EX-10.3 AGREEMENT AND PLAN OF MERGER

Exhibit 10.3

AGREEMENT AND PLAN OF MERGER

     THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is made and entered into as of September 12, 2007 by and among (i) netASPx, Inc., a Delaware corporation (the “ Company ”), (ii) NaviSite, Inc., a Delaware corporation (“ Parent ”), (iii) NSite Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (“ Merger Sub ”) and (iv) for the limited purpose of agreeing to perform the duties specified in Section 3.09, GTCR Fund VI, L.P. (the “ Representative ”). Parent, Merger Sub and the Company are referred to herein collectively as the “Parties” or individually as a “Party.”

     WHEREAS, the Board of Directors of the Company deems it advisable and in the best interest of the Company’s stockholders to enter into this Agreement and to consummate the transactions contemplated hereby on the terms and subject to the conditions provided for in this Agreement;

     WHEREAS, in furtherance thereof it is proposed that the acquisition of the Company by Parent be accomplished by the merger of Merger Sub with and into the Company (the “ Merger ”), with the Company being the surviving corporation in accordance with the DGCL, followed as an integral part of the same transaction by a merger of the Company in accordance with the DGCL into a limited liability company wholly-owned by Parent (the “ Successor LLC ”);

     WHEREAS, the Boards of Directors of each of Parent (on its own behalf and as the sole stockholder of Merger Sub), Merger Sub and the Company have each approved the Merger and deemed it advisable that the Parties enter into this Agreement providing for the Merger; and

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

     NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and intending to be legally bound hereby, the Parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

     Section 1.01 Defined Terms . When used in this Agreement, the following terms shall have the meanings set forth below:

     “ Acquisition Proposal ” has the meaning set forth in Section 6.06(f).

     “ Advisors ” has the meaning set forth in Section 6.06(a).

     “ Affiliate ” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Exchange Act.

     “ Aggregate Exercise Price ” means the aggregate of the exercise prices of the In the Money Options and Warrants outstanding immediately prior to the Effective Time.

     “ Agreement ” has the meaning set forth in the introductory paragraph above.

     “ Ancillary Documents ” means the documents, instruments and agreements to be executed and/or delivered pursuant to this Agreement or pursuant to any Ancillary Document.

     “ Applicable Law ” or “ Applicable Laws ” means, with respect to any Person, any and all laws (including the common law), ordinances, constitutions, regulations, statutes, treaties, rules, codes, licenses, requirements and injunctions adopted, enacted, implemented, promulgated, issued, entered by or under the authority of any Governmental Body having jurisdiction over such Person or any of such Person’s properties or assets.

     “ Broker ” has the meaning set forth in Section 4.21.

     “ Business Day ” means any day of the year other than a Saturday, a Sunday, or other day on which commercial banks in New York, New York are authorized or required by law to be closed.

     “ Cash Portion of the Merger Consideration ” has the meaning set forth in Section 3.01(a).

     “ Cash Portion of the Per Share Closing Merger Consideration ” shall be equal to (x) the Cash Portion of the Merger Consideration divided by (y) the number of Fully-Diluted Company Shares.

     “ Certificate of Merger ” has the meaning set forth in Section 2.02.

     “ Certificates ” has the meaning set forth in Section 3.05(b).

     “ Closing ” has the meaning set forth in Section 2.02.

     “ Closing Date ” has the meaning set forth in Section 2.02.

     “ Closing Merger Consideration ” has the meaning set forth in Section 3.01(c)(iii).

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

     “ Collateral Source ” has the meaning set forth in Section 10.07.

     “ Common Stock ” means the common stock, par value $0.0001 per share, of the Company.

     “ Common Stockholders ” has the meaning set forth in Section 3.05(b).

     “ Company ” has the meaning set forth in the introductory paragraph above.

     “ Company Balance Sheet ” has the meaning set forth in Section 4.07(a).

     “ Company Balance Sheet Date ” has the meaning set forth in Section 4.07(a).

     “ Company Certificate ” means the certificate of incorporation of the Company.

     “ Company Disclosure Schedules ” has the meaning set forth in Article 4.

     “ Company Financial Statements ” has the meaning set forth in Section 4.07(a).

     “ Company Indemnified Parties ” has the meaning set forth in Section 7.03(a).

     “ Company Intellectual Property ” has the meaning set forth in Section 4.12.

     “ Company Restricted Stock ” has the meaning set forth in Section 3.04.

     “ Company Shares ” means the issued and outstanding shares of Common Stock.

     “ Company Stockholders ” means the holders of all issued and outstanding Company Shares at or prior to the Effective Time.

     “ Company Subsidiary Securities ” has the meaning set forth in Section 4.06(b).

     “ Company Transaction Expenses ” has the meaning set forth in Section 11.01.

     “ Comparable Benefits ” has the meaning set forth in Section 7.02(b).

     “ Confidential Information ” means any information or compilation of information not generally known to the public or the industry or which the Company or any of its Subsidiaries has not disclosed to Third Parties without a written obligation of confidentiality, which information is proprietary to the Company or any of its Subsidiaries, relating to the Company’s or any of its Subsidiaries’ procedures, techniques, methods, concepts, ideas, affairs, products, processes and services, including, but not limited to, information relating to distribution, marketing, merchandising, selling, research, development, manufacturing, purchasing, accounting, engineering, financing, costs, pricing and pricing strategies and methods, customers, suppliers, creditors, employees, contractors, agents, consultants, plans, billing, needs of customers and products and services used by customers, all lists of suppliers, distributors and customers and their addresses, prospects, sales calls, products, services, prices and the like as well as any specifications, formulas, plans, drawings, accounts or sales records, sales brochures, catalogs, code books, manuals, trade secrets, knowledge, know-how, operating costs, sales margins, methods of operations, invoices or statements and the like; provided , however , that the term “Confidential Information” shall not be deemed to include information which (i) becomes generally available to the public without any fault of Parent or Merger Sub, or (ii) becomes available to Parent or Merger Sub on a non-confidential basis and without any breach of an agreement of confidentiality from a source other than the Company or any of its Subsidiaries, or (iii) is disclosed to a Governmental Body pursuant to Applicable Law, and is publicly available as a result of such disclosure.

     “ Confidentiality Agreement ” has the meaning set forth in Section 6.04.

     “ Contract ” means any agreement, lease, license agreement (other than a license granted by a Governmental Body), contract, consensual obligation, promise, commitment, arrangement, understanding or undertaking (whether written or oral and whether express or implied) of any type, nature or description. As used herein, the word “Contract” shall be limited in scope if

modified by an adjective specifying the type of contract to which this Agreement or a provision hereof refers.

     “ Credit Agreement ” means that certain Credit Agreement among the Company, its Subsidiaries and the lender named therein (the “ Lender ”).

     “ Deductible Amount ” has the meaning set forth in Section 10.05.

     “ DGCL ” means the General Corporation Law of the State of Delaware.

     “ Dissenting Shares ” has the meaning set forth in Section 3.02(c).

     “ Dollars ” and the sign “ $ ” mean United States Dollars; any foreign currency shall be converted into United States Dollars using the prevailing exchange rates in effect as of the date hereof.

     “ Effective Time ” has the meaning set forth in Section 2.02.

     “ Employee Benefit Plan ” means any (x) “employee benefit plan” (as such term is defined in ERISA Section 3(3)) that is covered by Title I of ERISA and is maintained or sponsored by the Company or any of its ERISA Affiliates, including all deferred compensation, pension, profit sharing, retirement, group or individual insurance or welfare benefit plan and (y) each employment, “change in control”, termination or severance agreement; and each other employee benefit plan, fund, program, agreement or arrangement, in each case, that is, or was within the past three years, sponsored, maintained or contributed to or required to be contributed to by the Company or any of its ERISA Affiliates.

     “ Employee Transaction Bonuses ” means the bonuses payable at the Closing to the Company employees as set forth in Schedule 1.01.

     “ Encumbrances ” means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge or other encumbrance of any kind.

     “ Environment ” has the meaning set forth in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

     “ Environmental Claim ” means administrative, regulatory, or judicial action, suits, demands, demand letters, claims, notices of non-compliance or violation, investigation or Proceedings, Orders or agreements, arising under any Environmental Law or any Permit issued under any Environmental Law, including (i) Environmental Claims by Governmental Bodies for enforcement, cleanup, removal, response, remedial or other action or damage pursuant to any applicable Environmental Law, and (ii) Environmental Claims by any Third Party seeking damages or injunctive relief resulting from Environmental Conditions or arising from alleged injury or threat of injury to health, safety or the environment.

     “ Environmental Condition ” means the presence or introduction into the environment of any Hazardous Materials (and any resulting air, soil, groundwater, or surface water contamination without regard to the location to which such resulting contamination has migrated

or spread) as a result of which the Company or any of its Subsidiaries has or may become liable to any Person or by reason of which the Company or any of its Subsidiaries or any assets of the Company or any of its Subsidiaries may suffer or be subject to an Environmental Claim.

     “ Environmental Laws ” means all Applicable Laws and any Order that (i) regulates or relates to the protection or clean-up of the environment; the use, treatment, generation, storage, transportation, handling, disposal or release of Hazardous Materials; or the preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources; or (ii) imposes liability with respect to any of the foregoing, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; or any other Applicable Law of similar effect, each as amended from time to time.

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

     “ ERISA Affiliate ” means each entity that is treated as a single employer with the Company for purposes of Code Section 414.

     “ Escrow Agent ” has the meaning set forth in Section 3.01(c)(ii).

     “ Escrow Agreement ” has the meaning set forth in Section 3.01(c)(ii).

     “ Escrow Deposit ” has the meaning set forth in Section 3.01(c)(ii).

