exv2w1

Exhibit 2.1

EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER

Dated as of August 27, 2007

among

MEDCO HEALTH SOLUTIONS, INC.,

MACQ CORP.

and

POLYMEDICA CORPORATION

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER, dated as of August 27, 2007 (this “Agreement”), is among MEDCO HEALTH SOLUTIONS, INC., a Delaware corporation (“Parent”), MACQ CORP., a Massachusetts corporation and a wholly owned Subsidiary of Parent (“Merger Sub”), and POLYMEDICA CORPORATION, a Massachusetts corporation (the “Company”). Certain terms used in this Agreement are used as defined in Section 8.11.

WHEREAS, the Board of Directors of each of the Company and Merger Sub has approved and declared advisable, and in the best interests of the Company and Merger Sub, as applicable, and the Board of Directors of Parent has approved, this Agreement and the merger of Merger Sub with and into the Company (the “Merger”) upon the terms and subject to the conditions set forth in this Agreement.

WHEREAS, prior to or contemporaneously with the execution and delivery of this Agreement, certain executives of the Company have executed and delivered to Parent certain letter agreements confirming that they will remain employed by the Company following the Closing contemplated by this Agreement.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, Parent, Merger Sub and the Company hereby agree as follows:

ARTICLE I

The Merger

SECTION 1.1 The Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Massachusetts Business Corporation Act (the “MBCA”), at the Effective Time Merger Sub shall be merged with and into the Company, and the separate corporate existence of Merger Sub shall thereupon cease, and the Company shall be the surviving corporation in the Merger (the “Surviving Corporation”).

SECTION 1.2 Closing. The closing of the Merger (the “Closing”) shall take place at 10:00 a.m. (New York time) on a date to be specified by the parties, which date shall be no later than the second business day after satisfaction or waiver of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time), at the offices of Weil, Gotshal & Manges LLP, 100 Federal Street, 34th Floor, Boston, Massachusetts 02110, unless another time, date or place is agreed to in writing by the parties hereto. The date on which the Closing actually occurs hereinafter is referred to as the “Closing Date”.

SECTION 1.3 Effective Time. Subject to the provisions of this Agreement, as soon as practicable on the Closing Date the parties shall file with the Secretary of the Commonwealth of Massachusetts articles of merger, executed in accordance with, and in such form as is required by, the relevant provisions of the MBCA (the “Articles of Merger”).

The Merger shall become effective upon the filing of the Articles of Merger or at such later time and date as is agreed to by the parties hereto (the time and date at which the Merger becomes effective is herein referred to as the “Effective Time”).

SECTION 1.4 Effects of the Merger. The Merger shall have the effects set forth herein and in applicable provisions of the MBCA. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

SECTION 1.5 Articles of Organization and By-laws of the Surviving Corporation. The articles of organization of the Company shall be amended and restated in their entirety at the Effective Time to be substantially in the form attached hereto as Exhibit A. At the Effective Time, the by-laws of the Company shall be amended in their entirety at the Effective Time to be substantially in the form attached hereto as Exhibit B.

SECTION 1.6 Directors and Officers of the Surviving Corporation.

(a) Each of the parties hereto shall take all necessary action to cause the directors of Merger Sub immediately prior to the Effective Time to be the directors of the Surviving Corporation immediately following the Effective Time, until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal in accordance with the articles of organization and by-laws of the Surviving Corporation.

(b) Each of the parties hereto shall take all necessary action to cause the officers of Merger Sub immediately prior to the Effective Time to be the officers of the Surviving Corporation until their respective successors are duly appointed and qualified or their earlier death, resignation or removal in accordance with the articles of organization and by-laws of the Surviving Corporation.

ARTICLE II

Effect of the Merger on the Capital Stock of the Constituent Corporations;
Exchange of Certificates; Company Stock Options

SECTION 2.1 Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of Merger Sub, the Company or the holders of any shares of common stock, par value $0.01 per share, of the Company (“Company Common Stock”) or any shares of capital stock of Merger Sub:

(a) Capital Stock of Merger Sub. Each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.

(b) Parent-Owned Stock. Any shares of Company Common Stock owned by Parent or Merger Sub shall be automatically canceled and shall cease to exist and no consideration shall be delivered in exchange therefor.

(c) Conversion of Company Common Stock. Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than shares to be canceled in accordance with Section 2.1(b) and Dissenting Shares) shall be converted into the right to receive $53.00 in cash, without interest (the “Merger Consideration”). As of the Effective Time, all such shares of Company Common Stock shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of a certificate (or evidence of shares in book-entry form) which immediately prior to the Effective Time represented any such shares of Company Common Stock (each, a “Certificate”) shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration to be paid in consideration therefor upon surrender of such Certificate in accordance with Section 2.2(b), without interest.

SECTION 2.2 Exchange of Certificates.

(a) Paying Agent. Prior to the Effective Time, Parent shall designate Equiserve Trust Company or another bank or trust company reasonably acceptable to the Company to act as agent for the holders of shares of Company Common Stock in connection with the Merger (the “Paying Agent”) to receive, on terms reasonably acceptable to the Company, for the benefit of holders of shares of Company Common Stock, the aggregate Merger Consideration to which holders of shares of Company Common Stock shall become entitled pursuant to Section 2.1(c). Parent shall deposit, or cause to be deposited, such aggregate Merger Consideration with the Paying Agent at or prior to the Effective Time. The Paying Agent shall invest such aggregate Merger Consideration in any of (i) direct obligations of the United States of America, (ii) obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of principal and interest, (iii) commercial paper rated the highest quality by either Moody’s Investors Service, Inc. or Standard and Poor’s Ratings Services or (iv) money market funds investing solely in a combination of the foregoing. Any net profit resulting from, or income or interest produced by, such investments, shall be payable to Parent.

(b) Payment Procedures. Promptly after the Effective Time (but in no event more than five business days thereafter), the Surviving Corporation shall cause the Paying Agent to mail to each holder of record of Company Common Stock (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent, and which shall be in such form and shall have such other customary provisions (including customary provisions with respect to delivery of an “agent’s message” with respect to shares held in book-entry form) as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for payment of the Merger Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions (and such other customary documents as may reasonably be required by the Paying Agent), the holder of such Certificate shall be entitled to receive in exchange therefor the Merger

Consideration, without interest, for each share of Company Common Stock formerly represented by such Certificate, and the Certificate so surrendered shall forthwith be canceled. No interest will be paid or accrued on any amount payable upon due surrender of the Certificates. If payment of the Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition of payment that (x) the Certificate so surrendered shall be properly endorsed or shall otherwise be in proper form for transfer and be accompanied by all documents required to evidence such transfer and (y) the Person requesting such payment shall have paid any transfer and other Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of such Certificate surrendered or shall have established to the reasonable satisfaction of the Surviving Corporation that such Taxes either have been paid or are not applicable. Until surrendered as contemplated by this Section 2.2, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration as contemplated by this Article II, without interest.

(c) Transfer Books; No Further Ownership Rights in Company Stock. The Merger Consideration paid in respect of shares of Company Common Stock upon the surrender for exchange of Certificates in accordance with the terms of this Article II shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock previously represented by such Certificates, and at the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time. From and after the Effective Time, the holders of Certificates that evidenced ownership of shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares of Company Common Stock, except as otherwise provided for herein or by applicable Law. Subject to the last sentence of Section 2.2(e), if, at any time after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article II.

(d) Lost, Stolen or Destroyed Certificates. If any Certificate shall have been 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 and, if required by the Surviving Corporation, the posting by such Person of a bond, in such reasonable amount as Parent may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will pay, in exchange for such lost, stolen or destroyed Certificate, the applicable Merger Consideration to be paid in respect of the shares of Company Common Stock formerly represented by such Certificate, as contemplated by this Article II.

(e) Termination of Fund. At any time following the six-month anniversary of the Closing Date, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) that had been made available to the Paying Agent and which have not been disbursed to holders of Certificates, and thereafter such holders shall be entitled to look only to Parent or the Surviving Corporation (subject to abandoned property, escheat or other similar Laws) as

general creditors thereof with respect to the payment of any Merger Consideration that may be payable upon surrender of any Certificates held by such holders, as determined pursuant to this Agreement, without any interest thereon. Any amounts remaining unclaimed by such holders at such time at which such amounts would otherwise escheat to or become property of any Governmental Authority shall become, to the extent permitted by applicable Law, the property of Parent, free and clear of all claims or interest of any Person previously entitled thereto.

