{"id":43024,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-and-plan-of-merger-and-reorganization-sonicwall-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-and-reorganization-sonicwall-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-and-reorganization-sonicwall-inc.html","title":{"rendered":"Agreement and Plan of Merger and Reorganization &#8211; SonicWALL Inc. and Ignyte Technology Inc."},"content":{"rendered":"<pre>--------------------------------------------------------------------------------\n\n                AGREEMENT AND PLAN OF MERGER AND REORGANIZATION\n                                        \n                                     among\n\n                                SONICWALL, INC.,\n\n                             ITI ACQUISITION CORP.,\n                                        \n                            IGNYTE TECHNOLOGY, INC.\n\n                                      and\n\n                                 JEFF STARK, as\n\n                          SHAREHOLDERS' REPRESENTATIVE\n                                        \n                           Dated as of March 1, 2001\n                                        \n\n--------------------------------------------------------------------------------\n\n \n                               TABLE OF CONTENTS\n                               -----------------\n\n\n \n                                                                                                Page\n                                                                                                ----\n                                                                                              \nARTICLE I  THE MERGER..........................................................................   2\n     SECTION 1.01  The Merger..................................................................   2\n     SECTION 1.02  Effective Time; Closing.....................................................   2\n     SECTION 1.03  Effect of the Merger........................................................   2\n     SECTION 1.04  Articles of Incorporation; Bylaws...........................................   3\n     SECTION 1.05  Directors and Officers......................................................   3\n\nARTICLE II  MERGER CONSIDERATION; EXCHANGE OF CERTIFICATES.....................................   3\n     SECTION 2.01  Merger Consideration........................................................   3\n     SECTION 2.02  Exchange of Certificates....................................................   5\n     SECTION 2.03  Stock Transfer Books........................................................   9\n     SECTION 2.04  Company Stock Options; [Waiver of Acceleration Rights]......................   9\n     SECTION 2.05  Dissenting Shares...........................................................   9\n\nARTICLE III  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................................  10\n     SECTION 3.01  Organization and Qualification..............................................  10\n     SECTION 3.02  Articles of Incorporation and Bylaws........................................  11\n     SECTION 3.03  No Subsidiaries.............................................................  11\n     SECTION 3.04  Capitalization..............................................................  11\n     SECTION 3.05  Authority Relative to This Agreement........................................  13\n     SECTION 3.06  No Conflict; Required Filings and Consents..................................  13\n     SECTION 3.07  Permits; Compliance.........................................................  14\n     SECTION 3.08  Financial Statements........................................................  15\n     SECTION 3.09  Absence of Certain Changes or Events........................................  15\n     SECTION 3.10  Absence of Litigation.......................................................  15\n     SECTION 3.11  Employee Benefit Plans; Labor Matters.......................................  16\n     SECTION 3.12  Contracts...................................................................  19\n     SECTION 3.13  Environmental Matters.......................................................  21\n     SECTION 3.14  Intellectual Property.......................................................  21\n     SECTION 3.15  Returns and Complaints......................................................  23\n     SECTION 3.16  Taxes.......................................................................  23\n     SECTION 3.17  Vote Required...............................................................  25\n     SECTION 3.18  Assets......................................................................  25\n     SECTION 3.19  Owned Real Property.........................................................  25\n     SECTION 3.20  Certain Interests...........................................................  25\n     SECTION 3.21  Insurance Policies..........................................................  26\n     SECTION 3.22  Brokers.....................................................................  26\n     SECTION 3.23  Customers and Suppliers.....................................................  26\n     SECTION 3.24  Accounts Receivable; Bank Accounts..........................................  26\n     SECTION 3.25  Powers of Attorney..........................................................  27\n     SECTION 3.26  Offers......................................................................  27\n     SECTION 3.27  Warranties..................................................................  27\n \n\n                                       i\n\n \n\n                                                                                             \n     SECTION 3.28  Books and Records...........................................................  27\n     SECTION 3.29  Tax Matters.................................................................  27\n     SECTION 3.30  No Misstatements............................................................  27\n\nARTICLE IV  REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB............................  28\n     SECTION 4.01  Organization and Qualification..............................................  28\n     SECTION 4.02  Authority Relative to This Agreement........................................  28\n     SECTION 4.03  Board Approval..............................................................  29\n     SECTION 4.04  No Conflict; Required Filings and Consents..................................  29\n     SECTION 4.05  SEC Filings; Financial Statements...........................................  29\n     SECTION 4.06  Interim Operations of Merger Sub............................................  30\n     SECTION 4.07  Valid Issuance of Parent Common Stock.......................................  30\n     SECTION 4.08  Brokers.....................................................................  30\n     SECTION 4.09  Absence of Changes..........................................................  31\n     SECTION 4.10  No Parent Shareholder Vote..................................................  31\n     SECTION 4.11  Tax Matters.................................................................  31\n\nARTICLE V  CONDUCT OF BUSINESSES PENDING THE MERGER............................................  31\n     SECTION 5.01  Conduct of Business by the Company and the Subsidiaries Pending the Merger..  31\n     SECTION 5.02  Notification of Certain Matters.............................................  