     “ Escrow ” has the meaning set forth in the Escrow Agreement.

     “ Exchange Agent ” has the meaning set forth in Section 3.05(a).

     “ Exchange Agent Agreement ” has the meaning set forth in Section 3.05(a).

     “ Financing ” has the meaning set forth in Section 5.07.

     “ Fully-Diluted Company Shares ” is equal to, at the Effective Time (and without duplication with respect to clauses (i) and (ii)), the sum of: (i) the total number of Company Shares, plus (ii) the total number of additional shares of Common Stock that would be issued assuming the exercise, conversion or exchange, as applicable, of all outstanding Options, Warrants, or other Rights that are “In the Money” at the Effective Time. An Option, Warrant or Right is “ In the Money ” if the exercise price per share of Common Stock issuable upon exercise, conversion or exchange of such Option, Warrant or Right is less than the Per Share Merger Consideration.

     “ GAAP ” means United States generally accepted accounting principles as in effect from time to time, consistently applied.

     “ Governmental Body ” means any: (i) nation, state, county, city, town, village, district or other jurisdiction of any nature; (ii) federal, state, local, municipal, foreign or other government; (iii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, board, commission, department, instrumentality, office or other entity, and any court or other tribunal); (iv) multi-national organization or body; and/or (v) government entity exercising, or entitled or purporting to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

     “ Group Return ” has the meaning set forth in Section 4.10(f).

     “ Hazardous Materials ” means (i) any petroleum or petroleum products, asbestos in any form, and polychlorinated biphenyls, and (ii) any chemicals, materials or substances, whether solid, liquid or gas defined as or included in the definition of “contaminant,” “pollutant,” “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” or “toxic pollutants” under any applicable Environmental Law.

     “ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder.

     “ Indemnification Control Person ” means (i) in the event of a claim by a Stockholder Indemnified Party, Parent, and (ii) in the event of a claim by a Parent Indemnified Party against the Escrow Deposit, the Representative.

     “ Indemnified Party ” means any Person entitled to seek indemnification pursuant to Article 10.

     “ Indemnified Taxes ” has the meaning set forth in Section 7.05(a)(ii).

     “ Indemnifying Party ” means (i) any Person against whom indemnification may be sought pursuant to Article 10 and (ii) with respect to claims made against the Escrow Deposit, the Indemnification Control Person.

     “ Insurance Policies ” has the meaning set forth in Section 4.19.

     “ Intellectual Property ” means any and all (i) inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications and patent disclosures, together with all reissuances, continuations, continuations in part, revisions, extensions and reexaminations thereof, (ii) trademarks, service marks, trade dress, logos, trade names, assumed names and corporate names, together with all translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith, and all applications, registrations and renewals in connection therewith, (iii) copyrightable works, all copyrights and all applications, registrations and renewals in connection therewith, (iv) mask works and all applications, registrations and renewals in connection therewith, (v) trade secrets and confidential business information (including ideas, research and development, know-how, technology, formulas, compositions, processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals), (vi) computer software

(including data and related software program documentation in computer-readable and hard-copy forms), (vii) other intellectual property and proprietary rights of any kind, nature or description, including web sites, web site domain names and other e-commerce assets and resources of any kind or nature, and (viii) copies of tangible embodiments thereof (in whatever form or medium).

     “ IRS ” has the meaning set forth in Section 4.17(c).

     “ Knowledge ” means (i) with respect to the Company or any of its Subsidiaries, the actual knowledge of John M. Whiteside, Craig D. Norman and, with respect to Sections 4.13 (Contracts) and 4.16 (Labor Matters) only, the Vice President of Operations, and (ii) with respect to Parent, the actual knowledge of Arthur Becker and Jim Pluntze and the other “named executive officers” of Parent (as such term is defined in Item 402(a)(3) of Regulation S-K promulgated under the Securities Act).

     “ Lease ” has the meaning set forth in Section 4.11(b).

     “ Leased Real Property ” has the meaning set forth in Section 4.11(b).

     “ Lender Debt ” shall mean all indebtedness for borrowed money owed by the Company and its Subsidiaries pursuant to the Credit Agreement.

     “ Lender ” has the meaning set forth in the definition of the Credit Agreement in Section 1.01.

     “ Loss ” or “ Losses ” has the meaning set forth in Section 10.01.

     “ Material Adverse Effect ” means, with respect to any Person, any change or event or effect that is materially adverse to the business or financial condition of such Person and its Subsidiaries taken as a whole, excluding, in each case, any change, event or effect arising out of or resulting from (i) changes, events or developments in or affecting the Company’s industry in the United States or internationally, including changes in the use, adoption or non-adoption of technologies or industry standards (other than any such change, event or development that is disproportionately adverse to the Company relative to the effect of such conditions on other Persons operating in the managed applications services industry), (ii) changes, events or developments in financial, foreign exchange or securities markets or the economy in general in the U.S. or internationally including any disruption thereof (other than any such change, event or development that is disproportionately adverse to the Company relative to the effect of such conditions on other Persons operating in the managed applications services industry), (iii) any change, event or development brought about through acts of war or terrorism, insurrection, escalation of hostilities, natural disasters, acts of God or similar calamity or crisis (other than any such change, event or development that is disproportionately adverse to the Company relative to the effect of such conditions on other Persons affected by such conditions), (iv) the announcement, execution or delivery of this Agreement or the Ancillary Documents or the consummation of the Transactions, (v) such Person’s performance of its obligations hereunder, (vi) any change, event, or development relating to any action taken (or any failure to take any action) by any other Party hereto, (vii) any matter set forth in any of the Company Disclosure Schedules or (viii) any change, event or development that has been cured prior to the Closing.

     “ Material Contracts ” has the meaning set forth in Section 4.13(a).

     “ Material IP Agreements ” has the meaning set forth in Section 4.12.

     “ Merger ” has the meaning set forth in the Recitals.

     “ Merger Consideration ” has the meaning set forth in Section 3.01(a).

     “ Merger Sub ” has the meaning set forth in the introductory paragraph above.

     “ Option ” has the meaning set forth in Section 3.03(a).

     “ Option/Warrant Closing Cash Out Payment ” means an amount in cash equal to the value of (x) the Stock Portion of the Merger Consideration, less the Escrow Deposit, divided by (y) the number of Fully-Diluted Company Shares.

     “ Option Holders ” means each holder of certificates, agreements or other instruments evidencing Options.

     “ Option Payment ” has the meaning set forth in Section 3.03(a).

     “ Option Plan ” has the meaning set forth in Section 3.03(a).

     “ Order ” means any judgment, award, decision, consent decree, injunction, ruling, writ, charge or other restriction of a Governmental Body that is binding on any Person or its property under Applicable Law.

     “ Ordinary Course of Business ” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

     “ Parent ” has the meaning set forth in the introductory paragraph above.

     “ Parent Common Stock ” means the common stock, par value $0.01 per share, of Parent.

     “ Parent Credit Agreement ” has the meaning set forth in Section 5.07.

     “ Parent Disclosure Schedules ” has the meaning set forth in Article 5.

     “ Parent Indemnified Parties ” has the meaning set forth in Section 10.01.

     “ Parent Lender ” has the meaning set forth in Section 5.07.

     “ Parent Plans ” has the meaning set forth in Section 7.02(c).

     “ Parent Preferred Stock ” means the preferred stock, par value $0.01 per share, of Parent.

     “ Parent Return ” has the meaning set forth in Section 7.05(a)(i).

     “ Party ” or “ Parties ” has the meaning set forth in the introductory paragraph above.

     “ Payoff Amount ” has the meaning set forth in Section 3.01(c)(i).

     “ Per Share Merger Consideration ” has the meaning set forth in Section 3.02(a).

     “ Permit ” or “ Permits ” means any and all permits, licenses, filings, authorizations, registrations, qualifications, consents, approvals, or indicia of authority (and any pending applications for approval or renewal of a Permit) issued by any Governmental Body that are required by, or issued to or on behalf of, a Person, in order for the Company or such Person to own, construct, operate, sell, inventory, disburse or maintain any of their assets or conduct all or any portion of their business.

     “ Permitted Encumbrances ” means (a) Taxes, assessments and other governmental levies, fees or charges that are (i) not due and payable as of the Closing Date, or (ii) being contested by appropriate Proceedings, (b) statutory Encumbrances, mechanics liens and similar liens for labor, materials or supplies , in each case incurred in the Ordinary Course of Business for amounts that are (i) not delinquent and are not, in the aggregate, material, or (ii) being contested by appropriate Proceedings, (c) Encumbrances that are a matter of public record, (d) present or future zoning, building codes, and other land use Applicable Law regulating the use or occupancy of Real Property or the activities conducted thereon that are imposed by any Governmental Body having jurisdiction over such Real Property, (e) Encumbrances for any financing that is an obligation of the Company or any of its Subsidiaries, that will be paid off at Closing, (f) purchase money liens and liens securing rental payments under capital lease arrangements, (g) restrictions on the transferability of securities arising under Applicable Laws, (h) easements, rights of way, covenants, conditions, restrictions and other similar matters and other title defects and Encumbrances, none of which materially impair the use or occupancy of Real Property or the operation of the business of the Company and its Subsidiaries, taken as a whole.

     “ Person ” means an individual, a partnership, a limited partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity or a Governmental Body.

     “ Personal Property ” has the meaning set forth in Section 4.11(c).

     “ Pre-Closing Tax Statement ” has the meaning set forth in Section 7.05(a)(ii).

     “ Pre-Closing Taxes ” has the meaning set forth in Section 7.05(b).

     “ Pro Rata Share ” means, with respect to each share of Common Stock, (x) the amount of distribution or proceeds from the Escrow divided by (y) the number of issued and outstanding shares of Common Stock as of the Effective Time.