(f) No Liability. Notwithstanding any provision of this Agreement to the contrary, none of the parties hereto, the Surviving Corporation or the Paying Agent shall be liable to any Person for Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

(g) Withholding Taxes. Parent, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable to a holder of shares of Company Common Stock pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “Code”), or under any provision of state, local or foreign Tax Law. The withholding party shall timely remit such withheld amounts to the appropriate taxing authority, and such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. If any withholding obligation may be avoided by such holder providing information or documentation to Parent, the Surviving Corporation or the Paying Agent, such information shall be requested prior to any such withholding.

SECTION 2.3 Appraisal/Dissenters’ Rights. Notwithstanding anything in this Agreement to the contrary, shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time and which are held by a shareholder who did not vote in favor of the Merger (or consent thereto in writing) and who is entitled to demand and properly demands appraisal of such shares (the “Dissenting Shares”) pursuant to, and who complies in all respects with, the provisions of Part 13 of the MBCA (the “Dissenting Shareholders”), shall not be converted into or be exchangeable for the right to receive the Merger Consideration, but instead such holder shall be entitled to payment of the fair value of such shares in accordance with the provisions of Part 13 of the MBCA (and at the Effective Time, such Dissenting Shares shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and such holder shall cease to have any rights with respect thereto, except the right to receive the fair value of such Dissenting Shares in accordance with the provisions of Part 13 of the MBCA), unless and until such holder shall have failed to perfect or shall have effectively withdrawn or lost rights to appraisal under the MBCA. If any Dissenting Shareholder shall have failed to perfect or shall have effectively withdrawn or lost such right, such holder’s shares of Company Common Stock shall thereupon be treated as if they had been converted into and become exchangeable for the right to receive, as of the Effective Time, the Merger Consideration for each such share of Company Common Stock, in accordance with Section 2.1, without any interest thereon. The Company shall give Parent (i) prompt notice of any written demands for appraisal of any shares of Company Common Stock, attempted withdrawals of such demands and any other

instruments served pursuant to the MBCA and received by the Company relating to shareholders’ rights of appraisal, and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to demands for appraisal under the MBCA.

SECTION 2.4 Company Stock Options and Restricted Shares.

(a) The Company shall provide that, at the Effective Time, all options outstanding immediately prior to the Effective Time that represent the right to acquire shares of Company Common Stock (each, an “Option”) granted under any plan listed in Section 2.4 of the Company Disclosure Schedule (a “Company Stock Plan”) shall be cancelled and each holder of an Option, whether or not vested, shall be paid in full satisfaction of such Option, a cash amount equal to the Option Consideration for each share of Company Common Stock then subject to the Option, including any such shares as to which the Option has not vested. For purposes of this Agreement, “Option Consideration” means, with respect to any share of Company Common Stock issuable under a particular Option, an amount equal to the excess, if any, of (i) the Merger Consideration per share of Company Common Stock over (ii) the exercise price payable in respect of such share of Company Common Stock issuable under such Option. The cash payments to be made to holders of Options pursuant to this Section 2.4(a) shall be made by the Surviving Corporation as soon as reasonably practicable after the Closing Date.

(b) The Company shall provide that each share of Company Common Stock granted subject to vesting or other lapse restrictions pursuant to any Company Stock Plan (the “Company Restricted Common Stock”) which is outstanding immediately prior to the Effective Time shall vest and become free of such restrictions as of the Effective Time and at the Effective Time the holder thereof shall, subject to this Article II, be entitled to receive the Merger Consideration with respect to each such Company Restricted Common Stock.

(c) Withholding Taxes. Parent, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable to a holder of any Option or any shares of Company Restricted Common Stock pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Code or under any provision of state, local or foreign Tax Law. The withholding party shall timely remit such withheld amounts to the appropriate taxing authority, and such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. If any withholding obligation may be avoided by such holder providing information or documentation to Parent, the Surviving Corporation or the Paying Agent, such information shall be requested prior to any such withholding.

(d) At or prior to the Effective Time, the Company, the Board of Directors and the compensation committee, as applicable, shall adopt any resolutions and take any actions which are necessary to effectuate the provisions of Section 2.4(a) and 2.4(b). The Company shall take all actions necessary to ensure that from and after the Effective Time neither Parent nor the Surviving Corporation will be required to deliver shares of Company Common Stock or other capital stock of the Company to any Person pursuant to or in

settlement of Company Options or Company Restricted Common Stock after the Effective Time.

SECTION 2.5 Treatment of the Warrants. The Warrants shall be treated as set forth in Section 5.14.

SECTION 2.6 Adjustments. Notwithstanding any provision of this Article II to the contrary, if between the date of this Agreement and the Effective Time the outstanding shares of Company Common Stock shall have been changed into a different number of shares or a different class by reason of the occurrence or record date of any stock dividend, subdivision, reclassification, recapitalization, split, combination, exchange of shares or similar transaction, the Merger Consideration shall be appropriately adjusted to reflect such stock dividend, subdivision, reclassification, recapitalization, split, combination, exchange of shares or similar transaction.

ARTICLE III

Representations and Warranties of the Company

Except as disclosed in (a) the disclosure schedule delivered by the Company to Parent (the “Company Disclosure Schedule”) prior to the execution of this Agreement (with specific reference to the section of this Agreement to which the information stated in such disclosure relates; provided that (i) disclosure in any section of such Company Disclosure Schedule shall be deemed to be disclosed with respect to any other section of this Agreement only to the extent that it is reasonably apparent on the face of the Company Disclosure Schedule that such disclosure is applicable to such other section notwithstanding the omission of a reference or cross reference thereto and (ii) the mere inclusion of an item in such Company Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had, would have or would reasonably be expected to have a Material Adverse Effect) or (b) in the Company SEC Documents filed on or after June 13, 2005 and prior to the date of this Agreement, but excluding (x) any risk factor disclosure contained in any such Company SEC Documents under the heading “Risk Factors” or “Cautionary Note Regarding Forward-Looking Statements” or similar heading and (y) all exhibits and schedules thereto and documents incorporated by reference therein, the Company hereby represents and warrants, on behalf of itself and each of its Subsidiaries, on a joint and several basis, to Parent and Merger Sub as follows:

SECTION 3.1 Organization, Standing and Corporate Power.

(a) The Company is a corporation duly organized, validly existing and in good standing under the Laws of the Commonwealth of Massachusetts and has all requisite corporate power and authority necessary to own, lease and operate all of its properties and assets and to carry on its business as it is now being conducted. The Company is duly licensed or qualified to do business and is in good standing (or equivalent status) in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification

necessary, except where the failure to be so licensed, qualified or in good standing (or equivalent status) does not have, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. For purposes of this Agreement, “Material Adverse Effect” means any change, circumstance, event, occurrence or effect that has occurred that, when taken together with all other adverse changes, circumstances, events, occurrences or effects that have occurred, is or is reasonably likely to be, materially adverse to the business, assets, liabilities, results of operations or financial condition of the Company and its Subsidiaries taken as a whole, except to the extent resulting from (i) (A) the general economic conditions in the United States or any change in any United States federal or state statute, rule or regulation or any change in Medicare, Medicaid or other governmental healthcare reimbursement policy, or (B) the commencement, continuation or escalation of a war or a material act of terrorism; provided that with respect to clauses (i)(A) and (i)(B), such changes, circumstances, events, occurrences or effects do not adversely affect the Company and its Subsidiaries in a meaningfully disproportionate manner as compared to other companies of similar size in such industries in which the Company and its Subsidiaries operate; (ii) resulting from or attributable to any loss of, or adverse change in, the relationship of the Company with its customers, employees or suppliers that was proximately caused by the announcement of this Agreement or the consummation of the Transactions or (iii) any decline in the market price or change in trading volume of the capital stock of the Company or any failure to meet publicly announced revenue or earnings projections (it being understood that the underlying cause or causes of any such decline, change or failure may be deemed to constitute, in and of itself or themselves, a Material Adverse Effect and may be taken into consideration when determining whether there has occurred a Material Adverse Effect).

(b) Each of the Company’s Subsidiaries is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization. The name and jurisdiction of organization of each Subsidiary is set forth on Section 3.1(b) of the Company Disclosure Schedule. All the outstanding shares of capital stock of, or other equity interests in, each such Subsidiary are owned directly or indirectly by the Company free and clear of all liens, pledges, security interests and transfer restrictions, except for such transfer restrictions of general applicability as may be provided under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), and other applicable securities Laws. Each of the Company’s Subsidiaries has all requisite corporate power and authority necessary to own, lease and operate all of its properties and assets and to carry on its businesses as they are now being conducted. Each of the Company’s Subsidiaries is duly licensed or qualified to do business in, and is in good standing (or equivalent status) in, each jurisdiction in which the nature of the business conducted by such Subsidiary, or the character or location of the properties and assets owned or leased by such Subsidiary, makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing (or equivalent status) does not have, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(c) The Company has made available to Parent complete and correct copies of the articles of organization and by-laws of the Company and the organizational documents of each of its Subsidiaries, as amended to the date of this Agreement (the “Company Charter Documents”).