34\n\nARTICLE VI  ADDITIONAL AGREEMENTS..............................................................  34\n     SECTION 6.01  Company Stockholder Approval................................................  34\n     SECTION 6.02  Information Statement.......................................................  35\n     SECTION 6.03  Access to Information; Confidentiality......................................  36\n     SECTION 6.04  No Solicitation of Transactions.............................................  36\n     SECTION 6.05  Employee Benefits Matters...................................................  37\n     SECTION 6.06  Further Action; Consents; Filings...........................................  38\n     SECTION 6.07  Plan of Reorganization......................................................  40\n     SECTION 6.08  No Public Announcement......................................................  40\n     SECTION 6.09  Expenses....................................................................  40\n     SECTION 6.10  Affiliate Agreements........................................................  40\n     SECTION 6.11  Indemnification of Officers and Directors...................................  40\n     SECTION 6.12  Stockholder Certificates....................................................  42\n     SECTION 6.13  Nasdaq National Market Listing..............................................  42\n     SECTION 6.14  Registration on Form S-3....................................................  42\n     SECTION 6.15  Personal Guarantees.........................................................  42\n\nARTICLE VII  CONDITIONS TO THE MERGER..........................................................  42\n     SECTION 7.01  Conditions to the Obligations of Each Party.................................  42\n     SECTION 7.02  Conditions to the Obligations of Parent and Merger Sub......................  43\n     SECTION 7.03  Conditions to the Obligations of the Company................................  45\n\nARTICLE VIII  TERMINATION, AMENDMENT AND WAIVER................................................  45\n     SECTION 8.01  Termination.................................................................  45\n\n \n\n                                      ii\n\n \n\n                                                                                             \n     SECTION 8.02  Effect of Termination.......................................................  46\n     SECTION 8.03  Amendment...................................................................  47\n     SECTION 8.04  Waiver......................................................................  47\n\nARTICLE IX  INDEMNIFICATION....................................................................  47\n     SECTION 9.01  Survival of Representations and Warranties..................................  47\n     SECTION 9.02  Indemnification by the Stockholders.........................................  47\n     SECTION 9.03  Indemnification Procedures..................................................  48\n     SECTION 9.04  Stockholders' Representative................................................  49\n\nARTICLE X  GENERAL PROVISIONS..................................................................  50\n     SECTION 10.01  Notices....................................................................  51\n     SECTION 10.02  Certain Definitions........................................................  51\n     SECTION 10.03  Severability...............................................................  57\n     SECTION 10.04  Assignment; Binding Effect; Benefit........................................  57\n     SECTION 10.05  Incorporation of Exhibits..................................................  57\n     SECTION 10.06  Specific Performance.......................................................  57\n     SECTION 10.07  Governing Law; Forum.......................................................  57\n     SECTION 10.08  Time of the Essence........................................................  57\n     SECTION 10.09  Waiver of Jury Trial.......................................................  57\n     SECTION 10.10  Construction...............................................................  58\n     SECTION 10.11  Further Assurances.........................................................  58\n     SECTION 10.12  Headings...................................................................  58\n     SECTION 10.13  Counterparts...............................................................  58\n     SECTION 10.14  Entire Agreement...........................................................  58\n \n\n \n                \nExhibit A         Form of Voting Agreement\nExhibit B         Form of Escrow Agreement\nExhibit C         Form of Company Affiliate Letter\nExhibit D         Form of Company Counsel Legal Opinion\nExhibit E         Form of Parent Special Counsel Legal Opinion\nExhibit F         Form of Shareholder Certificate\nExhibit G         Form of Employment, Non-Competition and Non-Solicitation Agreement\nExhibit H         Form of Company Employee Offer Letter\nExhibit I         Form of Option Assumption Agreement\n\nSchedule 1.01     Schedule of Principal Shareholders\nSchedule 6.05(b)  Schedule of Company Employees Entering Into Employment Agreements\nSchedule 6.05(c)  Schedule of Option Holders Entering Into Option Agreements\nSchedule 6.14     Registration Rights Schedule\nSchedule 7.02(p)  Schedule of Company Agreements to be Terminated Prior to Closing\n\n \n                                      iii\n\n \n                AGREEMENT AND PLAN OF MERGER AND REORGANIZATION\n\n          AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of March 1,\n                ---------                                                   \n 2001 (this \"Agreement\"), among SONICWALL, INC., a California corporation\n             ---------     \n(\"Parent\"), ITI ACQUISITION CORP., a California corporation and a wholly owned\n  ------                                         \nsubsidiary of Parent (\"Merger Sub\"), IGNYTE TECHNOLOGY, INC., a California \n                       ----------     \ncorporation (the \"Company\"), and JEFF STARK, as Shareholders' Representative\n(as defined in Section 9.04 hereof).\n\n                              W I T N E S S E T H:\n\n          WHEREAS, upon the terms and subject to the conditions of this\nAgreement and in accordance with the California General Corporation Law (the\n\"CGCL\"), Parent and the Company will enter into a business combination\n-----                                                                 \ntransaction pursuant to which Merger Sub will merge with and into the Company\n(the \"Merger\");\n      ------   \n\n          WHEREAS, the Board of Directors of the Company has (i) determined that\nthe Merger is consistent with and in furtherance of the long-term business\nstrategy of the Company and fair to, and in the best interests of, the Company\nand its shareholders, (ii) approved this Agreement, the Merger, and the other\ntransactions contemplated by this Agreement, and (iii) determined to recommend\nthat the shareholders of the Company adopt and approve the principal terms of\nthis Agreement and approve the Merger;\n\n          WHEREAS, the Boards of Directors of each of Parent and Merger Sub have\n(i) determined that the Merger is consistent with and in furtherance of the\nlong-term business strategy of Parent and fair to, and in the best interests of,\nParent and its shareholders and (ii) approved this Agreement, the Merger, and\nthe other transactions contemplated by this Agreement;\n\n          WHEREAS, for federal income tax purposes, the Merger is intended to\nqualify as a reorganization under the provisions of Section 368(a) of the United\nStates Internal Revenue Code of 1986, as amended (the \"Code\");\n                                                       ----   \n\n          WHEREAS, pursuant to the Merger, each outstanding share of the common\nstock of the Company (the \"Company Common Stock\"), each share of Series A\n                           --------------------                          \nPreferred Stock of the Company (the \"Company Preferred Stock\") and all\noutstanding options or other rights to acquire or receive shares of Company\nCommon Stock shall be converted into the right to receive shares of Parent's\nauthorized common stock (\"Parent Common Stock\") and\/or cash, at the rate\n                          -------------------                           \ndetermined in this Agreement.  