     “ Proceeding(s) ” means any suit, litigation, arbitration, hearing, audit, investigation or other action (whether civil, criminal, administrative or investigative) commenced, brought, conducted, or heard by or before, any Governmental Body or arbitrator.

     “ Real Property ” means land, together with all buildings, structures, improvements, and fixtures located thereon, and easements and other rights and interests appurtenant thereto.

     “ Representative ” has the meaning set forth in the introductory paragraph above.

     “ Requisite Stockholder Approval ” has the meaning set forth in Section 4.02.

     “ Rights ” means any and all outstanding subscriptions, warrants, options, or other arrangements or commitments obligating or which may obligate (with or without notice or passage of time or both) a company to issue or dispose of any securities of a company including, without limitation, convertible securities and debt securities.

     “ Statement of Closing Cash ” has the meaning set forth in Section 3.01(b).

     “ Stock Portion of the Merger Consideration ” has the meaning set forth in Section 3.01(a).

     “ Stock Portion of the Per Share Closing Merger Consideration ” shall be a number of shares of Parent Series A Preferred Stock equal to (x) the Stock Portion of the Merger Consideration, less the Escrow Deposit, divided by (y) the number of issued and outstanding shares of Common Stock as of the Effective Time.

     “ Stockholder Indemnified Parties ” has the meaning set forth in Section 10.02.

     “ Subsidiary ” means, with respect to any Person, (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and for this purpose a Person owns a majority ownership interest in such a business entity (other than a corporation) if such Person shall be allocated a majority of such business entity’s gains or losses or shall be or shall control any managing director or general partner of such business entity (other than a corporation). The term “Subsidiary” shall include all Subsidiaries of such Subsidiary.

     “ Superior Proposal ” has the meaning set forth in Section 6.06(f).

     “ Surviving Corporation ” has the meaning set forth in Section 2.01 and shall also mean with respect to any period after the LLC Merger, the Successor LLC.

     “ Successor LLC ” has the meaning set forth in the Recitals.

     “ Tax ” or “ Taxes ” means all federal, state, local, foreign or other tax of any kind whatsoever, including without limitation, all income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, ad valorem, value added, inventory, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, unclaimed property, escheat, sales, use, transfer, registration, alternative or add-on minimum, or estimated tax, and including any interest, penalty, or addition thereto, whether disputed or not.

     “ Tax Arbitrator ” has the meaning set forth in Section 7.05(a)(iii).

     “ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement with respect to any Tax required to be filed or actually filed with a Taxing Authority, including any schedule or attachment thereto, and including any amendment thereof.

     “ Tax Statement Dispute ” has the meaning set forth in Section 7.05(a)(iii).

     “ Taxing Authority ” means the domestic or foreign Governmental Body responsible for the administration of any Tax.

     “ Third Party ” or “ Third Parties ” shall mean any Person that is not a Party to this Agreement, other than the Company Stockholders or any of their Affiliates or other related parties.

     “ Third Party Claim ” has the meaning set forth in Section 10.03(a).

     “ Third Party Interests ” has the meaning set forth in Section 4.06(c).

     “ Threatened ” means as follows: a claim, Proceeding, dispute, action, or other matter will be deemed to have been “ Threatened ” if any demand or statement has been made in writing, or any notice has been given in writing that would lead a reasonably prudent Person to conclude that such a claim, Proceeding, dispute, action, or other matter will, with substantial certainty, be asserted, commenced, taken or otherwise pursued in the future; provided , however , that the foregoing shall not include customer billing, service or warranty disputes in the Ordinary Course of Business.

     “ Transaction Expense ” has the meaning set forth in Section 11.01.

     “ Transactions ” means the Merger and any other transactions contemplated by or pursuant to this Agreement and the Ancillary Documents.

     “ Warrant Holders ” has the meaning set forth in Section 3.05(b).

     “ Warrant Payment ” has the meaning set forth in Section 3.03(b).

     “ Warrants ” has the meaning set forth in Section 3.03(b).

     “ Withholdings ” means the amount reasonably determined jointly by Parent and the Company in good faith to be withheld from the Merger Consideration as required by Applicable Law (arising from, without limitation, withholding obligations of the Company and its Subsidiaries arising from the cancellation and settlement of any Options or Warrants), which amount(s) shall be timely remitted to the appropriate Governmental Body by or on behalf of the Surviving Corporation at or after the Closing.

     “ Written Consents ” has the meaning set forth in Section 6.05.

ARTICLE 2
THE MERGER

     Section 2.01 The Merger . Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the Effective Time, Merger Sub shall be merged with and into the Company. As a result of the Merger, the separate corporate existence of Merger Sub shall cease, and the Company shall continue as the surviving corporation and as a wholly-owned subsidiary of Parent immediately following the Merger (the “ Surviving Corporation ”).

     Section 2.02 Closing and Effective Time . Unless this Agreement is earlier terminated pursuant to the provisions of Section 9.01 hereof, the closing of the Merger (the “ Closing ”) shall take place at the offices of Morrison & Foerster LLP, 1650 Tysons Boulevard, Suite 400, McLean, Virginia 22102, at 10:00 a.m. (Eastern time) no later than two (2) Business Days after the satisfaction or, if permissible, waiver of all of the conditions set forth in Article 8 (other than those conditions that by their nature are to be fulfilled at the Closing, but subject to the fulfillment of such conditions), or at such later time as the Parties may agree. The date upon which the Closing actually occurs is herein referred to as the “ Closing Date .” Subject to the provisions of this Agreement, on the Closing Date, the Parties shall cause the Merger to be consummated by filing a certificate of merger (the “ Certificate of Merger ”) with the Secretary of State of the State of Delaware, in such form as required by, and executed in accordance with, the relevant provisions of the DGCL (the date and time of acceptance by the Secretary of State of Delaware of such filing, or, if another date and time is specified in such filing, such specified date and time, being the “ Effective Time ”).

     Section 2.03 Effect of the Merger . At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, except as otherwise provided herein, all the property, assets, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities, duties and obligations of the Company and Merger Sub shall become the debts, liabilities, duties and obligations of the Surviving Corporation.

     Section 2.04 Certificate of Incorporation; Bylaws .

          (a) At the Effective Time, the Company shall amend the Company Certificate so as to be in the form attached hereto as Exhibit A and, as so amended, such certificate of incorporation shall be the certificate of incorporation of the Surviving Corporation until thereafter amended as provided therein or by the DGCL.

          (b) At the Effective Time, the Company shall amend the Company’s bylaws so as to be in the form attached hereto as Exhibit B and, as so amended, such bylaws shall be the bylaws of the Surviving Corporation until thereafter amended as provided therein, in the Surviving Corporation’s certificate of incorporation or by the DGCL.

     Section 2.05 Directors and Officers . The directors of the Company immediately prior to the Effective Time shall submit their resignations, which shall be effective as of the Effective

Time. The directors of Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation. The officers of Merger Sub immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation.

     Section 2.06 The LLC Merger . Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, following the Effective Time, the Surviving Corporation shall be merged with and into the Successor LLC. As a result of the LLC Merger, the separate corporate existence of the Surviving Corporation shall cease, and the Successor LLC shall continue as the surviving entity in the LLC Merger and as a wholly-owned subsidiary of Parent immediately following the LLC Merger.

     Section 2.07 Second Effective Time . Subject to the provisions of this Agreement, reasonably promptly after the Closing Date, the Parties shall cause the LLC Merger to be consummated by filing a certificate of merger (the “ Certificate of LLC Merger ”) with the Secretary of State of the State of Delaware, in such form as required by, and executed in accordance with, the relevant provisions of the DGCL (the date and time of acceptance by the Secretary of State of the State of Delaware of such filing, or, if another date and time is specified in such filing, such specified date and time, being the “Second Effective Time”).

     Section 2.08 Effect of the LLC Merger . At the Second Effective Time, the effect of the LLC Merger shall be as provided in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Second Effective Time, except as otherwise provided herein, all the property, assets, rights, privileges, powers and franchises of the Surviving Corporation and the Successor LLC shall vest in the Successor LLC, and all debts, liabilities, duties and obligations of the Surviving Corporation and Successor LLC shall become the debts, liabilities, duties and obligations of the Successor LLC.

     Section 2.09 Certificate of Formation . At the Second Effective Time, the Successor LLC shall amend the Company Certificate so as to be in an appropriate form reasonably agreed to by Parent and the Representative, and as so amended, such certificate of formation shall be the certificate of formation of the Successor LLC until thereafter amended as provided therein or by the DGCL.

     Section 2.10 Effect of LLC Merger on Stock of Surviving Corporation. At the Second Effective Time, by virtue of the LLC Merger and without any further action on the part of the Surviving Corporation, Parent, the Successor LLC, or any stockholder of Parent, each share of the stock of the Surviving Corporation issued and outstanding immediately prior to the Second Effective Time, shall be converted into membership interests in the Successor LLC. No stock of the Surviving Corporation shall be deemed to be outstanding or to have any rights other than those set forth in this Section 2.10 after the LLC Effective Time.

ARTICLE 3
MERGER CONSIDERATION; CONVERSION OF SECURITIES;
EXCHANGE OF CERTIFICATES

     Section 3.01 Calculation and Payment of the Merger Consideration .