SECTION 3.2 Capitalization.

(a) The authorized capital stock of the Company consists of fifty million (50,000,000) shares of Company Common Stock and three million one hundred twelve thousand one hundred sixty-four (3,112,164) shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). At the close of business on August 24, 2007 (the “Reference Date”) (except for the 4,530,586 shares of Company Common Stock referred to in clause (ii) below, which is true as of March 31, 2007), (i) 23,464,250 shares of Company Common Stock were issued and outstanding (of which 503,480 shares were Company Restricted Stock), (ii) 4,530,586 shares of Company Common Stock were reserved for issuance under the Company Stock Plans (of which 2,842,303 shares of Company Common Stock were subject to outstanding Options granted under the Company Stock Plans) and 11,798,426 shares of Company Common Stock were reserved for issuance upon conversion of the Notes and Warrants and (iii) no shares of Company Preferred Stock were issued or outstanding. Since the Reference Date, no shares of Company Common Stock or Company Preferred Stock have been issued except pursuant to the exercise of Options granted under Company Stock Plans as of the close of Business on the Reference Date. The Company has made available to Parent a correct and complete list, as of July 31, 2007, of Options and Company Restricted Stock, including the holder, date of grant, term, number of shares of Company Common Stock and, where applicable, exercise price and vesting schedule, including whether the vesting will be accelerated by the execution of this Agreement or consummation of the Merger or by termination of employment or change of position following consummation of the Merger. Section 3.2(a) of the Company Disclosure Schedule contains a correct and complete list of Options and Company Restricted Stock granted or issued since July 31, 2007, including, with respect to each, the information specified in the previous sentence. All outstanding shares of the capital stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. Except as set forth above, (A) there are no outstanding options or other rights of any kind which obligate the Company or any of its Subsidiaries to issue or deliver any shares of capital stock, voting securities or other equity interests of the Company or any securities or obligations convertible into or exchangeable into or exercisable for any shares of capital stock, voting securities or other equity interests of the Company (collectively, “Company Securities”); (B) there are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities; and (C) there are no other options, calls, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company to which the Company or any of its Subsidiaries is a party. No bonds, debentures, notes or other indebtedness of the Company having a right to vote (or convertible into or exercisable for securities having the right to vote) on any matters on which the holders of capital stock of the Company may vote are issued and outstanding.

(b) Each of the outstanding shares of capital stock, voting securities or other equity interests of each Subsidiary of the Company is duly authorized, validly issued, fully paid, nonassessable and free of any preemptive rights, and all such securities are owned by the Company or another wholly-owned Subsidiary of the Company and are owned free and clear of all liens, charges, pledges, security interests, claims or other encumbrances (each, a “Lien”). There are no (i) preemptive rights, outstanding options, warrants,

conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or other rights of any kind which obligate the Company or any of its Subsidiaries to issue or deliver any shares of capital stock, voting securities or other equity interests of any Company Subsidiary or any securities or obligations convertible into or exchangeable into or exercisable for any shares of capital stock, voting securities or other equity interest of a Company Subsidiary, (ii) outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any securities or obligations convertible into or exchangeable into or exercisable for any shares of capital stock, voting securities or other equity interests of a Company Subsidiary; or (iii) other options, calls, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of any Subsidiary of the Company to which the Company or any of its Subsidiaries is a party. None of the Subsidiaries of the Company owns any Company Common Stock.

(c) Except as described in Section 3.2(c) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries directly or indirectly owns 5% or more of the outstanding equity or similar interests in, or any interest convertible into or exchangeable or exercisable for 5% or more of the equity or similar interests in, any corporation, partnership, limited liability company, joint venture or other business association or entity (other than the Company Subsidiaries).

SECTION 3.3 Authority; Noncontravention; Voting Requirements.

(a) The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and, subject to obtaining the Company Shareholder Approval, to consummate the Transactions. The execution, delivery and performance by the Company of this Agreement, and the consummation by it of the Transactions, have been duly authorized and approved by its Board of Directors, and except for obtaining the Company Shareholder Approval, no other corporate action on the part of the Company is necessary to authorize the execution, delivery and performance by the Company of this Agreement and the consummation by it of the Transactions. This Agreement has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the enforcement of creditors’ rights generally and (ii) is subject to general principles of equity, whether considered in a proceeding at Law or in equity (the “Bankruptcy and Equity Exception”).

(b) The Company’s Board of Directors, at a meeting duly called and held, has unanimously (i) approved and declared advisable and in the best interests of the Company this Agreement and the Merger, and (ii) directed that this Agreement be submitted to the shareholders of the Company for approval and resolved to recommend that shareholders of the Company approve this Agreement.

(c) Neither the execution and delivery of this Agreement by the Company nor the consummation by the Company of the Transactions, nor compliance by the Company with any of the terms or provisions hereof, will (i) conflict with or violate any provision of the Company Charter Documents or the comparable governing documents of the Company’s Subsidiaries or (ii) assuming that the authorizations, consents and approvals referred to in Section 3.4 and the Company Shareholder Approval are obtained and the filings referred to in Section 3.4 are made, (x) violate any Law, Order, license or permit of any Governmental Authority applicable to the Company or any of its Subsidiaries, (y) violate or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of any payment or other obligation pursuant to, cause any additional amounts to be payable under, or result in the creation of a Lien on any property or asset of the Company or any of its Subsidiaries pursuant to, any of the terms, conditions or provisions of any loan or credit agreement, debenture, note, bond, mortgage, indenture, deed of trust, lease, contract, permit, license, arrangement, instrument, obligation, restricted stock award, option agreement or other agreement (each, a “Contract”) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or any property or asset of any of them is bound or affected, except, in the case of clause (ii), for such violations or defaults that do not have, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(d) The affirmative vote (in person or by proxy) of the holders of at least two-thirds of the outstanding shares of Company Common Stock at the Company Shareholders Meeting, or any adjournment or postponement thereof, in favor of the adoption of this Agreement (the “Company Shareholder Approval”) is the only vote or approval of the holders of any class or series of capital stock of the Company or any of its Subsidiaries which is necessary to adopt this Agreement and approve the Transactions.

SECTION 3.4 Governmental Approvals. Except for (i) the filing with the SEC of a proxy statement relating to the Company Shareholders Meeting (as amended or supplemented from time to time, the “Proxy Statement”), and other filings required under, and compliance with other applicable requirements of, the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the, “Exchange Act”), and the rules of The Nasdaq Stock Market, (ii) the filing of the Articles of Merger with the Secretary of the Commonwealth of Massachusetts pursuant to the MBCA, and (iii) filings required under, and compliance with other applicable requirements of, the HSR Act, no consents or approvals of, or filings, declarations or registrations with, any Governmental Authority are necessary for the execution and delivery of this Agreement by the Company and the consummation by the Company of the Transactions, other than such other consents, approvals, filings, declarations or registrations that, if not obtained, made or given, would not have, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or prevent, materially delay or materially impair the consummation of the Transactions.

SECTION 3.5 Company SEC Documents; Undisclosed Liabilities.

(a) The Company and its Subsidiaries have filed all registration statements, forms, reports, schedules, statements, proxy statements and other similar

documents required to be filed with the SEC since January 1, 2005 (collectively, and in each case including all amendments, supplements, exhibits, financial statements and schedules thereto and documents incorporated by reference therein, the “Company SEC Documents”). As of their respective filing dates, the Company SEC Documents complied or, if not yet filed, will comply in all material respects with the requirements of the Exchange Act and the Securities Act, as the case may be, applicable to such Company SEC Documents, and none of the Company SEC Documents as of such respective dates (or, if amended or superseded prior to the date of this Agreement, the date of the filing of such amendment, with respect to the disclosures that are amended or superseded) contained, and none of the Company SEC Documents filed with the SEC subsequent to the date of this Agreement will contain as of the date of filing, any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b) All of the financial statements of the Company included in the Company SEC Documents, in each case, including any related notes thereto, have been (or, in the case of Company SEC Documents not filed as of the date hereof, will be) prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present (or, in the case of Company SEC Documents not filed as of the date hereof, will fairly present) the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited interim statements, as may be permitted by Form 10-Q of the SEC and subject, in the case of such unaudited statements, to normal, recurring adjustments.