The Company Common Stock and the Company\nPreferred Stock are collectively referred to herein as the \"Company Stock\";\n                                                            -------------  \n\n          WHEREAS, as a condition and inducement to Parent's and Merger Sub's\nentering into this Agreement and incurring the obligations set forth herein,\nconcurrently with the execution and delivery of this Agreement, Parent is\nentering into a voting and proxy agreement with each of the shareholders of the\nCompany identified in Schedule 1.01 (the \"Principal Shareholders\"), dated the\n                                          ----------------------             \ndate hereof (a \"Voting Agreement\") and substantially in the form \n                ----------------                                                \n\n \nattached hereto as Exhibit A; and each of the shareholders of the Company are \n                   ---------\nexecuting and delivering to Parent a Shareholder Certificate in the form\nattached hereto as Exhibit F (a \"Shareholder Certificate\")\n                   ---------     -----------------------  \n\n          WHEREAS, a portion of the Parent Common Stock otherwise issuable by\nParent in connection with the Merger shall be placed in escrow by Parent, the\nrelease of which amount shall be contingent upon certain events and conditions,\nall as set forth in this Agreement and the Escrow Agreement (as defined in\nSection 2.02(b));\n\n          WHEREAS, concurrently with the execution of this Agreement, and as a\ncondition and inducement to Parent's willingness to enter into this Agreement,\ncertain employees of the Company are entering into Employment Agreements (as\ndefined in Section 6.05(b)); and\n\n          WHEREAS, certain capitalized terms used in this Agreement are defined\nin Section 10.02 of this Agreement.\n\n          NOW, THEREFORE, in consideration of the foregoing and the mutual\ncovenants and agreements herein contained, and intending to be legally bound\nhereby, Parent, Merger Sub and the Company hereby agree as follows:\n\n                                   ARTICLE I\n\n                                  THE MERGER\n                                  ----------\n\n     SECTION 1.01    The Merger.  Upon the terms and subject to the conditions \n                     ----------\nset forth in Article VII, and in accordance with the CGCL, at the Effective Time\n(as defined in Section 1.02), Merger Sub shall be merged with and into the\nCompany. As a result of the Merger, the separate corporate existence of Merger\nSub shall cease, and the Company shall continue as the surviving corporation of\nthe Merger (the \"Surviving Corporation\").\n\n     SECTION 1.02    Effective Time; Closing.  As promptly as practicable \n                     -----------------------\nfollowing the satisfaction or, if permissible, waiver of the conditions set\nforth in Article VII (or such other date as may be agreed by each of the parties\nhereto), the parties hereto shall cause the Merger to be consummated by filing\nan agreement of merger (the \"Agreement of Merger\") with the Secretary of State\nof the State of California. The term \"Effective Time\" means the date and time of\nsuch filing (or such later time as may be agreed by each of the parties hereto\nand specified in the Agreement of Merger). Immediately prior to the filing of\nthe Agreement of Merger, a closing (the \"Closing\") will be held at the offices\nof Gunderson Dettmer Stough Villeneuve Franklin &amp; Hachigian, LLP (\"Gunderson\nDettmer\"), 155 Constitution Drive, Menlo Park, California 94025 (or such other\nplace as the parties may agree). The date on which the Closing shall occur is\nreferred to herein as the \"Closing Date.\"\n\n     SECTION 1.03    Effect of the Merger.  At the Effective Time, the effect of\n                     -------------------- \nthe Merger shall be as provided in the applicable provisions of the CGCL.\nWithout limiting the generality of the foregoing, and subject thereto, at the\nEffective Time, all the property, rights, privileges, powers and franchises of\neach of the Company and Merger Sub shall vest in the Surviving Corporation, and\nall debts, liabilities, obligations, restrictions, disabilities and duties of\n\n                                       2\n\n \neach of the Company and Merger Sub shall become the debts, liabilities,\nobligations, restrictions, disabilities and duties of the Surviving Corporation.\n\n     SECTION 1.04    Articles of Incorporation; Bylaws.\n                     ---------------------------------\n          (a)  At the Effective Time, the Articles of Incorporation of Merger \nSub shall be the Articles of Incorporation of the Surviving Corporation until\nthereafter amended as provided by law and such Articles of Incorporation.\n\n          (b)  At the Effective Time, the Bylaws of Merger Sub, as in effect \nimmediately prior to the Effective Time shall be the Bylaws of the Surviving\nCorporation until thereafter amended as provided by law, the Articles of\nIncorporation of the Surviving Corporation and such Bylaws.\n\n     SECTION 1.05    Directors and Officers.  The directors of Merger Sub \n                     ---------------------- \nimmediately prior to the Effective Time shall be the initial directors of the\nSurviving Corporation, each to hold office in accordance with the Articles of\nIncorporation and Bylaws of the Surviving Corporation, and the officers of\nMerger Sub immediately prior to the Effective Time shall be the initial officers\nof the Surviving Corporation, in each case until their respective successors are\nduly elected or appointed and qualified.\n\n                                  ARTICLE II\n\n                MERGER CONSIDERATION; EXCHANGE OF CERTIFICATES\n                ----------------------------------------------\n\n     SECTION 2.01    Merger Consideration.