          (a)  Calculation of Merger Consideration . The aggregate amount to be paid with respect to the Fully-Diluted Company Shares (the “ Merger Consideration ”) shall consist of: (A) the payment or delivery by Parent and Merger Sub of (i) Three Million One Hundred Twenty Five Thousand Shares (3,125,000) shares of Parent Series A Preferred Stock (the “ Stock Portion of the Merger Consideration ”) and Fifteen Million Dollars ($15,000,000) in cash (the “ Cash Portion of the Merger Consideration ”), subject to adjustment as set forth in Section 3.01(b) below, plus (ii) the Aggregate Exercise Price, minus (iii) the amount by which the unpaid Company Transaction Expenses as of the Closing Date exceed Five Hundred Thousand Dollars ($500,000), minus (iv) the Payoff Amount and (B) the payment of the Closing Cash by the Company to the Exchange Agent pursuant to Section 3.01(b). Remittance and delivery of the Merger Consideration by Parent and Merger Sub shall be made by Parent or Merger Sub in accordance with the provisions of Section 3.01(c). The maximum aggregate Merger Consideration payable by Parent and Merger Sub to the Company Stockholders, Option Holders and Warrant Holders in the Merger pursuant to this Agreement shall be Forty Million Five Hundred Thousand Dollars ($40,500,000), subject to adjustment as set forth in Section 3.01(b). The parties agree that the Stock Portion of the Merger Consideration is valued at $25,000,000.

          (b)  Closing Cash Adjustment . On the Closing Date, the Company shall deliver to Parent and Merger Sub a statement setting forth the amount of the Company’s immediately available cash (minus the amount of cash required to satisfy outstanding checks) as of the Closing Date (the “ Statement of Closing Cash ”) determined in accordance with the principles, policies, estimates and procedures set forth on Schedule 3.01 of the Company Disclosure Schedules (the “ Closing Cash ”). At the Closing, the Company shall remit the Closing Cash by wire transfer of immediately available funds to the Exchange Agent. To the extent that the Closing Cash is greater than Five Million Dollars ($5,000,000), the Cash Portion of the Merger Consideration shall be decreased by such amount. To the extent that the Closing Cash is less than Five Million Dollars ($5,000,000), the Cash Portion of the Merger Consideration shall be increased by such amount.

          (c)  Payment of Merger Consideration and the Payoff Amount . At the Closing, Parent shall remit the Merger Consideration and the Payoff Amount by wire transfer of immediately available funds as follows:

               (i) Parent shall remit an amount by wire transfer of immediately available funds as directed in writing by the Lender necessary to repay the Lender Debt and all interest accrued thereunder up to and including the Closing Date (the “ Payoff Amount ”);

               (ii) On the Closing Date, the Representative, Parent and Branch Banking and Trust Company (the “ Escrow Agent ”) shall enter into an Escrow Agreement in the form attached hereto as Exhibit C (the “ Escrow Agreement ”). Parent shall withhold Three Hundred Ninety-Three Thousand Seven Hundred Fifty (393,750) shares of Parent Series A

Preferred Stock out of the Stock Portion of the Merger Consideration (the “ Escrow Deposit ”) and deposit such shares into escrow at the Closing pursuant to the terms of the Escrow Agreement. The Escrow Agreement shall provide that any shares held by the Escrow Agent shall be released by the Escrow Agent to the Company Stockholders pursuant to the terms of the Escrow Agreement, less any pending or paid indemnification claims asserted pursuant to Article 10 on or prior to such date, on the nine (9) month anniversary of the Closing Date; and

               (iii) The Merger Consideration, less the Escrow Deposit, shall be referred to herein as the “ Closing Merger Consideration .” Parent shall remit the Closing Merger Consideration, less the Closing Cash and the aggregate Option Payments to be paid at Closing, to the Exchange Agent at the Closing (as described in Section 3.05).

     Section 3.02 Effect on Capital Stock . At the Effective Time, by virtue of the Merger and without any further action on the part of the Company, Parent, Merger Sub or any Company Stockholder or any stockholder of Parent:

          (a)  Conversion of Common Stock . Each share of the Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of Common Stock cancelled pursuant to Section 3.02(b) and Dissenting Shares whose appraisal rights are being exercised pursuant to Section 3.02(c)), shall be converted into the right to receive, upon surrender of a Certificate formerly representing such share in the manner provided in Section 3.05, (i) an amount in cash equal to the Cash Portion of the Per Share Closing Merger Consideration, plus (ii) a number of shares of Parent Series A Preferred Stock equal to the Stock Portion of the Per Share Closing Merger Consideration, plus (iii) a right to receive a Pro Rata Share of any proceeds or distributions from the Escrow (collectively, the “ Per Share Merger Consideration ”). The Cash Portion of the Per Share Closing Merger Consideration payable with respect to each share of the Common Stock hereunder shall be reduced by (x) the aggregate amount of the Option/Warrant Closing Cash Out Payment, the Option Escrow Cash Out Payments and the Warrant Escrow Cash Out Payments divided by (y) the number of issued and outstanding shares of Common Stock immediately prior to the Effective Time. No Common Stock shall be deemed to be outstanding or to have any rights other than those set forth in this Section 3.02 after the Effective Time.

          (b)  Cancellation of Treasury Stock . Each share of Common Stock held in treasury by the Company and each share of Common Stock owned or held, directly or indirectly, by the Company or its Subsidiaries, or Parent, Merger Sub or their respective Subsidiaries, in each case, immediately prior to the Effective Time, shall be automatically cancelled without any conversion thereof and shall cease to exist and no payment of cash or any other distribution shall be made with respect thereto.

          (c)  Appraisal Rights . Notwithstanding anything to the contrary herein, shares of Common Stock issued and outstanding immediately prior to the Effective Time and held by a Common Stockholder who is entitled to and has properly exercised and perfected appraisal rights pursuant to Section 262 of the DGCL (collectively, the “ Dissenting Shares ”) shall not be converted as of the Effective Time into the right to receive the Per Share Merger Consideration, but instead shall have such rights as may be available under the DGCL. At the Effective Time, all Dissenting Shares shall no longer be outstanding and shall be cancelled and each holder of

Dissenting Shares shall cease to have any rights with respect thereto, except the right to receive the fair value of such Dissenting Shares in accordance with Section 262 of the DGCL; provided , however , that if any such Common Stockholder shall have failed to perfect or shall effectively withdraw or lose its right to appraisal and payment under the DGCL, or a court of competent jurisdiction shall determine that such holder is not entitled to the relief provided by Section 262, such stockholder’s shares of Common Stock shall thereupon be deemed to have been converted as of the Effective Time into the right to receive the Per Share Merger Consideration and such shares of Common Stock shall no longer be Dissenting Shares. The Company shall give Parent prompt notice of all written demands received by the Company for appraisal rights and Parent shall have the right to participate in all negotiations and proceedings with respect to such demand. The Company shall not, except with the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands.

          (d)  Conversion of Merger Sub Common Stock . Each issued and outstanding share of common stock, $0.01 par value, of Merger Sub outstanding immediately prior to the Effective Time shall be converted into and become one share of common stock of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.

     Section 3.03 Options and Warrants .

          (a)  Options . Prior to the Effective Time, the Board of Directors of the Company (or, if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary to (i) provide for the cancellation of all outstanding, unexercised and unexpired stock option or similar Rights to purchase Common Stock (each, an “ Option ”) granted under the Company’s Third Amended and Restated 1999 netASPx, Inc. Stock Incentive Plan (the “ Option Plan ”), effective at the Effective Time, without any payment therefor except as otherwise provided in this Section 3.03(a) and (ii) terminate the Option Plan as of the Effective Time. Each In the Money Option, to the extent unexercised as of the Effective Time, shall thereafter no longer be exercisable but shall entitle each holder thereof, in cancellation and settlement therefor, to an amount (the “ Option Payment ”) equal to (1) a payment in cash equal to (x) the amount of the excess (if any) of (A) the Cash Portion of the Per Share Closing Merger Consideration and the Option/Warrant Closing Cash Out Payment over (B) the exercise price per share of Common Stock subject to such Option, multiplied by (y) the total number of shares of Common Stock subject to such Option immediately prior to its cancellation (such payment to be net of Withholdings, if any, and without interest), payable at the same time, in the same manner, and subject to the same conditions under which the Common Stockholders receive the Cash Portion of the Per Share Closing Merger Consideration plus (2) a payment in cash (the “ Option Escrow Cash Out Payment ”) equal to the total number of shares of Common Stock subject to such Option immediately prior to its cancellation multiplied by the value of the Escrow Deposit divided by the Fully-Diluted Share Number. At the Closing, the Parent shall deliver to the Company the aggregate Option Payments and the Company shall pay, or arrange for the Company’s payroll processor to pay, to each Option Holder, subject to any applicable Withholdings, the Option Payment due under this Section 3.03(a) with respect to such Option. No diminution in the Closing Cash as a result of making the Option Payments on behalf of Parent shall be reflected in the Merger Consideration. For purposes of this Section 3.03(a), the

value of each share of Parent Series A Preferred Stock shall be deemed to be Eight Dollars ($8.00).

          (b)  Warrants . Prior to the Effective Time, the Board of Directors of the Company (or, if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary to provide for the cancellation, effective at the Effective Time, of all outstanding warrants to purchase Common Stock (the “ Warrants ”), without any payment therefor except as otherwise provided in this Section 3.03(b). Each In the Money Warrant, to the extent unexercised as of the Effective Time, shall thereafter no longer be exercisable but shall entitle each Warrant Holder, in cancellation and settlement therefor, to an amount (the “ Warrant Payment ”) equal to (i) a payment in cash equal to (x)(A) the Cash Portion of the Per Share Closing Merger Consideration and the Option/Warrant Closing Cash Out Payment minus (B) the exercise price per share of Common Stock subject to such Warrant, multiplied by (y) the total number of shares of Common Stock as to which that Warrant remains unexercised immediately prior to its cancellation (such payment to be net of Withholdings, if any, and without interest), payable at the same time, in the same manner, and subject to the same conditions under which the Common Stockholders receive the Cash Portion of the Per Share Closing Merger Consideration plus (ii) a payment in cash (the “ Warrant Escrow Cash Out Payment ”) equal to the total number of shares of Common Stock subject to such Warrant immediately prior to its cancellation multiplied by the value of the Escrow Deposit divided by the Fully-Diluted Share Number. Upon surrender of a Certificate evidencing an In the Money Warrant by the Warrant Holder to the Exchange Agent, pursuant to Section 3.05, the Exchange Agent shall pay to such Warrant Holder, subject to any applicable Withholdings, the Warrant Payment due under this Section 3.03(b) with respect to such Warrant. For purposes of this Section 3.03(b), the value of each share of Parent Series A Preferred Stock shall be deemed to be Eight Dollars ($8.00).