(c) Neither the Company nor any of its Subsidiaries has any liabilities of any kind whatsoever, whether or not accrued and whether or not contingent or absolute, except liabilities (i) reflected or reserved against on the balance sheet of the Company and its Subsidiaries as of March 31, 2007 (the “Balance Sheet Date”) (including the notes thereto) included in the Company SEC Documents, (ii) incurred after the Balance Sheet Date in the ordinary course of business, (iii) incurred pursuant to this Agreement or (iv) that have not had, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or prevent, materially delay or materially impair the consummation of the Transactions.

(d) The Company is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of the Nasdaq Stock Market. Except as permitted by the Exchange Act, including Sections 13(k)(2) and (3) or rules of the SEC, since the enactment of the Sarbanes-Oxley Act, neither the Company nor any of its Affiliates has made, arranged or modified (in any material way) any extensions of credit in the form of a personal loan to any executive officer or director of the Company.

(e) The Company has established and maintains internal controls over financial reporting and disclosure controls and procedures (as such terms are defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act); such disclosure controls and procedures are effective to ensure that information relating to the Company, including its consolidated Subsidiaries, required to be disclosed by the Company in the reports that it files or submits

under the Exchange Act is accumulated and communicated to the Company’s principal executive officer and its principal financial officer to allow timely decisions regarding required disclosure; and such disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. The Company’s principal executive officer and its principal financial officer have disclosed, based on their most recent evaluation, to the Company’s auditors and the audit committee of the Board of Directors of the Company (x) all significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data and have identified for the Company’s auditors any material weaknesses in internal controls and (y) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls. The Company has made available to Parent (i) a summary of any such disclosure made by management to the Company’s auditors and audit committee since January 1, 2005 (the “Applicable Date”) and (ii) any material communication since the Applicable Date made by management or the Company’s auditors to the audit committee required or contemplated by listing standards of the Nasdaq Stock Market, the audit committee’s charter or professional standards of the Public Company Accounting Oversight Board. Since the Applicable Date, no material complaints from any source regarding accounting, internal accounting controls or auditing matters, and no material concerns from Company employees regarding questionable accounting or auditing matters, have been received by the Company. The Company has made available to Parent a summary of all material complaints or material concerns relating to other matters made since the Applicable Date through the Company’s whistleblower hot line or equivalent system for receipt of employee concerns regarding possible violations of Law. No attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Company’s chief legal officer, audit committee (or other committee designated for the purpose) of the Board of Directors or the Board of Directors pursuant to the rules adopted pursuant to Section 307 of the Sarbanes-Oxley Act or any Company policy contemplating such reporting, including in instances not required by those rules. The principal executive officer of the Company and the principal financial officer of the Company (and each former principal executive officer of the Company and each former principal financial officer of the Company, as applicable) have made the certifications required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the rules and regulations of the SEC promulgated thereunder with respect to the Company’s filings pursuant to the Exchange Act. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.

SECTION 3.6 Absence of Certain Changes. Since the Balance Sheet Date (a) the Company and its Subsidiaries have carried on and operated their respective businesses in all material respects in the ordinary course of business, (b) there has not been any event, change or occurrence that has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (c) there has not been (i) any declaration, setting aside or payment of any dividend or any other distribution with respect to any of the

capital stock of the Company or any of its Subsidiaries, (ii) any material change in accounting methods, principles or practices employed by the Company or (iii) any other action of the type described in Sections 5.2(a) or 5.2(b) which, had such action been taken after the date of this Agreement, would require approval of Parent.

SECTION 3.7 Legal Proceedings. There is no pending or, to the Knowledge of the Company, threatened, legal or administrative proceeding, claim, suit, litigation, action, investigation, audit, hearing, indictment, arbitration or other similar proceedings (“Litigation”) against the Company or any of its Subsidiaries, or any of their respective executive officers or directors that, if determined adversely to the Company or such officers or directors, would reasonably be expected to (a) involve fines, penalties, payments, costs or expenses in excess of $100,000 in the case of any single matter or $500,000 in the case of any group of related matters, (b) result in any such Person being excluded from participation in any federal health care program or state health care program, (c) materially impair the ability of the Company or any of its Subsidiaries to conduct their businesses, or use any of their material properties or assets, as presently conducted or used, (d) prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement, or (e) have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is subject to any injunction, or is subject to any order, directive, judgment, award, ruling, settlement, stipulation or decree imposed by or before any Governmental Authority (“Order”) that has resulted in, or would reasonably be expected to result in, any material detriment to the Company or any of its Subsidiaries.

SECTION 3.8 Compliance With Laws; Permits. The Company and its Subsidiaries are in compliance with all federal, state and local laws, statutes, ordinances, codes, rules, regulations, directives, decrees and Orders of Governmental Authorities (collectively, “Laws”) (excluding compliance with Laws regarding the payment of Taxes, which is governed by Section 3.10, compliance with Laws applicable to the Company Plans, which is governed by Section 3.11, compliance with Environmental Laws, which is governed by Section 3.12, and compliance with Health Care Laws, which is governed by Section 3.22), applicable to the Company or any of its Subsidiaries or by which any property, business or asset of the Company or any of its Subsidiaries is bound or affected, except for such non-compliance that is not, and would not reasonably be expected to be, individually or in the aggregate, materially detrimental to the Company and any of its Subsidiaries, taken as a whole, or prevent, materially delay or materially impair the consummation of the Transactions. No investigation by any Governmental Authority with respect to the Company or any of its Subsidiaries is pending or, to the Knowledge of the Company, threatened, nor, to the Knowledge of the Company, has any United States federal or state Governmental Authority indicated an intention to conduct the same. To the Knowledge of the Company, no material change is required in the Company’s or any of its Subsidiaries’ processes, properties or procedures in connection with any such Laws, and the Company has not received any overt notice or communication of any material noncompliance with any such Laws that has not been cured as of the date of this Agreement. The Company and its Subsidiaries each has obtained and is in compliance with all permits, licenses, certifications, approvals, registrations, consents, authorizations, franchises, variances, exemptions and orders issued or granted by a Governmental Authority (“Licenses”) necessary to conduct its business as presently conducted, except those the absence of which would not reasonably be expected to

be, individually or in the aggregate, materially detrimental to the Company and its Subsidiaries, taken as a whole, or prevent, materially delay or materially impair the consummation of the Transactions.

SECTION 3.9 Information Supplied. The Proxy Statement will not, on the date it is first mailed to shareholders of the Company and at the time of the Company Shareholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Proxy Statement will comply as to form in all material respects with the applicable requirements of the Exchange Act. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to information supplied by or on behalf of Parent or Merger Sub for inclusion or incorporation by reference in the Proxy Statement.

SECTION 3.10 Tax Matters.

(a) Each of the Company and its Subsidiaries has timely filed, or has caused to be timely filed on its behalf (taking into account any extension of time within which to file), all federal income and other material Tax Returns (as hereinafter defined) required to be filed by it under applicable Laws, all such filed Tax Returns are correct and complete in all material respects, and all Taxes shown to be due on such Tax Returns and all other material Taxes due have been paid, except for those Taxes being contested in good faith (as set forth on Section 3.10(a) of the Company Disclosure Schedule) and for which adequate reserves have been established in the Company’s financial statements. Neither the Company nor any of its Subsidiaries is the beneficiary of any extension of time with which to file any material Tax Return. No deficiency with respect to any amount of Taxes has been proposed, asserted or assessed against the Company or any of its Subsidiaries, which has not been fully paid or adequately reserved for in the Company SEC Documents. There are no Liens for Taxes (other than taxes not yet due and payable) upon any assets of the Company or its Subsidiaries. To the Knowledge of the Company, since December 31, 2003, the Company has not received written notice from an authority in a jurisdiction where the Company or any of its Subsidiaries does not file Tax Returns that the Company or any of its Subsidiaries is or may be subject to taxation by that jurisdiction.

(b) Each of the Company and its Subsidiaries has withheld and paid over to the relevant taxing authority all Taxes required to be withheld and paid in connection with any amounts paid or owing to employees, independent contractors, creditors, shareholders or any other third party except for such Taxes that, individually or in the aggregate, would not have, or be reasonably expected to have, a Material Adverse Effect.