\n                    --------------------- \n          (a)  At the Effective Time, by virtue of the Merger and without any \naction on the part of Parent, Merger Sub, the Company or the holders of any of\nthe following securities:\n\n                (i)  each share of Company Common Stock issued and outstanding \nimmediately prior to the Effective Time (other than any shares of Company Common\nStock to be canceled pursuant to Section 2.01(a)(iii) and any Dissenting Shares\n(as defined in Section 2.05)) shall be converted into the right to receive the\nCommon Exchange Ratio (as defined in Section 2.01(b)); provided, however, that \n                                                       --------  ------- \neach of the individuals listed on Schedule 6.05(b) hereto shall receive $200,000\ncash in lieu of each of their rights to receive 12,853.47 shares of Parent\nCommon Stock pursuant to the foregoing;\n\n               (ii)  each share of Company Preferred Stock issued and \noutstanding immediately prior to the Effective Time shall be converted into the\nright to receive the Preferred Exchange Ratio (as defined in Section 2.01(b));\n\n              (iii)  each share of Company Common Stock held in the treasury of \nthe Company and each share of Company Common Stock owned by Parent or any direct\nor indirect wholly owned subsidiary of Parent or of the Company immediately\nprior to the Effective Time shall be cancelled and extinguished without any\nconversion thereof and no payment or distribution shall be made with respect\nthereto; and\n\n\n                                       3\n\n \n               (iv)  each share of common stock, par value $0.001 per share, of \nMerger Sub issued and outstanding immediately prior to the Effective Time shall\nbe converted into and exchanged for one validly issued, fully paid and\nnonassessable share of common stock, par value $0.001 per share, of the\nSurviving Corporation.\n\n          (b)  As used in this Agreement, the following terms have the \nfollowing meanings:\n\n                (i)  \"Aggregate Common Merger Consideration\" means 650,000 \n                      -------------------------------------\nshares of Parent Common Stock (the \"Parent Shares\").\n                                    -------------   \n               (ii)  \"Aggregate Preferred Merger Consideration\" means (x) an \n                     ---------------------------------------- \namount of cash equal to the Preferred Cash Component (as defined below) and (y)\nthe Preferred Share Component (as defined below);\n\n              (iii)  \"Escrow Shares\" means 53,210 shares of Parent Common Stock.\n                      -------------                                             \n               (iv)  \"Common Exchange Ratio\" means the number of shares of \n                     ---------------------  \nParent Common Stock determined by dividing (x) the Aggregate Common Merger\nConsideration by (y) the Fully Diluted Common Shares Amount (as defined below).\n\n                (v)  \"Fully Diluted Common Shares Amount\" means a number of \n                      ----------------------------------     \nshares of Company Common Stock equal to the sum of (x) the number of shares of\nCompany Common Stock issued and outstanding immediately prior to the Effective\nTime and (y) the number of shares of Company Common Stock issuable upon\nexercise, conversion and\/or exchange of all securities issued and outstanding\nimmediately prior to the Effective Time that are exercisable, convertible and\/or\nexchangeable for shares of Company Stock, including, without limitation, the\nCompany Options (as defined in Section 2.04 below), whether or not exercisable\nand whether or not vested, but excluding Company Preferred Stock and excluding\nthe unvested portions of any Company Options held by former employees of the\nCompany.\n\n               (vi)  \"Preferred Exchange Ratio\" means (x) the number of shares \n                      ------------------------  \nof Parent Common Stock determined by dividing the Preferred Share Component by\n754,404, and (y) the amount of cash determined by dividing the Preferred Cash\nComponent by 754,404.\n\n              (vii)  \"Preferred Cash Component\" means the amount of cash \n                      ------------------------  \ndetermined by the following formula:\n\n\n                        \nPreferred Cash Component = (Closing Price x Vested Parent Shares) + $ 800,000 - ($800,000\/.19) + (Closing Price x $2,000,000\/$15.56)\n                             -------------------------------------------------------------------------------------------------------\n                                                                 (1\/.19) + (Closing Price\/$15.56) - 1\n\n\n             (viii)  \"Preferred Share Component\" means a number of shares of \n                      ------------------------- \nParent Common Stock equal to $2,000,000 minus the Preferred Cash Component,\ndivided by (B) $15.56.\n\n               (ix) \"Closing Price\" is the closing price of shares of Parent \n                     -------------  \nCommon Stock as reported by the Nasdaq National Market on the Closing Date.\n\n                                       4\n\n \n               (x)  \"Vested Parent Shares\" is the number of vested shares of \n                     --------------------  \nParent Common Stock issuable to the holders of Company Common Stock at the\nClosing, including the portion of such shares which are to be deposited into the\nEscrow Fund (as defined in Section 2.02(b)) pursuant to the terms of this\nAgreement.\n\n          (c)  If, during the period between the date hereof and the Effective \nTime, any change in the capital stock of Parent shall occur by reason of\nreclassification, recapitalization, stock split or combination, exchange or\nreadjustment of shares, or any stock dividend thereon with a record date during\nsuch period or any similar event, the Aggregate Common Merger Consideration, the\nCommon Exchange Ratio, the Aggregate Preferred Merger Consideration and the\nEscrow Shares shall be correspondingly adjusted to the extent appropriate to\nreflect such stock dividend, subdivision, reclassification, recapitalization,\nsplit, combination, exchange or readjustment of shares.\n\n          (d)  Except as modified by the Employment Agreements (as defined in \nSection 6.05(b)), if any shares of Company Common Stock outstanding immediately\nprior to the Effective Time are unvested or are subject to a repurchase option,\nrisk of forfeiture or other condition under any applicable restricted stock\npurchase agreement, stock option exercise agreement or other agreement with the\nCompany, then the Parent Shares issued in exchange for such shares of Company\nCommon Stock will also be unvested and\/or subject to the same repurchase option,\nrisk of forfeiture or other condition, and the certificates representing such\nParent Shares may accordingly be marked with appropriate legends.\n\n     SECTION 2.02    Exchange of Certificates.\n     ----------------------------------------\n          (a)  Exchange Procedures.  From and after the Effective Time, Boston \n               -------------------   \nEquiserve or another bank or trust company to be designated by Parent shall act\nas exchange agent (the \"Exchange Agent\") in effecting the exchange of the\n                        --------------\napplicable shares of Parent Common Stock and\/or cash for certificates which\nimmediately prior to the Effective Time represented outstanding shares of\nCompany Stock (\"Company Share Certificates\") and which were converted into\n                --------------------------                                \nthe right to receive the applicable shares of Parent Common Stock and\/or cash\npursuant to Section 2.01 therefor. As promptly as practicable after the\nEffective Time, Parent and the Exchange Agent shall mail to each record holder\nof Company Share Certificates a letter of transmittal (the \"Letter of \n                                                            ---------\nTransmittal\") in a form approved by Parent and the Company and instructions for \n-----------\nuse in surrendering such Company Share Certificates and receiving shares of\nParent Common Stock and\/or cash pursuant to Section 2.01. Promptly after the\nEffective Time, but in no event later than 20 business days following the\nEffective Time, Parent shall cause to be deposited in trust with the Exchange\nAgent the shares of Parent Common Stock issuable pursuant to Section 2.01 (and\ncash in lieu of fractional shares pursuant to Section 2.02(e)) less the Escrow\nShares, and cash in an aggregate amount not less than the aggregate amount to be\npaid to shareholders of the Company pursuant to Section 2.01.