     Section 3.04 Restricted Stock . If any share of Company Common Stock outstanding immediately prior to the Effective Time is unvested or subject to a repurchase option or forfeiture in favor of the Company (any such shares, “ Company Restricted Stock ”), then, effective immediately prior to the Effective Time, such Company Restricted Stock shall be fully vested and any repurchase option or forfeiture restriction shall lapse.

     Section 3.05 Payment of Merger Consideration .

          (a) Pursuant to an Exchange Agent Agreement in the form attached hereto as Exhibit D (the “ Exchange Agent Agreement ”) to be entered into prior to the Closing between Representative, Parent and Branch Banking and Trust Company (the “ Exchange Agent ”), at the Closing, and subject to the terms and conditions set forth in this Agreement, Parent shall remit to the Exchange Agent the amount of cash equal to the Cash Portion of the Merger Consideration and the number of shares of Parent Series A Preferred Stock constituting the Stock Portion of the Merger Consideration less the Escrow Deposit. All payments for shares of Common Stock, Options and the Warrants which are made in accordance with the terms hereof shall be deemed to have been made in full satisfaction of all rights pertaining to such Common Stock, Options and Warrants, as the case may be.

          (b) Promptly after entering into the Exchange Agent Agreement and before the Effective Time, the Company shall send or cause the Exchange Agent to send a notice and a

letter of transmittal in the form attached hereto as Exhibit E (a “ Letter of Transmittal ”) (which shall (x) specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent, (y) expressly ratify and confirm the appointment of the Representative as attorney-in-fact and agent for and on behalf of the applicable former Common Stockholders in accordance with Article 3 of this Agreement and (z) otherwise be in customary form), to each holder of certificates, agreements, or other instruments formerly evidencing (i) shares of Common Stock (other than certificates representing Dissenting Shares) (such holders, “ Common Stockholders ”) and (ii) Warrants (such holders, “ Warrant Holders ”) (such instrument evidencing shares of Common Stock and Warrants, collectively, the “ Certificates ”) advising such holders of such Certificates of the procedure for surrendering to the Exchange Agent their Certificates for exchange into the Per Share Merger Consideration or the Warrant Payment, as the case may be, and that delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery to the Exchange Agent of the Certificates and a duly executed Letter of Transmittal and any other required documents of transfer. Upon surrender of their Certificates to the Exchange Agent together with such Letter of Transmittal (duly executed) and any other required documents of transfer, and no earlier than the Closing, each Common Stockholder and Warrant Holder shall be entitled to receive in exchange therefore the Per Share Merger Consideration or the Warrant Payment, respectively. Upon such surrender, and no earlier than the Closing, the Exchange Agent shall promptly deliver to each such holder the applicable consideration due pursuant to this Section 3.05(b) in accordance with the instructions set forth in the related Letter of Transmittal, and the Certificates so surrendered shall promptly be cancelled. Until surrendered, the Certificates (other than those evidencing Dissenting Shares) shall be deemed for all purposes to evidence only the right to receive the consideration due pursuant to this Section 3.05(b), or, in the case of Dissenting Shares, the fair value of such Dissenting Shares in accordance with Section 262 of the DGCL. No interest shall accrue or be paid on any amount payable upon the surrender of the Certificates (other than Dissenting Shares to the extent required by the DGCL). Notwithstanding the foregoing or Sections 3.02, 3.03 or 3.04, the Exchange Agent shall not pay to any Common Stockholder or Warrant Holder that portion of the Per Share Merger Consideration or Warrant Payment held in the Escrow until such times as such shares or other proceeds or distributions are distributable pursuant to the terms and conditions of the Escrow Agreement.

          (c) If any portion of the Per Share Merger Consideration or Warrant Payment is to be paid to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition to such payment that (i) such Certificate shall be properly endorsed and (ii) the Person requesting such payment shall pay to the Exchange Agent any transfer or other Taxes required as a result of such payment to a Person other than the registered holder of such Certificate or establish to the reasonable satisfaction of the Exchange Agent that such Tax has been paid or is not payable.

          (d) Notwithstanding the other provisions of this Section 3.05, any Company Stockholder that shall have surrendered its Certificates together with a duly executed Letter of Transmittal and any other required documents of transfer to Parent at least one (1) day prior to the Closing shall be entitled to receive at the Closing the applicable consideration directly from Parent and/or the Company.

          (e) To the extent any Company Stockholder is indebted to the Company for borrowed money as of the Closing, such amount shall be described on the Letter of Transmittal with respect to such Company Stockholder and, if Parent and the Representative shall have received evidence reasonably satisfactory to each of them that the Merger Consideration payable to such Company Stockholder has been offset by such amount, then Parent and the Representative shall promptly deliver joint written instructions to the Exchange Agent instructing the Exchange Agent to deliver such amount to the Surviving Corporation from the exchange fund established by the Exchange Agent Agreement.

     Section 3.06 No Liability . None of Parent, Merger Sub, the Representative or the Surviving Corporation shall be liable to any Company Stockholder in respect of any Per Share Merger Consideration, Option Payment or Warrant Payment delivered to a public official as required by and pursuant to any applicable abandoned property, escheat or similar Applicable Law.

     Section 3.07 Lost, Stolen and Destroyed Certificates . If any Certificate is lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed, the Surviving Corporation shall issue in exchange for such lost, stolen or destroyed Certificate, the Per Share Merger Consideration, Option Payment or Warrant Payment, as may be the case, deliverable in respect thereof pursuant to this Agreement.

     Section 3.08 Return of Merger Consideration . If, one (1) year after the Effective Time, there remains any Certificate, Option or Warrant which has not been surrendered or exercised for payment of the applicable Per Share Merger Consideration, Option Payment, or Warrant Payment, as may be the case, the Exchange Agent shall mail notices to the holder thereof at the address set forth in the records of the Company notifying such holder of the right to receive the Per Share Merger Consideration, Option Payment or Warrant Payment, as may be the case. To the extent that any holder has not tendered his, her or its Certificate, Option or Warrant within ninety (90) days after the mailing of such notice, the Exchange Agent shall return, to the extent permitted by Applicable Law, to Parent any funds held by it for the benefit of such holder and deliver to Parent any Certificates or other documents received by it from any holder after such time. Upon receipt, Parent shall hold the remaining funds for the benefit of such holders and shall deliver to any such holder who has properly surrendered or exercised Certificates, Options or Warrants, the Per Share Merger Consideration, Option Payment, or Warrant Payment, as may be the case, to which such holder is entitled pursuant to this Agreement with respect to the Certificates, Options or Warrants surrendered or exercised by such holder.

     Section 3.09 The Representative .

          (a) Appointment of the Representative . By virtue of the adoption of this Agreement and approval of the Merger and the Transactions by the Common Stockholders, each Company Stockholder (regardless of whether or not such Company Stockholder votes in favor of the adoption of the Agreement and the approval of the Merger and the Transactions, whether at a meeting or by written consent in lieu thereof) shall be deemed to have appointed, effective from and after the approval of the Merger, Representative to act as his, her or its representative and true and lawful attorney-in-fact, with full power of substitution, in such holder’s name and on such holder’s behalf, under this Agreement in the absolute discretion of the Representative in

accordance with the terms of this Section 3.09, the Registration Rights Agreement and the Escrow Agreement. This power of attorney and all authority hereby conferred is irrevocable and shall not be terminated by any act of any such holder, by operation of law, by such holder’s death or disability or by any other event, except as expressly set forth herein. The Representative may be replaced upon the affirmative vote of the holders of a majority of the Common Stock as of the Closing. Any Person or entity appointed to replace a former Representative shall execute a statement agreeing to perform the duties set forth in this Agreement. The appointment of a replacement Representative shall become effective upon delivery of such statement to Parent and the Surviving Corporation.

          (b) Authority After the Effective Time . From and after the Effective Time, the Representative shall be authorized to: (i) take all actions required by, and exercise all rights granted to, the Representative in this Agreement, the Registration Rights Agreement and the Escrow Agreement; (ii) receive all notices or other documents given or to be given to the Representative by Parent pursuant to this Agreement, the Registration Rights Agreement and the Escrow Agreement; (iii) negotiate, undertake, compromise, defend, resolve and settle any suit, proceeding or dispute under this Agreement, the Registration Rights Agreement and the Escrow Agreement; (iv) execute and deliver all agreements, certificates and documents required by the Representative in connection with any of the Merger and the Transactions; (v) engage special counsel, accountants and other advisors and incur such other expenses in connection with any of the Transactions; and (vi) take such other action as is necessary on behalf of the Company Stockholders in connection with this Agreement, the Registration Rights Agreement and the Escrow Agreement and the Merger and the Transactions, including, without limitation, all such other matters as the Representative may deem necessary or appropriate to carry out the intents and purposes of this Agreement and the Ancillary Documents.