(c) Neither the Company nor any of its Subsidiaries knows of any proposed or threatened Tax Claims by any Governmental Authority to assess any additional Taxes for any period for which Tax Returns have been filed that, if unpaid, would have, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As of the date hereof, no audits or administrative or judicial Tax Proceedings are pending or being conducted with respect to the Company or any of its Subsidiaries by any Governmental Authority and no notice of a deficiency or proposed adjustment for any

amount of Tax has been received. The Company Disclosure Schedule lists all federal, state, local and foreign income Tax Returns filed with respect to the Company or its Subsidiaries for taxable periods ended on or after December 31, 2002. Further, the Company has made available to Parent copies of all federal income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by the Company or any of its Subsidiaries filed or received since December 31, 2002.

(d) Neither the Company nor any of its Subsidiaries has waived any statute of limitations in respect of material Taxes or agreed to any extension of time with respect to a material Tax assessment or deficiency.

(e) Neither the Company nor any of its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period ending after the Closing as a result of any: (i) change in method of accounting for a period ending on or prior to Closing; (ii) intercompany transaction or excess loss account described in U.S. Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provisions of state, local or foreign income Tax law); (iii) installment sale or open transaction disposition made on or prior to Closing; or (iv) prepaid amount received on or prior to Closing.

(f) Neither the Company nor any of its Subsidiaries has distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code after December 31, 1999.

(g) Neither the Company nor any of its Subsidiaries is a party to any Contract that (i) has resulted or could result in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code (or any corresponding provision of state, local, or foreign Tax Law) or (ii) has resulted in any amount paid not having been fully deductible as a result of Section 162(m) of the Code (or any corresponding provision of state, local or foreign Tax law). Neither the Company nor any of its Subsidiaries has entered into, or otherwise participated (directly or indirectly) in, any “reportable transaction” within the meaning of U.S. Treasury Regulation Section 1.6011-4(b) or has received a written opinion from a tax advisor that was intended to provide protection against a tax penalty. Neither the Company nor any of its Subsidiaries has been a United States Real Property Holding Corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. As of the Closing, neither the Company nor any of its Subsidiaries will be a party to or bound by any Tax allocation or sharing agreement pursuant to which it will have any potential liability to any Person (other than the Company or any of its Subsidiaries) after the Closing Date.

(h) Neither the Company nor any of its Subsidiaries (i) has been a member of an Affiliated Group filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company) or (ii) has any liability for the Taxes of any Person (other than the Company or any of its Subsidiaries) under U.S. Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract or otherwise.

(i) As of the date hereof, no closing agreement pursuant to Section 7121 of the Code (or any other similar provision of state, local or foreign Tax Law), private letter ruling, technical advice memorandum, or similar agreement or ruling has been entered into, requested or received by or with respect to the Company or any of its Subsidiaries.

(j) For purposes of this Agreement: (i) “Tax” or “Taxes” shall mean (A) all federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Code), franchise, profits, registration, alternative or add-on minimum, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever or similar taxes imposed on the income properties or operations of the Company or any of its Subsidiaries, (B) all interest, penalties, fines, additions to tax or additional amounts imposed by any Governmental Authority in connection with any item described in clause (A), and (C) any transferee liability in respect of any items described in clauses (A) and/or (B) payable by reason of contract, assumption, transferee liability, operation of Law, U.S. Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof of any analogous or similar provision under Law) or otherwise, and (ii) “Tax Returns” shall mean any return, report, claim for refund, estimate, declaration, information return or statement or other similar document relating to or required to be filed with any Governmental Authority with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

SECTION 3.11 Employee Benefits and Labor Matters.

(a) Section 3.11(a) of the Company Disclosure Schedule lists: (i) all “employee benefit plans” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), (ii) all Company travel policies and plans and employee reimbursement policies thereunder, (iii) all employment, consulting, non-competition, employee non-solicitation, or other compensation agreements, and all collective bargaining agreements, and (iv) all bonus or other incentive compensation, equity or equity-based compensation (including stock option, phantom stock or stock ownership), stock purchase, deferred compensation, change in control, severance, termination, profit-sharing, leave of absence, vacation, medical, life insurance or other death benefit, educational assistance, Section 125 cafeteria, dependant care, fringe benefit, pension and welfare benefit plans, policies, agreements or arrangements, in each case as to which the Company or any of its Subsidiaries has any liability, contingent or otherwise, with respect to any current or former employee, independent contractor or director (collectively (i) through (iv), the “Company Plans”). Correct and complete copies of the following documents with respect to each of the Company Plans have been made available to Parent by the Company, to the extent applicable: (a) all plan documents and amendments thereto, (b) the two most recent annual reports on Form 5500 to the extent any such report was required by applicable Law, (c) the most recent summary plan description for each Company Plan for which such a summary plan description is required by applicable Law, (d) each currently effective trust agreement and insurance or group annuity contract and (e) the most recent favorable determination letter from the Internal Revenue Service for each Company Plan which is

intended to be qualified under Section 401(a) of the Code. Each Company Plan (excluding any Company Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA): (i) has been administered in accordance with its terms and (ii) is in compliance with the applicable provisions of ERISA, the Code and other Laws, except, in the case of (i) or (ii), for any instances of noncompliance that, individually or in the aggregate, would not have, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(b) Except as would not have, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:

(i) Each Company Plan has been administered in accordance with its terms, and the Company and each of its Subsidiaries and all of the Company Plans are in compliance with the applicable provisions of ERISA, the Code and other applicable Laws as to the Company Plans, and all contributions required under each Company Plan have been made in full on a timely and proper basis.

(ii) With respect to the Company Plans, individually and in the aggregate, no event has occurred and, to the Knowledge of the Company, there exists no condition or set of circumstances, including claims, audits and investigations, in connection with which the Company or any of its Subsidiaries could be subject to any tax, penalty or other liability under ERISA, the Code or any other applicable Law, except for making contributions, or the payment of claims in the ordinary course of the operation of any such Company Plans.

(iii) Each Company Plan that is intended to comply with the provisions of Section 401(a) of the Code is qualified and exempt from income taxes under Sections 401(a) and 501(a), respectively, of the Code, and to the Knowledge of the Company, nothing has occurred (or failed to occur) that would adversely affect such qualification.

(iv) No “employee welfare benefit plans” (as defined in Section 3(1) of ERISA) under which the Company or any of its Subsidiaries has any liability provides benefits to, or on behalf of, any former employee after the termination of employment except where the benefit is required by Section 4980B of the Code or similar state or local Law.

(v) Each individual who is classified by the Company or any of its Subsidiaries as an “employee” or as an “independent contractor” is properly so classified.

(vi) Each Company Option (A) was granted in compliance with all applicable Laws and all of the terms and conditions of the Company Stock Plan pursuant to which it was issued, (B) issued after January 1, 2005 has an exercise price per share of Company Common Stock equal to or greater than the fair market value of a share of Company Common Stock on the date of such grant, (C) has a grant date identical to the date on which the Company’s Board of Directors or Compensation Committee actually awarded such Company Option, (D) qualifies for the tax and accounting treatment afforded to such

Company Option in the Company’s tax returns and the Company Reports, respectively, and (E) complies with the requirements of Section 409A of the Code.

(vii) Each Company Plan which is a nonqualified deferred compensation plan has been operated in compliance with the applicable requirements of Section 409A of the Code.

(c) Neither the Company nor any Company Subsidiary maintains, contributes to (nor has within the past six years maintained or contributed to) or is obligated to maintain or contribute to, or has any actual or contingent liability under, any benefit plan that is subject to Title IV of ERISA or Section 412 of the Code or is otherwise a “defined benefit pension plan” (as defined in Section 3(35) of ERISA) or a “multiemployer employer” (as defined in Section 3(37) of ERISA).

(d) Neither the Company nor any of the Company Subsidiaries is or has been, since April 1, 2001, a party to, or bound by, or conducted negotiations regarding, any collective bargaining agreement or other contracts, arrangements, agreements or understandings with a labor union or similar organization that was certified by the National Labor Relations Board (“NLRB”) or voluntarily recognized or recognized under Law.

(e) Except as would not have, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect,

(i) There is no existing, pending or, to the Knowledge of the Company, threatened, (i) walkout, lockout, strike, slowdown, hand billing, picketing, work stoppage (sympathetic or otherwise), or work interruption (each, a “Concerted Action”) involving the employees of the Company or any of its Subsidiaries, (ii) unfair labor practice charge or complaint, labor dispute, labor arbitration proceeding or any other matter before the NLRB or any other comparable state agency against or involving the Company or any of its Subsidiaries, (iii) election petition or proceeding by a labor union or representative thereof to organize any employees of the Company or any of its Subsidiaries, (iv) certification or decertification question relating to collective bargaining units at the premises of the Company or any of its Subsidiaries or (v) grievance or arbitration demand against the Company or any of its Subsidiaries whether or not filed pursuant to a collective bargaining agreement.