\n\n          Upon the surrender of each Company Share Certificate for cancellation\nto the Exchange Agent, together with a properly completed Letter of Transmittal,\na Shareholder Certificate and such other documents as may reasonably be required\nby Parent:\n\n                                       5\n\n \n               (i)  Parent shall cause to be issued to the holder of such \nCompany Share Certificate in exchange therefor (A) a separate stock certificate\nrepresenting the shares of Parent Common Stock to which such holder is entitled\npursuant to Section 2.01 (less any Escrow Shares attributable to the interest of\nsuch holder, if any, in the Escrow Fund pursuant to Section 2.02(b)) and (B)\ncash in lieu of fractional shares pursuant to Section 2.02(e), and (C) any cash\nto be paid to such holder pursuant to Section 2.01; and\n\n              (ii) the Company Share Certificates so surrendered shall \nforthwith be cancelled.\n\n          In the event of a transfer of ownership of shares of Company Stock\nthat is not registered in the transfer records of the Company, the applicable\nshares of Parent Common Stock and\/or cash may be issued to a person other than\nthe person in whose name the Company Share Certificate so surrendered is\nregistered if the Company Share Certificate representing such shares of Company\nStock is presented to Parent, accompanied by all documents required to evidence\nand effect such transfer and evidence that (i) the shares are transferable and\n(ii) any applicable stock transfer taxes have been paid.\n\n          Until surrendered as contemplated by this Article II, each Company\nShare Certificate shall, subject to dissenters rights under the CGCL and Section\n2.05, be deemed at any time after the Effective Time to represent only the right\nto receive upon surrender the applicable shares of Parent Common Stock and any\ncash to be paid to such holder pursuant to Section 2.01 with respect to the\nshares of Company Stock formerly represented thereby to which such holder is\nentitled pursuant to Section 2.01 and cash in lieu of any fractional shares\npursuant to Section 2.02(e).\n\n          (b)  Escrow Fund.  Prior to or simultaneously with the Closing, the\n               -----------\nShareholders' Representative (as defined in Section 9.04) and Parent shall enter\ninto an escrow agreement (the \"Escrow Agreement\") with an escrow agent selected \n                               ----------------\nby Parent and reasonably acceptable to the Shareholders' Representative (the\n\"Escrow Agent\") substantially in the form of Exhibit B hereto.  Pursuant to the \n------------                                ---------\nterms of the Escrow Agreement, at the Closing, Parent shall deposit one or more\ncertificates representing, in the aggregate, the Escrow Shares, into an escrow\naccount, which account is to be managed by the Escrow Agent (the \"Escrow\n                                                                  -------\nAccount\"). Any Escrow Shares in the Escrow Account are referred to herein as the\n-------\n\"Escrow Fund.\"  In connection with such deposit of the Escrow Shares with the \n -----------      \nEscrow Agent and as of the Effective Time, each holder of Company Stock will be\ndeemed to have received and deposited with the Escrow Agent each shareholder's\npro rata interest in the Escrow Fund as determined as of Closing by reference to\nsuch shareholder's pro rata share of shares Parent Common Stock deliverable at\nthe Closing pursuant to Section 2.01(a)(i) (plus any additional shares as may be\nissued upon any stock split, stock dividend or recapitalization effected by\nParent after the Effective Time with respect to shares constituting the Escrow\nFund), without any act of the shareholders of the Company (the \"Company\n                                                                -------\nShareholders\"). Distributions of any Escrow Shares from the Escrow Account shall\n------------\nbe governed by the terms and conditions of the Escrow Agreement. The adoption of\nthis Agreement and the approval of the Merger by the Company Shareholders shall\nconstitute approval of the Escrow Agreement and of all the arrangements relating\nthereto, including, without limitation, the placement of the Escrow Shares in\nescrow and the appointment of the Shareholders' Representative. No portion of\nthe Escrow Fund shall be\n\n                                       6\n\n \ncontributed in respect of any Company Options or other security exercisable or\nconvertible into Company Stock. To the extent possible, no shares of Parent\nCommon Stock contributed to the Escrow Fund shall be unvested or subject to any\nright of repurchase, risk of forfeiture or other condition in favor of the\nSurviving Corporation. To avoid ambiguity with regard to the foregoing sentence,\nany shares of Parent Common Stock deposited into the Escrow Fund on behalf of\nthe individuals listed in Schedule 6.05(b) hereto shall be comprised of shares\nthat would otherwise be delivered to such individuals as fully vested shares.\n\n          (c)  Distributions with Respect to Unexchanged Shares.  No dividends \n               ------------------------------------------------   \nor other distributions declared or made after the Effective Time with respect to\nshares of Parent Common Stock deliverable pursuant to Section 2.01(a)(i) or\nSection 2.01(a)(ii) with a record date after the Effective Time shall be paid to\nthe holder of any unsurrendered Company Share Certificate with respect to such\nshares until the holder of such Company Share Certificate shall surrender such\nCompany Share Certificate in accordance with this Section 2.02.\n\n          (d)  No Further Rights in Company Stock.  All shares of Parent \n               ----------------------------------     \nCommon Stock and\/or cash issued upon conversion of shares of Company Stock in\naccordance with the terms hereof (and any cash paid in lieu of fractional shares\npursuant to Section 2.02(e)) shall be deemed to have been issued in full\nsatisfaction of all rights pertaining to such shares of Company Stock.\n\n          (e)  No Fractional Shares.  No certificates or scrip representing \n               --------------------            \nfractional shares of Parent Common Stock shall be issued upon the surrender for\nexchange of Company Share Certificates, and such fractional share interests will\nnot entitle the owner thereof to vote or to any other rights of a shareholder of\nParent. Each holder of a fractional share interest shall be paid an amount in\ncash (without interest) equal to the product obtained by multiplying such\nfractional share interest to which such holder (after taking into account all\nfractional share interests then held by such holder) would otherwise be entitled\nby $15.56.\n\n          (f)  No Liability.  