          (c) Expenses . The Representative shall be entitled to receive advances or reimbursement for any and all reasonable expenses, charges, liabilities and debts, including reasonable attorneys’ fees, incurred by the Representative in the performance or discharge of its rights and obligations under this Agreement but only in connection with a Third Party Claim. The Representative shall be entitled to collect such advances or reimbursement from the Escrow (up to $250,000) in shares of Parent Series A Preferred Stock (or Parent Common Stock issued upon conversion of Parent Series A Preferred Stock) pursuant hereto and pursuant to the Escrow Agreement. For purposes of the foregoing, the value of each share of Parent Series A Preferred Stock as of any particular time shall be deemed to be the “Redemption Price” of such share as such term is defined in the Certificate of Designations and the value of each share of Parent Common Stock issued upon conversion of Parent Series A Preferred Stock shall be deemed to be Eight Dollars ($8.00), plus any accrued but unpaid dividends (as appropriately adjusted to reflect fully the effect of any stock split, reverse stock split, stock dividend (including any dividend or general distribution of securities convertible into or exchangeable or exercisable for any capital stock of Parent), reclassification, reorganization, recapitalization or other like change occurring after the date hereof).

          (d) Release from Liability; Indemnification; Authority of Representative . By virtue of the adoption of this Agreement and the approval of the Merger and the Transactions by the Common Stockholders, each Company Stockholder shall be deemed to have (i) released the Representative from, and agreed to indemnify the Representative against, liability for any action

taken or not taken by the Representative in its capacity as such Representative, except for the liability of the Representative to a Company Stockholder for loss which such holder may suffer from fraud committed by the Representative in carrying out its duties hereunder, and (ii) appointed, as of such approval, the Representative as such Company Stockholder’s true and lawful agent and attorney-in-fact to enter into any agreement in connection with the Merger and the Transactions, to exercise all or any of the powers, authority and discretion conferred on such Company Stockholder under any such agreement, to give and receive notices on such Company Stockholder’s behalf and to be such Company Stockholder’s exclusive representative with respect to any matter, suit, claim, action or proceeding arising with respect to any transaction contemplated by such agreement, including, without limitation, the defense, settlement or compromise of any claim, action or Proceeding for which Parent or the Surviving Corporation may be entitled to indemnification. All actions, decisions and instructions of the Representative shall be conclusive and binding upon all of the Company Stockholders.

          (e) Acceptance . By executing this Agreement, the Representative agrees to act as, and to undertake the duties and responsibilities of, the Representative as set forth in this Agreement.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as set forth in the disclosure schedules delivered by the Company to Parent on the date hereof, which shall be arranged in sections and subsections corresponding to the numbered and lettered sections and subsections contained in this Article 4 (the “ Company Disclosure Schedules ”), the Company represents and warrants as of the date hereof to Parent and Merger Sub as follows:

     Section 4.01 Corporate Existence and Power . The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. The Company is duly qualified to do business as a foreign corporation and is in good standing in each other jurisdiction where the transaction of its business requires such qualification, except where the lack of such qualification would not have, individually or in the aggregate, a Material Adverse Effect on the Company. The Company has heretofore made available to Parent true and complete copies of the Company Certificate and bylaws of the Company as currently in effect.

     Section 4.02 Corporate Authorization . The execution, delivery and performance by the Company of this Agreement and any Ancillary Document to which the Company is a party and the consummation by the Company of the Merger and the Transactions are within the Company’s corporate powers and, except for the approval of the Merger (x) by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock in accordance with the terms of the DGCL, the Company Certificate and the bylaws of the Company and (y) by netASPx Holdings, Inc. in accordance with the terms of the Purchase Agreement, dated May 6, 1999, as amended, by and among the Company and certain stockholders of the Company named therein (collectively, the “ Requisite Stockholder Approval ”), have been duly authorized by all necessary corporate action on the part of the Company. The Requisite Stockholder Approval is the only vote of the holders of any of the Company’s capital stock necessary in connection with the consummation of the Merger and the Transactions. This Agreement constitutes a valid and

legally binding agreement of the Company, enforceable in accordance with its terms and conditions, subject to Applicable Laws of general application relating to public policy, bankruptcy, insolvency and the relief of debtors and Applicable Laws governing specific performance, injunctive relief and other equitable remedies.

     Section 4.03 Capitalization . As of the date hereof, the authorized capital stock of the Company consists of 60,000,000 shares of Common Stock, of which there were 47,818,220 shares of Common Stock issued and outstanding. All outstanding shares of Common Stock of the Company are duly authorized, validly issued, fully paid and nonassessable. The Company does not have any outstanding bonds, debentures, notes or other obligations, the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the Company Stockholders on any matter, and except as set forth on Schedule 4.03 of the Company Disclosure Schedules, there are no options, warrants, or other rights (including preemptive rights) or agreements, arrangements, or commitments of any character, whether or not contingent, relating to issued or unissued Common Stock or obligating the Company to issue, redeem, repurchase or otherwise acquire any share of Common Stock, or other equity interest in, the Company. Schedule 4.03 of the Company Disclosure Schedules sets forth, as of the date hereof, each of the Company Stockholders and the number of shares of Common Stock owned by, and the number of shares of Common Stock subject to Options and Warrants owned by, such Company Stockholder and the exercise price per share of any such Options or Warrants. No Subsidiary of the Company owns any shares of Common Stock of the Company. The per share exercise price of each Option was equal to or greater than the fair market value of one share of Common Stock on the grant date of such Option.

     Section 4.04 Governmental Authorization . The execution, delivery and performance by the Company of this Agreement and any Ancillary Document to which the Company is party and the consummation by the Company of the Merger and the Transactions require no action by or in respect of, or filing with, any Governmental Body, other than (i) the filing of the Certificate of Merger with the Delaware Secretary of State pursuant to the DGCL, (ii) compliance with any applicable requirements of the HSR Act, (iii) compliance with any applicable requirements of any applicable securities laws, whether federal, state or foreign and, (iv) any actions or filings the absence of which would not have, individually or in the aggregate, a Material Adverse Effect on the Company or materially impair the ability of the Company to consummate the Merger and the Transactions.

     Section 4.05 Noncontravention . Assuming that all filings, registrations, Permits, authorizations, consents and approvals contemplated by Section 4.04 have been duly made or obtained, as applicable, neither the execution and delivery of this Agreement or any other Ancillary Document to which the Company is party, nor the consummation of the Merger and the Transactions through the Effective Time, will (i) assuming the Requisite Stockholder Approval is obtained, violate any provision of the charter, bylaws or other governing documents of the Company or any of its Subsidiaries, (ii) assuming the approvals set forth on Schedule 4.05 of the Company Disclosure Schedules are obtained, result in a material violation or material breach of, or constitute (with or without due notice or lapse of time or both) a material default (or give rise to any material right of termination, amendment, cancellation or acceleration) under any of the terms of any note, bond, mortgage, indenture, license, contract, lease, or other instrument or obligation to which the Company or any of its Subsidiaries is a party (or result in the

imposition of any Encumbrance (other than Permitted Encumbrances) upon any of its assets) or (iii) violate any Applicable Law or Order applicable to the Company or any of its Subsidiaries; other than in the case of (iii) above, any violation, conflict, breach, default, acceleration, termination, modification, cancellation or notice that, individually or in the aggregate, would not have a Material Adverse Effect on the Company.

     Section 4.06 Subsidiaries .

          (a) Each Subsidiary of the Company is duly formed, validly existing and, to the extent applicable, in good standing under the laws of its jurisdiction of formation. Each such Subsidiary is duly qualified to do business as a foreign company and is in good standing in each other jurisdiction where the transaction of its business requires such qualification, except where the lack of such qualification would not have, individually or in the aggregate, a Material Adverse Effect on the Company. All Subsidiaries of the Company, the Company’s ownership interests therein, and their respective jurisdictions of formation are identified in Schedule 4.06(a) of the Company Disclosure Schedules.

          (b) Except as set forth on Schedule 4.06(b) of the Company Disclosure Schedules, all of the outstanding capital stock of, or other voting securities or ownership interests in, each Subsidiary of the Company is owned by the Company or by one of its Subsidiaries, free and clear of any Encumbrance (other than Permitted Encumbrances). Except as set forth on Schedule 4.06(b) of the Company Disclosure Schedules, there are no outstanding (i) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or other voting securities or ownership interests in any Subsidiary of the Company or (ii) options or other rights to acquire from the Company or any of its Subsidiaries, or other obligation of the Company or any of its Subsidiaries to issue, any capital stock or other voting securities or ownership interests in, or any securities convertible into or exchangeable for any capital stock or other voting securities or ownership interests in, any of its Subsidiaries (the items in clauses (i) and (ii) being referred to collectively as the “ Company Subsidiary Securities ”). There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the Company Subsidiary Securities.

          (c) Other than the Subsidiaries of the Company, neither the Company nor any Subsidiary of the Company owns, directly or indirectly, any shares of capital stock or other equity or ownership interests in, any other Person (collectively, “ Third Party Interests ”). Neither the Company nor any Subsidiary of the Company has any rights to, or is bound by any commitment or obligation to, acquire by any means, directly or indirectly, any Third Party Interests or to make any investment in, or contribution or advance to, any Person.

     Section 4.07 Financial Statements .

          (a) Attached to Schedule 4.07(a) of the Company Disclosure Schedules are true and correct copies of (i) the audited consolidated balance sheet as of December 31, 2006 and the related audited consolidated statements of income and cash flows for the year ended December 31, 2006 and (ii) the unaudited interim consolidated balance sheet (the “ Company Balance Sheet ”) as of July 31, 2007 (the “ Company Balance Sheet Date ”) and the related unaudited interim consolidated statements of income and cash flows for the seven (7) month

period ended July 31, 2007 of the Company and its Subsidiaries (collectively, the “ Company Financial Statements ”).

