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ARTICLE I THE MERGER

1

1.1

The Merger

1

1.2

The Closing

1

1.3

Actions at the Closing

1

1.4

Additional Action

2

1.5

Conversion of Shares

2

1.6

Adjustments to Purchase Price

3

1.7

Dissenting Shares

5

1.8

Earnout

5

1.9

Escrow

8

1.10

Indemnification Representative

9

1.11

Currency

10

1.12

Certificate of Incorporation and By-laws

10

1.13

No Further Rights

11

1.14

Closing of Transfer Books

11

1.15

Withholding

11

1.16

Fractional Shares

11

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY

11

2.1

Organization, Qualification and Corporate Power

12

2.2

Capitalization

12

2.3

Authorization of Transaction

13

2.4

Noncontravention

14

2.5

Subsidiaries

14

2.6

Financial Statements

14

2.7

Absence of Certain Changes

14

2.8

Undisclosed Liabilities

14

2.9

Tax Matters

15

2.10

Assets

18

2.11

Owned Real Property

18

2.12

Real Property Leases

18

2.13

Intellectual Property

19

2.14

Contracts

20

2.15

Accounts Receivable

21

2.16

Powers of Attorney

21

2.17

Insurance

21

2.18

Litigation

22

2.19

Employees

22

2.20

Employee Benefits

23

2.21

Environmental Matters

26

2.22

Legal Compliance

26

2.23

Existing Customers and Suppliers

27

2.24

Permits

27

2.25

Certain Business Relationships With Affiliates

27

2.26

Books and Records

27

2.27

Brokers Fees

27

2.28

Guarantees

27

2.29

Export and Industrial Security

27

2.30

Earnout and Contingent Payments

28

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE TRANSITORY SUBSIDIARY

28

3.1

Organization and Corporate Power

28

3.2

Authorization of Transaction

28

3.3

Noncontravention

29

3.4

Litigation

29

3.5

Financing

29

3.6

Export and Industrial Security

29

3.7

Capitalization

30

3.8

Reports and Financial Statements

30

3.9

Solvency

30

ARTICLE IV COVENANTS

31

4.1

Closing Efforts

31

4.2

Governmental and Third-Party Notices and Consents

31

4.3

Stockholder Approval

32

4.4

Operation of Business

32

4.5

Access to Information

34

4.6

Expenses

35

4.7

Director and Officer Indemnification

35

4.8

Repayment of Debt; Distribution of Cash

36

4.9

Employment Matters

36

4.10

Stock Options

37

4.11

FIRPTA Tax Certificates

37

4.12

S Corporation Status

38

4.13

Withholding Forms

38

4.14

Export and Industrial Security

38

4.15

Registration of Stock Consideration

38

4.16

Notification

40

4.17

Tax Matters

40

4.18

Financial Statements

45

4.19

Real Property Leases

45

4.20

Company Unvested Stock Options

45

4.21

Financing

45

4.22

Letters of Credit

46

ARTICLE V CONDITIONS TO CONSUMMATION OF MERGER

46

5.1

Conditions to Each Partys Obligations

46

5.2

Conditions to Obligations of the Buyer and the Transitory Subsidiary

46

5.3

Conditions to Obligations of the Company

47

ARTICLE VI INDEMNIFICATION

48

6.1

Indemnification by the Company Stockholders

48

6.2

Indemnification by the Buyer

49

6.3

Indemnification Claims

49

6.4

Survival of Representations and Warranties

52

6.5

Limitations

53

6.6

Treatment of Indemnity Payments

54

ARTICLE VII TERMINATION

54

7.1

Termination of Agreement

54

7.2

Effect of Termination

55

ARTICLE VIII DEFINITIONS

56

ARTICLE IX MISCELLANEOUS

67

9.1

Press Releases and Announcements

67

9.2

No Third-Party Beneficiaries

67

9.3

Entire Agreement

67

9.4

Succession and Assignment

67

9.5

Counterparts and Facsimile Signature

67

9.6

Headings

68

9.7

Notices

68

9.8

Governing Law

68

9.9

Amendments and Waivers

69

9.10

Severability

69

9.11

Submission to Jurisdiction

69

9.12

Construction

69

9.13

Specific Performance

70

Exhibit A

Form of Promissory Note

Exhibit B

Allocation Schedule

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