Neither Parent nor the Surviving Corporation \n               ------------        \nshall be liable to any holder of shares of Company Stock for any such shares of\nParent Common Stock (or dividends or distributions with respect thereto) or cash\nproperly and legally delivered to a public official pursuant to any abandoned\nproperty, escheat or similar Law (as defined in Section 3.06(a)).\n\n          (g)  Withholding Rights.  Each of the Surviving Corporation and \n               ------------------     \nParent shall be entitled to deduct and withhold from the consideration otherwise\npayable pursuant to this Agreement to any holder of shares of Company Stock such\namounts as it is required to deduct and withhold with respect to the making of\nsuch payment under the Code, or any provision of state, local or foreign Tax (as\ndefined in Section 3.16(b)) Law (as defined in Section 3.06(a)). To the extent\nthat amounts are so withheld by the Exchange Agent, the Surviving Corporation or\nParent, as the case may be, such withheld amounts shall be treated for all\npurposes of this Agreement as having been paid to the holder of the shares of\nCompany Stock in respect of which such deduction and withholding was made by the\nExchange Agent, the Surviving Corporation or Parent, as the case may be.\n\n                                       7\n\n\n \n          (h)  Affiliates. Notwithstanding anything to the contrary contained \n               ----------          \nin this Agreement, no shares of Parent Common Stock (or certificates therefor)\nshall be issued in exchange for any Company Stock Certificates to any person\nwho, prior to the Effective Time, may be an \"affiliate\" (as that term is used in\nRule 145 under the Securities Act of 1933, as amended (the \"Securities Act\")) of\n                                                            -------------- \nthe Company until such person shall have delivered to Parent and the Company a\nduly executed Affiliate Agreement as contemplated by Section 6.10.\n\n          (i)  Lost Certificates.  If any Company Share Certificate shall have \n               -----------------      \nbeen lost, stolen or destroyed, upon the making of an affidavit of that fact by\nthe person claiming such Company Share Certificate to be lost, stolen or\ndestroyed and, if required by the Surviving Corporation, the posting by such\nperson of a bond, in such reasonable amount as the Surviving Corporation may\ndirect, as indemnity against any claim that may be made against it with respect\nto such Company Share Certificate, Parent shall issue in exchange for such lost,\nstolen or destroyed Company Share Certificate, cash, if applicable, the\napplicable shares of Parent Common Stock (and dividends or other distributions\npursuant to Section 2.02(c)), and cash in lieu of fractional shares pursuant to\nSection 2.02(e), to which such person is entitled pursuant to the provisions of\nthis Article II.\n\n          (j)  Return of Shares of Parent Common Stock.  Promptly following the \n               ---------------------------------------  \nend of the second full calendar month after the Effective Time, the Exchange\nAgent shall return to Parent all of the remaining shares of Parent Common Stock\nin the Escrow Fund and the Exchange Agent's duties shall terminate. Thereafter,\nupon the surrender of a Company Share Certificate to Parent and such other\ndocuments as may reasonably be required by Parent, and subject to applicable\nabandoned property, escheat and similar laws, the holder of such Company Share\nCertificate shall be entitled to receive in exchange therefor cash, if\napplicable, the applicable shares of Parent Common Stock (and dividends or other\ndistributions pursuant to Section 2.02(c)), and cash in lieu of fractional\nshares pursuant to Section 2.02(e) without any interest thereon.\n\n          (k)  Exemption from Registration; Restricted Securities.  Shares of \n               --------------------------------------------------   \nParent Common Stock to be issued pursuant to this Agreement have not been, and\nwill not be, registered under the Securities Act. Except as otherwise\ncontemplated herein, assuming the accuracy of the representations contained in\nthe Shareholder Certificate delivered by each of the Company Shareholders to\nParent, the shares of Parent Common Stock will be issued in a transaction that\nis exempt from the registration requirements of the Securities Act by reason of\nRule 506 thereof. Such shares of Parent Common Stock will be \"restricted\nsecurities\" under the federal securities laws and cannot be offered or resold\nexcept pursuant to registration under the Securities Act or an available\nexemption from registration.\n\n\n                                       8\n\n\n \n     SECTION 2.03   Stock Transfer Books.  At the Effective Time, the stock \n                    -------------------- \ntransfer books of the Company shall be closed and there shall be no further\nregistration of transfers of shares of Company Stock thereafter on the records\nof the Company. From and after the Effective Time, the holders of certificates\nrepresenting shares of Company Stock outstanding immediately prior to the\nEffective Time shall cease to have any rights with respect to such shares of\nCompany Stock, except as otherwise provided in this Agreement or by Law.\n\n     SECTION 2.04   Company Stock Options.  At the Effective Time, Parent shall\n                    ---------------------      \nassume all options to purchase Common Stock issued by the Company pursuant to\nthe Stock Plan (as defined in Section 3.04(b)) whether vested or unvested and\nwhether exercisable or unexercisable (each a \"Company Option\"), and the\nassumption of such options shall be evidenced by an \"Option Assumption\nAgreement\" (as defined in Section 6.05(c)) in substantially the form attached\nhereto at Exhibit I.   The Company's repurchase right with respect to any\nunvested shares acquired by the exercise of Company Options shall be assigned to\nParent by virtue of the Merger and without any further action on the part of the\nCompany or the holder of the outstanding Company Option.  Immediately after the\nEffective Time, each Company Option outstanding immediately prior to the\nEffective Time shall be deemed to constitute an option to acquire, on the same\nterms and conditions as were applicable under such Company Option at the\nEffective Time, such number of shares of Parent Common Stock as is equal to the\nnumber of shares of Company Common Stock subject to the unexercised portion of\nsuch option (or, in the case of Company Options held by former employees of the\nCompany, the number of shares of Company Common Stock subject to the vested but\nunexercised portion of such option) multiplied by the Common Exchange Ratio\n(rounded down to the nearest whole number).  The exercise price per share of\neach such assumed Company Option shall be equal to the exercise price of such\noption immediately prior to the Effective Time divided by the Common Exchange\nRatio (rounded up to the nearest whole cent). The term, vesting schedule, status\nas an \"incentive stock option\" under Section 422 of the Code, if applicable, and\nall of the other terms of the Company Options shall otherwise remain unchanged.\nIt is the intention of the parties that the Company Options so assumed by Parent\nqualify following the Effective Time as incentive stock options as defined in\nSection 422 of the Code to the extent such Company Options qualified as\nincentive stock options prior to the Effective Time.  Promptly after the\nEffective Time (but in no event later than 30 calendar days), Parent will issue\nto each person who, immediately prior to the Effective Time, was a holder of a\nCompany Option a document evidencing the foregoing assumption of such option by\nParent.  