outside of the ordinary course of business.

        3.7     Vote Required.     No vote or consent of the holders of any class or series of capital stock of Parent is necessary to approve this Agreement or the Merger or the Contemplated Transactions. The vote or consent of Parent as the sole stockholder of Merger Sub is the only vote or consent of the holders of any class or series of capital stock of Merger Sub necessary to approve this Agreement or the Merger or the transactions contemplated hereby.

        3.8     Intellectual Property; Privacy.     

        (a)   For purposes of this Agreement, the following terms shall be defined as follows:

        (i)     "Material Parent IP Rights" means all Parent IP Rights, which are material to the conduct of Parent's business in the manner in which its business is currently being conducted.

        (ii)    "Parent IP Rights" means all IP Rights owned solely or co-owned by Parent or its Subsidiaries, or in which Parent or its Subsidiaries has any right, title or interest, including any IP Rights applied for by, issued to, or registered in the name of Parent or any of its Subsidiaries.

        (b)    Part 3.8(b) of the Parent Disclosure Schedule lists all of the Patent Rights and all registered Trademark Rights (or Trademark Rights for which applications for registration have been filed) owned solely by Parent or its Subsidiaries as of the date of this Agreement, setting forth in each case the jurisdictions in which patents have been issued, patent applications have been filed, trademarks have been registered and trademark applications have been filed. Part 3.8(b) of the Parent Disclosure Schedule lists all of the Patent Rights and all registered Trademark Rights (or Trademark Rights for which applications for registration have been filed) in which Parent or its Subsidiaries has any co-ownership interest, other than those owned solely by Parent or its Subsidiaries, setting forth in each case the jurisdictions in which patents have been issued, patent applications have been filed, trademarks have been registered and trademark applications have been filed. Part 3.8(b) of the Parent Disclosure Schedule lists, to the best knowledge of Parent as of the date hereof, all of the Patent Rights and all registered Trademark Rights (or Trademark Rights for which applications for registration have been filed) in which Parent or its Subsidiaries has any right, title or interest, other than those owned solely or co-owned by Parent or its Subsidiaries.

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        (c)   Neither Parent nor its Subsidiaries jointly own any Parent IP Rights with any person other than Parent or its Subsidiaries. No current or former officer, manager, director, employee or independent contractor of Parent or its Subsidiaries, has any right, title or interest in, to or under any Parent IP Rights or any IP Right used in the business of Parent or any of its Subsidiaries that has not been exclusively assigned, or transferred to Parent or its Subsidiaries or licensed to Parent or its Subsidiaries for such use, except where the absence of such assignment, transfer or license would not reasonably be expected to have or result in a Parent Material Adverse Effect. Except as set forth in Part 3.8(c) of the Parent Disclosure Schedule , no Parent IP Right is involved in any interference, reexamination, cancellation, or opposition proceeding and no third party has challenged in writing within the last two years, or to the best knowledge of Parent has threatened within the last two years to challenge, the right, title or interest of Parent or its Subsidiaries in, to or under the Parent IP Rights owned or co-owned by Parent or exclusively licensed to Parent, or the validity, enforceability or claim construction of any Patent Rights owned or co-owned or exclusively licensed by Parent or its Subsidiaries included in the Parent IP Rights. To the best knowledge of Parent, no third party has claimed within the last two years any right, title or interest in any Parent IP Rights owned or co-owned by or exclusively licensed to Parent in contravention of Parent's rights in such Parent IP Rights.

        (d)   Except as set forth in Part 3.8(d) of the Parent Disclosure Schedule , no third party is asserting in writing, or to the best knowledge of Parent threatening in writing or otherwise to make, a claim challenging the ownership or other rights of Parent or its Subsidiaries in, under or to any of the Material Parent IP Rights and Parent has no knowledge of facts that have led Parent to believe that such claim is likely to be made.

        (e)   Neither Parent nor its Subsidiaries is subject to any legally binding contract or written agreement that restricts the use, transfer, delivery or licensing of the Material Parent IP Rights owned or co-owned by Parent (or any tangible embodiment thereof), except where such restrictions would not reasonably be expected to have or result in a Parent Material Adverse Effect. Part 3.8(e) of the Parent Disclosure Schedule is an accurate and complete list of all licenses and other agreements pursuant to which Parent or any of its Subsidiaries is authorized to use any IP Rights owned by any third party other than those that are not material to the conduct of the business of Parent or its Subsidiaries. The execution, delivery, and performance of this Agreement, and the consummation of the transactions contemplated hereby, will not breach, violate, or conflict with any such agreement governing any such IP Right, will not cause the forfeiture or termination or give rise to a right of forfeiture or termination of any such IP Right, or in any way impair the right of Parent or any of its Subsidiaries to use or bring any action for the unauthorized use or disclosure, infringement, or misappropriation of any Material Parent IP Right.

        (f)    Parent and its Subsidiaries have taken commercially reasonable measures to protect and maintain the secrecy and confidentiality of the proprietary know-how included in the Parent IP Rights. Neither Parent nor any of its