          (b) Except as indicated on Schedule 4.07(b) of the Company Disclosure Schedules or in the Company Financial Statements (including any notes thereto), the Company Financial Statements were prepared in accordance with GAAP as of the dates or during the periods covered thereby (except, in the case of unaudited statements, for the absence of footnotes thereto and normal year end adjustments) and, in the case of any balance sheet included in the Company Financial Statements, fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the date thereof and, in the case of any income statement or statement of cash flows included in the Company Financial Statements, fairly present in all material respects the consolidated results of operations or cash flows, as applicable, of the Company and its Subsidiaries for the periods then ended (subject, in the case of any unaudited Company Financial Statements, to the absence of footnotes thereto and normal year-end adjustments).

     Section 4.08 Events Subsequent .

          (a) Except as set forth in Schedule 4.08, since the Company Balance Sheet Date through the date hereof, there has not been any Material Adverse Effect on the Company, and, except for the Transactions, the Company and its Subsidiaries have been operated only in the Ordinary Course of Business.

          (b) Except as set forth in Schedule 4.08, since the Company Balance Sheet Date through the date hereof, there has not been any;

               (i) damage, destruction or other casualty, whether or not covered by insurance, materially affecting the Company and its Subsidiaries or any assets material to the business owned, held or used by the Company and its Subsidiaries;

               (ii) transaction or commitment made, or Contract entered into, by the Company or any Subsidiary, or termination or amendment by the Company or any Subsidiary of any Contract, in either case, which is material to the Company and its Subsidiaries, other than transactions, commitments, Contracts, terminations or amendments made in the Ordinary Course of Business;

               (iii) sale or other disposition of assets that are owned, held or used by the Company or any Subsidiary other than in the Ordinary Course of Business;

               (iv) cancellation, compromise, settlement, waiver or release by the Company or any Subsidiary (x) other than in the Ordinary Course of Business of any Proceeding (or a series of related Proceedings) or (y) involving an amount in excess of Fifty Thousand Dollars ($50,000) in the aggregate;

               (v) (A) increase in the compensation or fringe benefits of any present or former director, officer, employee or consultant of the Company or any Subsidiary (except for increases in salary or wages in the Ordinary Course of Business), (B) grant of any severance or termination pay to any present or former director, officer or employee of the Company or any

Subsidiary, (C) establishment, adoption, entrance into, amendment or termination of any Employee Plan or collective bargaining agreement (other than as may be required by the terms of an existing Employee Plan or collective bargaining agreement, or as may be required by Applicable Law or in order to maintain its qualification under Section 401 and 501 of the Code or to provide for the effects of Section 409A of the Code), or (D) grant of any equity or equity-based awards, in the case of each of clauses (A), (B), (C) or (D) above, other than in the Ordinary Course of Business or as may be required under Applicable Law;

               (vi) action taken by the Company or any Subsidiary during the period from July 31, 2007 through the date of this Agreement that, if taken during the period from the date of this Agreement through the Effective Time, would constitute a breach of Section 6.02; or

               (vii) agreement, whether in writing or otherwise, to do any of the foregoing.

     Section 4.09 No Undisclosed Liabilities . There are no liabilities or obligations of the Company or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, other than (i) the liabilities, obligations, conditions or circumstances disclosed and provided for in the Company Balance Sheet, (ii) the liabilities, obligations, conditions or circumstances, which are of a nature that are not required by GAAP to be reflected in the Company Financial Statements, (iii) liabilities or obligations incurred or arising in the Ordinary Course of Business since the Company Balance Sheet Date or in connection with the consummation of Transactions, (iv) the liabilities, obligations, conditions or circumstances which are of a subject matter covered by any of the other representations and warranties of the Company set forth in this Agreement, (v) the liabilities or obligations disclosed in Schedule 4.09 of the Company Disclosure Schedules or (vi) any other liabilities or obligations, which individually or in the aggregate would not reasonably be expected to be material to the Company. Neither the Company nor any of its Subsidiaries has entered into any off-balance sheet financing or has any off-balance sheet indebtedness for borrowed money through a special purpose vehicle or otherwise. Schedule 4.09 of the Company Disclosure Schedules sets forth a list of all of the operating leases to which the Company or any of its Subsidiaries is a party.

     Section 4.10 Taxes .

          (a) The Company and each of its Subsidiaries have filed (or have had filed on their behalf) all Tax Returns required to have been filed, except for Tax Returns the non-filing of which would not have, individually or in the aggregate, a Material Adverse Effect on the Company. The Company and its Subsidiaries have not requested or obtained any extension of time within which to file any Tax Return, which Tax Return has not since been filed. All Taxes required to have been paid by the Company and its Subsidiaries (whether or not shown on any Tax Return) have been paid or are currently being disputed in good faith and have been fully reserved against in the Company Financial Statements.

          (b) There is no audit or other proceeding presently pending or, to the Knowledge of the Company, Threatened with regard to any Tax matter concerning the Company and its Subsidiaries. Neither the Company nor any of its Subsidiaries has received a written ruling from any Taxing Authority relating to any Tax or entered into a written agreement with a

Taxing Authority relating to any Tax that would have continuing effect with respect to any taxable period for which the Company or any of its Subsidiaries, respectively, has not filed a Tax Return, and there are no requests for issuance of such a ruling pending on behalf of the Company or any of its Subsidiaries.

          (c) Neither the Company nor any of its Subsidiaries, nor any person on behalf of the Company or its Subsidiaries, has waived any statute of limitations or agreed to any extension of time that has continuing effect with respect to assessment or collection of any Tax for which the Company or its Subsidiaries may be held liable.

          (d) Except as set forth on Schedule 4.10(d) of the Company Disclosure Schedules, neither the Company nor any of its Subsidiaries is a party to any contract or arrangement covering any current or former employee or consultant of the Company or any of its Subsidiaries that would require it to make or give rise to any payment in connection with the Merger and the Transactions that would constitute an “ excess parachute payment ” within the meaning of Section 280G of the Code. Schedule 1.01 lists all bonuses payable to current and former employees and consultants of the Company and each of its Subsidiaries as a result of the consummation of the Merger.

          (e) Neither the Company nor any of the Subsidiaries has made or agreed to make, or is required to make, any change in method of accounting which would require it to make any material positive adjustment to its taxable income pursuant to Section 481(a) of the Code (or any similar provision) in any taxable period for which the Company or any Subsidiary has not filed a Tax Return, and no application is pending with any Taxing Authority requesting permission for the Company or any of its Subsidiaries to make any change in any accounting method which would require such an adjustment, nor has the Company or any of its Subsidiaries received any written notice that a Taxing Authority proposes to require a change in method of accounting that would require such an adjustment.

          (f) Neither the Company nor any of its Subsidiaries has been a party to any Tax allocation, Tax sharing or similar agreement or arrangement the principal purpose of which is or was the allocation of Tax liabilities computed on a consolidated, combined, unitary or similar basis (a “ Group Return ”) among entities that have been or will be required to compute their Tax liability by filing on such a basis. Neither the Company nor any of its Subsidiaries (i) has been a member of an “ affiliated group ” (within the meaning of Section 1504 of the Code) filing a consolidated federal income Tax Return, or included or required to be included in any other group of entities filing or required to file any other type of Group Return, other than a group of which the Company is the common parent, that would cause the Company or any of its Subsidiaries to be liable for Taxes under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), or (ii) is liable for Taxes of another Person having liability on the basis described in (i) either by contract or by reason of being a transferee or successor of such a Person.

          (g) Neither the Company nor any of its Subsidiaries has any deferred income for Tax purposes the recognition of which would give rise to a material Tax liability of the Company or any of its Subsidiaries that is attributable to (i) any intercompany transaction (as defined in Treasury Regulation Section 1.1502-13), or (ii) the disposal of any property in a

transaction accounted for under the installment method pursuant to Section 453 of the Code, except to the extent, in either case, reserved for in the Company Financial Statements.

          (h) Neither the Company nor any of its Subsidiaries has, in the two (2) years preceding the date of this Agreement, constituted (or has been included, or is required to be included, in a Tax Return for a group of entities filing income Tax Returns on a consolidated, combined, unitary or similar basis during a taxable period that included another corporation which constituted during such taxable period) either a “ distributing corporation ” or a “ controlled corporation ” within the meaning of Section 355(a)(1)(A) of the Code in a distribution qualifying (or intended to qualify) under Section 355 of the Code (or so much of Section 356 as relates to Section 355).

          (i) Schedule 4.10(i) of the Company Disclosure Schedules identifies all material Tax Returns that each of the Company and its Subsidiaries has filed for taxable periods ending after December 31, 2003 and the taxable period covered by each such Tax Return, and identifies those Tax Returns or periods that have been audited by a Taxing Authority. The Company has made available to Parent complete and accurate copies of all of the following materials: (i) all income Tax Returns filed by or with respect to the Company and its Subsidiaries that relate to taxable periods ending after December 31, 2003, (ii) all examination reports relating to Taxes of the Company and its Subsidiaries issued after December 31, 2003, and (iii) all statements of Taxes assessed after December 31, 2003, against the Company and its Subsidiaries in excess of amounts shown on Tax Returns filed for the relevant taxable period before such assessment.

          (j) Neither the Company nor any Subsidiary is a party to, is bound by, or has any obligation under, any Tax indemnification agreement or similar contract or arrangement which obligates the Company or any Subsidiary to make payments to another person determined with respect to Tax obligations of such person (other than, pursuant to contracts that do not have a principal purpose to provide indemnification for Tax obligations and in which such Tax-related obligations are customarily included in commercial agreements of a similar character).

     Section 4.11 Properties .