Within a reasonable time (but in no event later than 90 calendar days)\nafter the Effective Time, Parent shall file a registration statement on Form S-8\n(or any successor or other appropriate forms) which will register the Parent\nShares subject to assumed Company Options to the extent permitted by federal\nsecurities laws and shall use its commercially reasonable efforts to maintain\nthe effectiveness of such registration statement or registration statements (and\nmaintain the current status of the prospectus or prospectuses contained therein)\nfor so long as such options remain outstanding.\n\n     SECTION 2.05   Dissenting Shares.\n                    --------------                    \n\n          (a)  Notwithstanding any provision of this Agreement to the contrary,\nshares of Company Stock that are outstanding immediately prior to the Effective\nTime and which are held by shareholders who have exercised and perfected\ndissenters' rights for such shares of Company Stock in accordance with Chapter\n13 of the CGCL (collectively, the \"Dissenting\n                                   ----------\n\n                                       9\n\n \nShares\") shall not be converted into or represent the right to receive the \n-------\napplicable shares of Parent Common Stock (or cash in lieu of fractional shares)\nand\/or cash. Such shareholders shall be entitled to receive payment of the\nappraised value of such shares of Company Common Stock held by them in\naccordance with such rights as may be granted to such persons in Chapter 13 of\nthe CGCL, unless and until such shareholders fail to perfect or withdraw or\notherwise lose their dissenters' rights under the CGCL. All Dissenting Shares\nheld by shareholders who shall have failed to perfect or who effectively shall\nhave withdrawn or lost their rights to appraisal of such shares of Company\nCommon Stock under the CGCL shall thereupon be deemed to have been converted\ninto and to have become exchangeable for, as of the Effective Time, the right to\nreceive the applicable shares of Parent Common Stock (or cash in lieu of\nfractional shares) and\/or cash, without any interest thereon, upon the\nsurrender, in the manner provided in Section 2.02, including the provision of\nthe Escrow Shares, pursuant to Section 2.02(b), of the corresponding Company\nShare Certificate.\n\n          (b)  The Company shall give Parent (i) prompt notice of any demands\nfor appraisal received by the Company, withdrawals of such demands, and any\nother related instruments served pursuant to the CGCL and received by the\nCompany and (ii) the opportunity to direct all negotiations and proceedings with\nrespect to demands for appraisal under the CGCL. The Company shall not, except\nwith the prior written consent of Parent, make any payment with respect to any\ndemands for appraisal or offer to settle or settle any such demands.\n\n                                  ARTICLE III\n                                  -----------\n\n                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n                 ---------------------------------------------\n\n     The disclosure schedule delivered by the Company to Parent and Merger\nSub concurrently with the execution of this Agreement (the \"Company Disclosure\n                                                            ------------------\nSchedule\") shall be arranged in paragraphs corresponding to the numbered and\n--------                                                                    \nlettered paragraphs contained in this Article III.  The Company has used its\ngood faith efforts to provide conspicuous cross-references for each description\nof an exception or disclosure that may relate to more than one representation\ncontained in Article III.  If through oversight the Company has failed to cross-\nreference properly, an exception or disclosure with respect to a specific\nsection shall be deemed to be exceptions or disclosures with respect to other\napplicable sections.  Except as set forth in the Company Disclosure Schedule,\nwhich provides an exception to or otherwise qualifies in reasonable detail and\nwith specific Section references, the representations or warranties of the\nCompany specifically referred to therein, the Company hereby represents and\nwarrants to Parent and Merger Sub that:\n\n     SECTION 3.01   Organization and Qualification. The Company is a corporation\n                    ------------------------------                              \nduly incorporated, validly existing and in good standing under the laws of the\nState of California and has all requisite corporate power and authority to own,\nlease and operate its properties and to carry on its business as it is now being\nconducted, except where the failure to be so organized, existing or in good\nstanding or to have such corporate power and authority have not had, and could\nnot reasonably be expected to have, individually or in the aggregate, a Company\nMaterial Adverse Effect (as defined below).  The Company is duly qualified or\nlicensed as a foreign corporation to do business, and is in good standing, in\neach jurisdiction where the character of the properties owned, leased or\noperated by it or the nature of its business makes such \n\n\n                                      10\n\n\n \nqualification or licensing necessary, except for such failures to be so\nqualified or licensed and in good standing that have not had, and could not\nreasonably be expected to have, individually or in the aggregate, a Company\nMaterial Adverse Effect. The term \"Company Material Adverse Effect\" means any\nchange in or effect on the business of the Company that is materially adverse to\nthe business, operations, financial condition or results of operations of the\nCompany taken as a whole, except for any such changes or effects resulting from\nor in connection with (a) any changes in general economic conditions, (b) any\ndecline in the manner in which businesses such as the Company are valued or any\nadverse changes in the United States securities market, or (c) any changes\nrelated to the announcement of the Merger or actions taken as a result of this\nAgreement.\n\n     SECTION 3.02   Articles of Incorporation and Bylaws. The Company has \n                    ------------------------------------     \nheretofore made available to Parent a complete and correct copy of (a) the\nArticles of Incorporation and the Bylaws of the Company including all amendments\nthereto, (b) the minute books containing consents, actions and meeting of the\nCompany Shareholders and the Company's Board of Directors and any committees\nthereof, and (c) the stock transfer books of the Company setting forth all\ntransfers of any capital stock of the Company. Such Articles of Incorporation\nand Bylaws are in full force and effect. The Company is not in violation of any\nof the provisions of its Articles of Incorporation or Bylaws. The corporate\nminute books, stock certificate books, stock registers and other corporate\nrecords of the Company are complete and accurate, and the signatures appearing\non all documents contained therein are the true or facsimile signatures of the\npersons purported to have signed the same.\n\n     SECTION 3.03    No Subsidiaries.  The Company does not own, of record or\n                     ---------------            \nbeneficially, any direct or indirect equity or other interest, or any right\n(contingent or otherwise) to acquire the same, nor control directly or\nindirectly or have any direct or indirect equity participation interest, in any\ncorporation, partnership, or formal written joint venture, association or other\nentity.  