(ii) None of the Company, any of its Subsidiaries or any of their respective representatives or employees has committed an unfair labor practice in connection with the operation of the respective businesses of the Company or any of its Subsidiaries.

(iii) The Company and its Subsidiaries are in compliance with all applicable Laws respecting labor, employment, fair employment practices, terms and conditions of employment, workers’ compensation, occupational safety, plant closings, mass layoffs and wages and hours.

(f) To the Knowledge of the Company, neither the employees of the Company nor the employees of any of its Subsidiaries have engaged in a material Concerted Action in the past three years.

(g) The Company and its Subsidiaries have properly accrued on their books and records all material unpaid but accrued wages, salaries and other paid time-off.

(h) None of the execution and delivery of this Agreement, nor shareholder approval of this Agreement, nor the consummation of any transaction contemplated by this Agreement (alone or in conjunction with a termination of employment) will (v) trigger any funding (through a grantor trust or otherwise) of any compensation or benefits under any Company Plan, (w) entitle any employees of the Company or any of its subsidiaries to severance pay or any increase in severance pay upon any termination of employment after the date hereof, (x) accelerate the time of payment or vesting or result in any payment of compensation or benefits under, increase the amount payable or result in any other material obligation pursuant to, any of the Company Plans, or (y) limit or restrict the right of the Company or, after the consummation of the transactions contemplated hereby, Parent to merge, amend or terminate any of the Company Plans.

SECTION 3.12 Environmental Matters. Except as would not have, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (a) no written notice, notification, demand, request for information, citation, summons, complaint or order from any Person has been received by the Company or any of its Subsidiaries, or, to the Knowledge of the Company, threatened, by any Person against the Company or any of its Subsidiaries, and no action, claim, suit, arbitration, or proceeding is pending or, to the Knowledge of the Company, threatened by any Person, that alleges that the Company or any of its Subsidiaries is not in compliance with or has any liability under any Environmental Law or otherwise addresses any matters involving Hazardous Materials or relating to or arising out of any Environmental Law; (b) neither the Company nor any of its Subsidiaries has any outstanding liabilities or obligations under any Order relating to any Environmental Law; (c) the Company and its Subsidiaries are and have been in compliance with all Environmental Laws, including possessing and complying with all Permits required for their operations under applicable Environmental Laws, and there are no proceedings pending or, to the Knowledge of the Company, threatened to cancel, revoke, modify, or not renew any such Permit; (d) there is no Environmental Claim pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries, or, to the Knowledge of the Company, against any Person whose liability for any Environmental Claim the Company or any of its Subsidiaries has retained or assumed either contractually or by operation of law; and (e) the Company and its Subsidiaries do not have any Environmental Liabilities and, to the Knowledge of the Company, no events (including Releases or Threatened Releases of Hazardous Materials), facts, circumstances or conditions relating to, arising from, associated with or attributable to any operations of the Company or any of its Subsidiaries (including any activities involving Hazardous Materials) or any real property currently or formerly owned, operated, used or leased by the Company or its Subsidiaries or operations thereon would reasonably be expected to result in Environmental Liabilities.

SECTION 3.13 Properties.

(a) Section 3.13(a) of the Company Disclosure Schedule contains a true and complete list of all real property owned by the Company or any of its Subsidiaries (collectively with all land, buildings, structures, fixtures and improvements located thereon

the “Owned Real Property”) and for each parcel of Owned Real Property, contains a correct street address of such Owned Real Property.

(b) Section 3.13(b) of the Company Disclosure Schedule contains a true and complete list of all real property leased, subleased, licensed or otherwise occupied (whether as a tenant, subtenant or pursuant to other occupancy arrangements) by the Company or any of its Subsidiaries (collectively, including the improvements thereon, the “Leased Real Property”), and for each Leased Real Property, identifies the street address of such Leased Real Property, and, in the case of any lease in respect thereof that is set to expire or is subject to renewal during the one-year period immediately following the date of this Agreement, the expiration date of such lease and a description of any terms that have been proposed in regard to any renewal thereof. True and complete copies of all agreements under which the Company or any Subsidiary is the landlord, sublandlord, tenant, subtenant, or occupant (each a “Real Property Lease”) that have not been terminated or expired as of the date thereof have been made available to Parent.

(c) The Company and/or its Subsidiaries have good and marketable fee simple title to all material Owned Real Property and valid leasehold estates in all material Leased Real Property free and clear of all Liens, except Permitted Liens.

(d) Other than the Real Property Leases, none of the material Owned Real Property or the material Leased Real Property is subject to any lease, sublease, license or other agreement granting to any other Person any right to the use, occupancy or enjoyment of such Owned Real Property or Leased Real Property or any part thereof. There are no outstanding options or rights of first refusal to purchase any Owned Real Property, or any portion of the Owned Real Property or interest therein.

(e) Each material Real Property Lease is in full force and effect and constitutes the valid and legally binding obligation of the Company or its Subsidiaries, enforceable in accordance with its terms (subject to the Bankruptcy and Equity Exception), and there is no material default or event which, with notice, lapse of time or both, would constitute a material default or permit termination or material modification or acceleration of obligations by any third party under any material Real Property Lease either by the Company or its Subsidiaries party thereto or, to the Knowledge of the Company, by any other party thereto or prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement.

(f) There does not exist any pending material condemnation or eminent domain proceedings that affect any material Owned Real Property or, to the Knowledge of the Company, any such proceedings that affect any material Leased Real Property or, to the Knowledge of the Company, any threatened material condemnation or eminent domain proceedings that affect any material Owned Real Property or material Leased Real Property, and neither the Company nor its Subsidiaries have received any written notice of the intention of any Governmental Authority or other Person to take or use any Owned Real Property or Leased Real Property.

SECTION 3.14 Intellectual Property.

(a) Section 3.14 of the Company Disclosure Schedule sets forth a true and complete list of all (i) registered Intellectual Property owned by the Company and its Subsidiaries and (ii) Material Intellectual Property (as hereinafter defined) of the Company and its Subsidiaries. Neither the Company nor any of its Subsidiaries have distributed to any third party the CIS customer relations software or the LIS customer relations software.

(b) Section 3.14 of the Company Disclosure Schedule sets forth a true and complete list of all Contracts under which the Company or its Subsidiaries have licensed any Material Intellectual Property from any third party or under which the Company or its Subsidiaries license any Material Intellectual Property to any third party and any other Contract that concerns the Company’s rights under or to Material Intellectual Property (“Material Intellectual Property Contracts”).

(c) Subject to Section 3.14(d) (including the Knowledge qualifiers contained therein), the Company and its Subsidiaries own, or possess adequate licenses or other valid rights to use (in each case, free and clear of any Liens, other than Permitted Liens) all Intellectual Property used in the business of the Company and/or its Subsidiaries as currently conducted.

(d) To the Knowledge of the Company, the conduct of the business and operations of the Company and its Subsidiaries and the use of Intellectual Property by the Company and its Subsidiaries do not infringe, misappropriate, dilute or otherwise violate (“Infringe”) the Intellectual Property rights of any Person.

(e) Neither the Company nor any Subsidiary, nor to the Knowledge of the Company, any other party, is or is alleged to be in breach or default under any Material Intellectual Property Contract, which default, either standing alone or with the passage of time, will give the counterparty thereto the right to terminate, restrict or modify, to the detriment of the Company or its Subsidiaries, the Company’s or the relevant Subsidiary’s rights thereunder or cause additional fees to be paid thereunder by the Company or its Subsidiaries, nor the Company’s Knowledge does a valid basis exist for any such claim. All of the Material Intellectual Property Contracts are, to the Knowledge of the Company, valid and enforceable.

(f) Neither the Company nor any Subsidiary has received notice of any claim, that seeks to cancel, limit or challenge the ownership, or any right to use of the Company or any of its Subsidiaries, or the validity or enforceability, of any registered Intellectual Property or Material Intellectual Property owned by or Material Intellectual Property licensed to the Company or its Subsidiaries, and no Litigation or Order is pending or outstanding or, to the Knowledge of the Company, threatened, in which such cancellation, limitation or challenge is sought or brought.

(g) To the Knowledge of the Company, no Person is or may be Infringing any Intellectual Property owned by or exclusively licensed to the Company or its

Subsidiaries, which infringement is, or is reasonably likely to be, material to the Company and its Subsidiaries, taken as a whole.