          (a) Neither the Company nor any of its Subsidiaries own any Real Property.

          (b) Schedule 4.11(b) of the Company Disclosure Schedules lists the addresses of all Real Property leased (the “ Leased Real Property ”) by the Company or any of its Subsidiaries as of the date hereof and lists each lease agreement to which the Company or any of its Subsidiaries is a party with respect to the Leased Real Property (each, a “ Lease ”). The Company has made available to Parent copies of all of the Leases, and all written modifications, amendments and supplements thereto which copies are true and complete in all material respects. Except as disclosed on Schedule 4.11(b) of the Company Disclosure Schedules:

               (i) each of the Leases was made in the Ordinary Course of Business and is valid, binding and currently in full force and effect;

               (ii) to the Knowledge of the Company, no material default or material preemptive right by any landlord under any Lease, after applicable grace periods, if any, exists as of the date hereof;

               (iii) the Company has not received any written notice alleging a material default by the Company or any of its Subsidiaries under any Lease and (A) there are no material defaults by the Company or any of its Subsidiaries under any Lease that would entitle a landlord thereunder to terminate such Lease, and (B) to the Knowledge of the Company, no event has occurred which, through the passage of time or the giving of notice, or both, would constitute a material default by the Company or any of its Subsidiaries;

               (iv) neither the Company nor any of its Subsidiaries is obligated to pay any leasing or brokerage commission relating to any Lease or upon the renewal of any Lease; and

               (v) no construction, alteration or other leasehold improvement work with respect to any of the Leases remains to be paid for or to be performed by the Company or any of its Subsidiaries.

          (c) Schedule 4.11(c) of the Company Disclosure Schedules attached hereto sets forth a true, correct and complete list of all items of tangible personal property owned by the Company or any of its Subsidiaries as of the date hereof having either a net book value per unit or an estimated book value per unit in excess of Five Thousand Dollars ($5,000); or not owned by the Company or any of its Subsidiaries but in the possession of or used or useful in the business of the Company or any of its Subsidiaries and having rental payments therefor in excess of One Thousand Dollars ($1,000) per month or Twelve Thousand Dollars ($12,000) per year (collectively, the “ Personal Property ”). The Company and each of its Subsidiaries have good and marketable title to, or a valid leasehold interest in, all of their Personal Property and assets shown on the Company Balance Sheet or acquired by any of them after the date of the Company Balance Sheet, free and clear of any Encumbrances, except for (i) assets which have been disposed of since the date of the Company Balance Sheet in the Ordinary Course of Business, (ii) Encumbrances reflected in the Company Balance Sheet, (iii) Encumbrances related to the Lender Debt, all of which will be released or extinguished as of the Effective Time, and (iv) Permitted Encumbrances or other Encumbrances which would not have, individually or in the aggregate, a Material Adverse Effect on the Company.

          (d) The continued use, occupancy and operation of the Leased Real Property as currently used, occupied and operated by the Company or any of its Subsidiaries, do not, to the Knowledge of the Company, violate any material applicable building, zoning, subdivision, other land use and similar laws, regulations and ordinances or any material license, franchise, permit, certificate, approval or other similar authorization of a Governmental Body.

          (e) No representation or warranty is made in this Section 4.11 with respect to any Company Intellectual Property that is the subject of Section 4.12.

     Section 4.12 Intellectual Property . Schedule 4.12 of the Company Disclosure Schedules hereto contains a correct and complete list of all issued patents, registered trademarks

and registered copyrights and pending applications for patents, trademarks and copyrights owned by (as opposed to licensed to) the Company or any of its Subsidiaries and all material agreements (“ Material IP Agreements ”) pursuant to which the Company or any of its Subsidiaries has received a license or sub-license with respect to any material item of Intellectual Property (excluding any off-the-shelf software products). Except as set forth in Schedule 4.12 of the Company Disclosure Schedules, (i) each of the Company and its Subsidiaries owns or has the right to use all Intellectual Property material to or necessary for the operation of the business of the Company and its Subsidiaries (the “ Company Intellectual Property ”), (ii) to the Knowledge of the Company, no Person is infringing, misappropriating or diluting any material items of Company Intellectual Property owned by the Company, (iii) none of the material items of Company Intellectual Property owned by the Company has been misappropriated or is infringing upon the Intellectual Property of any Third Party, (iv) all of the Material IP Agreements are valid, binding and currently in full force and effect, (v) neither the Company nor any of its Subsidiaries is in material default under any Material IP Agreement, and (vi) immediately after the Closing and to the Knowledge of the Company, the Company Intellectual Property will be owned by or available for use by the Company and its Subsidiaries on terms and conditions substantially identical to those under which the Company and its Subsidiaries owned or used the Company Intellectual Property immediately prior to the Closing. The Company and its Subsidiaries have taken all material steps customary and reasonable in their industries to protect and preserve the confidential nature of all Confidential Information of the Company or its Subsidiaries.

     Section 4.13 Contracts .

          (a) Schedule 4.13(a) of the Company Disclosure Schedules lists all of the following written Contracts to which the Company or any of its Subsidiaries is a party (other than Leases): (i) any Contract the performance of which requires payment by or to the Company or any of its Subsidiaries in excess of Fifty Thousand Dollars ($50,000), (ii) any Contract concerning the establishment by the Company or any Subsidiary of a partnership, joint venture or similar arrangement, including any Subsidiary, and any Contract between the Company or any Subsidiary of the Company, on the one hand, and any Subsidiary of the Company on the other hand, (iii) any Contract containing a non-competition, non-solicitation or similar covenant which restricts the Company’s operations in any geographic area, in any line of business or with any Third Party, (iv) any Contract for the acquisition of capital stock or all or substantially all assets of another Person or a division thereof (whether by merger, stock or asset purchase), (v) any Contract regarding dispositions of any assets of the Company or any Subsidiary other than the sale of inventory in the Ordinary Course of Business or with a value less than Fifty Thousand Dollars ($50,000), (vi) any employment agreements or employment-related agreements with any employee that results in any severance pay or the acceleration or triggering of benefits or rights thereunder as a result of the transactions contemplated by this Agreement, and (vii) any Contract involving any resolution or settlement of any actual or threatened Proceeding with a value of greater than Fifty Thousand Dollars ($50,000). All of the Contracts required to be listed in Schedule 4.13(a) of the Company Disclosure Schedules hereto are referred to in this Agreement as the “ Material Contracts .” The Company has made available to Parent a correct and complete copy of each Material Contract which copies are true and complete in all material respects.

          (b) All of the Material Contracts are valid, binding and currently in full force and effect. Neither the Company nor any of its Subsidiaries is in material default under any of the Material Contracts, and, to the Knowledge of the Company, no event has occurred which, through the passage of time or the giving of notice, or both, would constitute a default by the Company or any of its Subsidiaries or give rise to a right of termination or cancellation by another party under any of the Material Contracts. To the Knowledge of the Company, no other Person is in default under any of the Material Contracts. Except as described in Schedule 4.13(a) of the Company Disclosure Schedules hereto, none of the Material Contracts has been cancelled, terminated, amended or modified. Except as set forth in Schedule 4.05 of the Company Disclosure Schedules, neither the execution and delivery of this Agreement by the Company, the performance by it of its obligations hereunder, nor the consummation by it of the transactions contemplated hereby, will require any consent of any party or written notice to any party, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default), or give rise to any right of termination, change of control rights, cancellation, modification, revocation or acceleration of any right or obligation of the Company or any of its Subsidiaries.

     Section 4.14 Legal Compliance . Except as set forth in Schedule 4.14 of the Company Disclosure Schedules, the Company and each of its Subsidiaries have complied with all Applicable Laws and Orders of any Governmental Body except where the failure to comply would not have a Material Adverse Effect on the Company. Except as set forth in Schedule 4.14 of the Company Disclosure Schedules, neither the Company nor any of its Subsidiaries has received any written notice of, and the Company has no Knowledge of, any violation of a material nature of any Applicable Laws and/or Orders applicable to the Company or any of its Subsidiaries. None of the Company nor any of its Subsidiaries has outstanding securities that are required to be registered under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”).

     Section 4.15 Proceedings and Orders . Except as set forth in Schedule 4.15 of the Company Disclosure Schedules, neither the Company nor any of its Subsidiaries (i) are subject to or affected by any outstanding Order, or (ii) are parties to any pending Proceeding or, to the Knowledge of the Company, Threatened Proceeding, which, in each case, is material to the Company.

     Section 4.16 Labor Matters . Except as set forth on Schedule 4.16 of the Company Disclosure Schedules, the Company and its Subsidiaries are in compliance with all Applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and are not engaged in any unfair labor practice, failure to comply with which or engagement in which, as the case may be, would have a Material Adverse Effect on the Company. There is no unfair labor practice complaint pending or, to the Knowledge of the Company, Threatened against the Company or any of its Subsidiaries before the National Labor Relations Board. Schedule 4.16 of the Company Disclosure Schedules contains a list of all employees of the Company and each Subsidiary as of the date hereof whose annual rate of compensation exceeds $50,000 per year, along with the position and the annual rate of compensation of each such person. Each such employee has entered into an Employee Agreement containing confidentiality, assignment of inventions and non-solicitation provisions with the Company or a Subsidiary, a form of which has previously been delivered to the Buyer.

To the Knowledge of the Company, prior to the date hereof, no key employee or group of employees has notified the Company in writing that he or she intends to terminate employment with the Company or any Subsidiary as a result of the Merger. Neither the Company nor any Subsidiary is a party to or bound by any collective bargaining agreement, nor has any of them experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes. The Company has no Knowledge of any organizational effort made or Threatened, either currently or within the past two years, by or on behalf of any