(h) Neither the Company nor any of its Subsidiaries has received any notice, written or otherwise, of any assertion or claim with respect to any registered Intellectual Property or Material Intellectual Property owned by or Material Intellectual Property licensed to the Company or its Subsidiaries.

(i) To the Knowledge of the Company, no Material Intellectual Property owned by or exclusively licensed to the Company or its Subsidiaries is being used or enforced in a manner that would result in the abandonment, cancellation or unenforceability of such Intellectual Property. To the Knowledge of the Company, no registered Intellectual Property or Material Intellectual Property owned by or Material Intellectual Property licensed to the Company or any of its Subsidiaries is invalid or unenforceable.

(j) The Company and its Subsidiaries take reasonable measures to (i) protect, maintain and preserve the Material Intellectual Property owned by the Company and/or its Subsidiaries and (ii) protect the confidentiality of the Trade Secrets included in Material Intellectual Property owned, used or held by the Company and/or its Subsidiaries.

(k) The Company and its Subsidiaries (i) take reasonable actions to protect the confidentiality, integrity and security of its software, databases, systems, networks and Internet sites and all information stored or contained therein or transmitted thereby from any unauthorized use, access, interruption or modification by third parties; and (ii) use reliable encryption (or equivalent) protection to protect the security and integrity of transactions executed through its software. The information technology systems used by the Company and its Subsidiaries have not failed or malfunctioned in the past two years in a manner that had a material impact on the business of the Company and its Subsidiaries, taken as a whole. The Company and its Subsidiaries have implemented reasonable back up, security and disaster recovery technology consistent with industry practices.

(l) For purposes of this Agreement, “Intellectual Property” means (i) all trademarks, trademark rights, trade names, trade name rights, trade dress and other indications of origin, corporate names, brand names, logos, slogans, certification rights, service marks, service mark rights, service names, service name rights, business and product names, applications for trademarks and for service marks, domain names, and other proprietary rights and information, the goodwill associated with the foregoing and registration in any jurisdiction of, and applications in any jurisdictions to register, the foregoing, including any extension, modification or renewal of any such registration or application; (ii) all inventions, discoveries, developments, ideas, formulae, processes, industrial models, designs, methodologies, technical information, manufacturing, engineering and technical drawings, know-how (whether patentable or unpatentable and whether or not reduced to practice), in any jurisdiction, all improvements thereto, and all patents, patent rights, applications for patents (including divisions, re-examinations, continuations, continuations in part and renewal applications), and any renewals, extensions or reissues thereof or similar legal protections related thereto, in any jurisdiction; (iii) nonpublic information (including without limitation customer and supplier lists), trade secrets and

confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any Person (“Trade Secrets”); (iv) copyrights and copyright rights, writings and other works in any media, whether copyrightable or not, in any jurisdiction, and all registrations or applications for registration of copyrights in any jurisdiction, and any renewals, restorations or extensions thereof; (v) all computer software and computer programs (including data, databases and related documentation and source code); (vi) any other intellectual property or proprietary rights; (vii) all copies and tangible documentation related to any of the foregoing and (viii) any claims or causes of action arising out of or relating to any infringement, dilution, misappropriation or other violation of any of the foregoing including the right to receive all proceeds and damages therefrom. “Material Intellectual Property” means any Intellectual Property the unavailability of which would be materially detrimental to the Company and its Subsidiaries, taken as a whole.

SECTION 3.15 Material Contracts.

(a) As of the date hereof, neither the Company nor any of its Subsidiaries is a party to or bound by:

(i) any Contract under which the Company or any of its Subsidiaries has (A) incurred any indebtedness for borrowed money that is currently owing or (B) given any guarantee in respect of indebtedness for borrowed money, in each case under clauses (A) and (B), having an aggregate principal amount in excess of $100,000;

(ii) any Contract that purports to limit, curtail or restrict the ability of the Company or any of its Subsidiaries (or any Affiliate thereof, including Parent and its Subsidiaries following the Effective Time) to compete or provide services in any material respect in any market segment and/or geographic area or line of business, or to hire or solicit the hire for employment of any individual or group;

(iii) any Contract (other than a Contract described in one of the other provisions of this Section without regard to any threshold contained therein) that involves annual expenditures by the Company or any of its Subsidiaries in excess of $1,000,000 and is not otherwise cancelable by the Company or any of its Subsidiaries without any financial or other penalty on 90-days’ or less notice;

(iv) any Contract (other than a Contract described in one of the other provisions of this Section without regard to any threshold contained therein) that involves annual revenue to the Company or any of its Subsidiaries in excess of $1,000,000;

(v) any purchase, sale or supply Contract that contains volume requirements or commitments, exclusive or preferred purchasing arrangements or promotional requirements;

(vi) any Contract described by Sections 3.15(a)(i)-3.15(a)(v) or Sections 3.15(a)(vii)-3.15(a)(xiv) that contains any “change of control” or similar provisions that would restrict or impair the ability of the Company or any of its Subsidiaries (or any Affiliate thereof, including Parent and its Subsidiaries following the Effective Time) to engage in any actions or transactions, including any provisions granting any third party a

right to early termination or requiring consent of a third party, receipt of payment or accelerated vesting under such Contract;

(vii) any purchase, sale, supply or other Contract that contains any “most favored nation” or equivalent preferential pricing terms for the benefit of any Person other than the Company or its Subsidiaries;

(viii) Contracts that would be required to be filed as an exhibit to a Form 10-K filed by the Company with the SEC on the date hereof;

(ix) any letter of intent, letter of understanding, memorandum of understanding, proposal, request for proposal, bid or other similar document with regard to any acquisition (including by merger) of capital stock or assets (except for ordinary course purchases of inventory or similar goods) of any other Person;

(x) any Contract containing any standstill or similar agreement pursuant to which the Company or any of its Subsidiaries (or any Affiliate thereof, including Parent and its Subsidiaries following the Effective Time) has agreed not to acquire assets or securities of another Person, or propose or offer to do so;

(xi) any Contract that (I) would require the licensing or disposition of any material assets, property or line of business of the Company or its Subsidiaries or, after the Effective Time, Parent or its Subsidiaries (or any Affiliate thereof), or (II) prohibits or limits the right of the Company or any of its Subsidiaries (or any Affiliate thereof, including Parent and its Subsidiaries following the Effective Time) to use, transfer, license, distribute or enforce any of their respective Material Intellectual Property rights;

(xii) any Contract between the Company or any of its Subsidiaries and any director or officer of the Company or any Person beneficially owning five percent or more of the outstanding Company Common Stock, other than Contracts with respect to Company Restricted Stock or Options;

(xiii) any Contract providing for indemnification by the Company or any of its Subsidiaries of any Person, except for any such Contract that is (x) not material to the Company or any of its Subsidiaries, (y) entered into in the ordinary course of business or (z) otherwise set forth in the Company Disclosure Schedule; and

(xiv) any Contract that contains a put, call or similar right pursuant to which the Company or any of its Subsidiaries could be required to purchase or sell, as applicable, any equity interests of any Person or assets that have a fair market value or purchase price of more than $1,000,000.

The Contracts contemplated by this Section 3.15(a) are referred to collectively as the “Material Contracts”).

(b) The Company has heretofore made available to Parent true, correct and complete copies of the Material Contracts. Each of the Material Contracts constitutes the valid and legally binding obligation of the Company or its Subsidiaries, enforceable in

accordance with its terms (subject to the Bankruptcy and Equity Exception), and is in full force and effect, except as would not have, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(c) To the Knowledge of the Company, there are no existing material defaults or breaches by the Company under any Material Contract (or events or conditions which, with notice or lapse of time or both, would constitute a material default or breach), and to the Knowledge of the Company, there are no such material defaults (or events or conditions which, with notice or lapse of time or both, would constitute a material default or breach) by any other party to any Material Contract. The Company has no Knowledge of any pending or threatened bankruptcy or similar proceeding with respect to any party to any Material Contract which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(d) Other than the Contracts set forth in Section 3.15 of the Company Disclosure Schedule, the Company is not a party to or bound by any Contract described in Section 3.15(a)(ii), (x) or (xi) that would be binding on Parent or its Subsidiaries (other than the Company and its Subsidiaries) following the Effective Time.

SECTION 3.16 Opinion of Financial Advisor. The Board of Directors of the Company has received the opinion of Deutsche Bank Securities Inc. (“Deutsche Bank”), dated the date of this Agreement, to the effect that, as of such date, and subject to the various assumptions and qualifications set forth therein, the Merger Consideration to be received by holders of the Company Common Stock is fair, from a financial point of view, to such holders, a signed copy of which opinion will be delivered to Parent for informational purposes promptly after receipt thereof by the Company.

SECTION 3.17 Brokers and Other Advisors. Except for Deutsche Bank, the fees and expenses of which will be paid by the Company, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission, or the reimbursement of expenses, in connection with the Transactions based upon arrangements made by or on behalf of the Company or any of its Subsidiaries. The Company has made available to Parent a complete and correct copy of any agreements between the Company and Deutsche Bank pursuant to which such firm would be entitled to any payment relating to this Agreement, the Merger or the other Transactions.

SECTION 3.18 State Takeover Laws. The provisions of Sections 110C, 110D and 110F of the Massachusetts Corporation-Related Laws are inapplicable to this Agreement, the Merger and the Transactions. No other “fair price”, “moratorium”, “control share acquisition”, other state takeover statutes (such statutes, collectively with Sections 110C, 110D and 110F of the Massachusetts Corporation-Related Law, “Takeover Statutes”) or any anti-takeover provision in the Company Charter Documents are applicable to the Merger, this Agreement or the Transactions.

SECTION 3.19 Shareholders’ Rights Agreement. Neither the Company nor any of its Subsidiaries currently has in effect, or intends to adopt, a shareholders’ rights agreement or any similar plan or agreement that limits or impairs the ability of any person to

purchase or become the direct or indirect beneficial owner of, shares of Company Common Stock or any other equity or debt securities of the Company or any of its Subsidiaries.

SECTION 3.20 Transactions with Affiliates. Except for a person’s ownership of Company Common Stock or for customary compensation and benefits received in the ordinary course of business as an employee or director of the Company or any of its Subsidiaries, to the extent disclosed in the Company SEC Documents filed prior to the date of this Agreement, no director, officer or other Affiliate of the Company or any of its Subsidiaries, or any entity in which, to the Knowledge of the Company, any such director, officer or other Affiliate owns, individually or in the aggregate, any beneficial interest (other than a publicly held corporation whose stock is traded on a national securities exchange or in the over-the-counter market and less than 5% of the stock of which is beneficially owned by any such Person): (i) receives any material benefit from any contract, arrangement or understanding with or relating to the business or operations of the Company or any of its Subsidiaries; (ii) is a party to or receives any material benefit from any loan, arrangement, understanding, agreement or contract for or relating to indebtedness of the Company or any of its Subsidiaries; or (iii) has any material interest in any property (real, personal or mixed), tangible or intangible, used, or currently intended to be used, in the business or operations of the Company or any of its Subsidiaries.

SECTION 3.21 Change of Control Agreements. Except as contemplated by Section 5.11 of this Agreement and except for the Merger Consideration, neither the execution and delivery of this Agreement nor the consummation of the Merger will (either alone or in conjunction with any other event) (i) result in any payment or benefit to any employee of the Company or any of its Subsidiaries or (ii) result in any payment or benefit to any director or officer of the Company or any of its Subsidiaries.

SECTION 3.22 Regulatory Compliance.

(a) Except as would not be reasonably likely to be materially detrimental to the Company and its Subsidiaries taken as a whole, the Company and each of its Subsidiaries have all licenses, franchises, permits, certificates, approvals and billing and other authorizations (collectively, “Permits”) necessary for the conduct of their respective businesses and the use of their properties and assets as presently conducted and used, and the Company’s and its Subsidiaries’ respective employees and agents have all Permits necessary for the conduct of their professional activities. Except as would not be reasonably likely to be materially detrimental to the Company and its Subsidiaries taken as a whole, the Company and each of its Subsidiaries have had at all times during the previous three years all Permits necessary for the conduct of their respective businesses and the use of their properties and assets as conducted and used at such respective times. Except as would not be reasonably likely to be materially detrimental to the Company and its Subsidiaries taken as a whole, to the Knowledge of the Company, the Company’s and its Subsidiaries’ respective employees have had at all times during the previous three years all Permits necessary for the conduct of their professional activities at such respective times. Except as would not be reasonably likely to be materially detrimental to the Company and its Subsidiaries taken as a whole, neither the Company nor any of its Subsidiaries has received written notice from any Governmental Authority, nor does the Company have Knowledge, that any such Permit is

subject to revocation, suspension, or any other disciplinary or adverse administrative action by any Governmental Authority. Except as would not be reasonably likely to be materially detrimental to the Company and its Subsidiaries taken as a whole, no Permit applicable to the Company or any of its Subsidiaries is subject to a consent order or any other final adverse disciplinary or administrative action, any of which is still in force and effect.

(b) Except as would not be reasonably likely to be materially detrimental to the Company and its Subsidiaries taken as a whole, the Company and each of its Subsidiaries are in compliance with all Health Care Laws and the terms of all Permits to the extent applicable to the Company or any of its Subsidiaries, or any of its or their respective businesses or operations. Except as would not be reasonably likely to be materially detrimental to the Company and its Subsidiaries taken as a whole, no aspect of the Company’s or any of its Subsidiaries’ respective businesses or operations is reasonably likely to cease to comply with any Health Care Law or the terms of any Permit.

(c) Neither the Company nor any of its Subsidiaries, nor to the Knowledge of the Company, any director, officer or employee of the Company or any of its Subsidiaries, is currently, or has been at any time since February 6, 2005: (i) excluded from participation in any federal health care program or state health care program, (ii) convicted of any criminal offense in respect of any Health Care Law, other than those individuals identified in Section 3.22(c)(iii) below, (iii) convicted of any criminal offense that falls within the ambit of 42 U.S.C. § 1320a-7(a) but has not yet been excluded, debarred, suspended or otherwise declared ineligible, (iv) debarred or disqualified from participation in regulated activities for any violation or alleged violation of any Health Care Law, but who is not excluded or otherwise listed in the listing described in Section 3.22(c)(v) below, (v) listed on the General Services Administration List of Parties Excluded from Federal Programs, or (vi) a party to or subject to, or, to the Knowledge of the Company, threatened to be made a party to or subject to, any action or proceeding concerning any of the matters described in clauses (i), (ii), (iii), (iv) or (v).

(d) The Company and each of its Subsidiaries have developed a plan and time line (the “Compliance Plan”) for coming into compliance with all Health Care Laws that have been passed or adopted prior to the date of this Agreement but which are not yet applicable, or contain provisions that are not yet applicable, to the Company but which are reasonably likely to be become applicable to the Company or its Subsidiaries within twelve months of the date hereof and have implemented, or are currently implementing, the provisions of the Compliance Plan to ensure that the Company and each of its Subsidiaries will be in compliance with such Laws at such time as they become applicable to the Company, except for failures to comply with any of the foregoing that are not, and would not reasonably be expected to be, individually or in the aggregate, materially detrimental to the Company and its Subsidiaries taken as a whole.

(e) Except as would not be reasonably likely to be materially detrimental to the Company and its Subsidiaries taken as a whole, the Company and each of its Subsidiaries are in compliance with all applicable Laws, including all Health Care Laws, governing marketing or promotional activities, including, without limitation, requirements administered by the Federal Trade Commission, the Federal Communications Commission, the Centers for

Medicare and Medicaid, and other federal and state regulatory agencies such as “do not call” and “do not fax” registries.

(f) Except as would not be reasonably likely to be materially detrimental to the Company and its Subsidiaries taken as a whole, and except in compliance with applicable Laws, including all Health Care Laws, neither the Company nor any of its Subsidiaries: (i) makes available to any Person for free or a nominal charge any ancillary supplies, goods, services, coupons, vouchers or discount cards or programs, (ii) has any financial relationships as defined in 42 U.S.C. § 1395nn(a) with physicians, or (iii) receives any payments from manufacturers other than customary rebates, and purchase discounts, and other non-monetary benefits.

(g) Since November 8, 2004, to the Knowledge of the Company, neither the Company nor any of its Subsidiaries has engaged in any conduct that would be reasonably likely to result in or constitute a Material Breach of the Corporate Integrity Agreement (as defined therein) among the Company, certain of its Subsidiaries and the Office of the Inspector General of the Department of Health and Human Services (“OIG”) dated November 8, 2004 (“CIA”), including, without limitation, the training and education obligations, disclosure program, screening requirements, notification requirements and reporting obligations set forth therein, except as disclosed to the OIG, provided that the foregoing representation and warranty is not made with respect to any business, operation or Subsidiary at a time when such business, operation or Subsidiary was not owned, directly or indirectly, by the Company. No Stipulated Penalty has been assessed, and no Material Breach has occurred under the CIA. The Company has provided Parent with, and