The Company is not a member of (nor is any part of the Company's\nbusiness conducted through) any partnership, nor is the Company a participant in\nany formal written joint venture.\n\n     SECTION 3.04    Capitalization.\n                     --------------   \n\n          (a)  The authorized capital stock of the Company consists of\n28,113,990 shares of Company Common Stock and 1,886,010 shares of Company\nPreferred Stock. As of the date hereof, (i) 16,040,100 shares of Company Common\nStock are issued and outstanding, all of which are duly authorized, validly\nissued, fully paid and nonassessable, (ii) no shares of Company Common Stock are\nheld in the treasury of the Company and (iii) 4,000,000 shares of Company Common\nStock are reserved for future issuance pursuant to Company Options. As of the\ndate of this Agreement, 754,404 shares of Company Preferred Stock are issued and\noutstanding, all of which are duly authorized, validly issued, fully paid and\nnonassessable. Each Share of Company Preferred Stock is convertible into one\nshare of Company Common Stock. There are not outstanding any other shares of\nCompany Preferred Stock or rights to acquire shares of Company Preferred Stock.\nAs of the date hereof, the outstanding shares of Company Common Stock and\nCompany Preferred Stock are owned as set forth in Section 3.04(a) of the Company\nDisclosure Schedule. Section 3.04(a) of the Company Disclosure Schedule also\nprovides an accurate and complete description of the terms of each\n\n                                      11\n\n\n \nrepurchase option which is held by the Company and to which any of such shares\nis subject. The Company will deliver in electronic form at the Closing, a table\ncontaining the following information with respect to the holders of outstanding\nCompany Common Stock or Company Preferred Stock: exact registration name (as it\nappears on such holder's certificate), complete address, social security number\nor tax identification number, certificate number(s), issuance date(s) and number\nof shares (per certificate).\n\n          (b)  The Company has reserved 4,000,000 shares of Company Common \nStock for issuance under the Company's 1999 Stock Option Plan (the \"Stock Plan\")\n                                                                    ----------\nof which options to purchase 2,420,000 shares of Company Common Stock are\noutstanding as of the date of this Agreement. Section 3.04(b) of the Company\nDisclosure Schedule accurately sets forth with respect to each Company Option\nthat is outstanding as of the date of this Agreement: (i) the name of the holder\nof such Company Option; (ii) the total number of shares of Company Common Stock\nsubject to such Company Option; (iii) the vesting commencement date of such\noption and the term of such Company Option; (iv) the vesting schedule for such\nCompany Option; (v) the exercise price per share of Company Common Stock\npurchasable under such Company Option; and (vi) whether such Company Option has\nbeen designated an \"incentive stock option\" as defined in Section 422 of the\nCode. No Company Option will by its term require an adjustment in connection\nwith the Merger other than conversion into an option to purchase Parent Common\nStock. Except as set forth in Section 3.04(b) of the Company Disclosure\nSchedule, neither the consummation of transactions contemplated by this\nAgreement, nor any action taken or to be taken by Company in connection with\nsuch transactions, will result in (vii) any acceleration of vesting in favor of\nany optionee under any Company Option; (viii) any additional benefits for any\noptionee under any Company Option other than conversion of such Company Options\ninto options to purchase Parent Common Stock; or (ix) the inability of Parent\nafter the Effective Time to exercise any right or benefit held by Company prior\nto the Effective Time with respect to any Company Option assumed by Parent,\nincluding, without limitation, the right to repurchase an optionee's unvested\nshares on termination of such optionee's employment. The assumption by Parent of\nCompany Options in accordance with Section 2.04(a) hereunder will not (x) give\nthe optionees additional benefits which they did not have under their options\nprior to such assumption (after taking into account the existing provisions of\nthe options, such as their respective exercise prices and vesting schedules) or\n(xi) constitute a breach of the Stock Plan or any agreement entered into\npursuant to such plan.\n\n          (c)  Except as set forth in Section 3.04(c) of the Company Disclosure\nSchedule and except for the conversion rights of the Company Preferred Stock,\nthere are no options, warrants or other rights, agreements, arrangements or\ncommitments of any character relating to the issued or unissued capital stock of\nthe Company or obligating the Company to issue or sell any share of capital\nstock of, or other equity interest in, the Company. All shares of Company Stock\nso subject to issuance, upon issuance on the terms and conditions specified in\nthe instruments pursuant to which they are issuable, will be duly authorized,\nvalidly issued, fully paid and nonassessable. There are no outstanding\ncontractual obligations of the Company to repurchase, redeem or otherwise\nacquire any share of capital stock of, or other equity interest in, the Company.\nThere are no contractual obligations of the Company to provide funds to, or make\nany investment (in the form of a loan, capital contribution or otherwise) to any\nother person. The holders of Company Options have been or will be given, or\nshall have properly waived, any required notice of the Merger prior thereto.\n\n\n                                      12\n\n \n          (d)  All outstanding shares of Company Common Stock and all\noutstanding Company Options have been issued and granted in compliance in all\nmaterial respects with (i) all applicable federal securities laws and applicable\nstate securities or \"blue sky\" laws and (ii) all requirements set forth in\napplicable contracts, agreements, and instruments.\n\n          (e)  Except as set forth in Section 3.04(e) of the Company Disclosure\nSchedule, the Company has never repurchased, redeemed or otherwise reacquired\nany shares of capital stock or other securities of the Company.\n\n     SECTION 3.05   Authority Relative to This Agreement.\n                    -------------------------------------\n\n          (a)  The Company has all necessary corporate power and authority to\nexecute and deliver this Agreement and, subject to obtaining the necessary\napprovals of the Company Shareholders, to perform its obligations hereunder and\nto consummate the Merger and the other transactions contemplated by this\nAgreement. The execution and delivery of this Agreement by the Company and the\nconsummation by the Company of the Merger and the other transactions\ncontemplated by this Agreement have been duly and validly authorized by all\nnecessary corporate action and no other corporate proceedings on the part of the\nCompany are necessary to authorize this Agreement or to consummate the Merger\nand the other transactions contemplated by this Agreement (other than, with\nrespect to the Merger, the approval of this Agreement by the holders of the\nrequisite number of shares of Company Common Stock and Company Preferred Stock\nand the filing and recordation of appropriate merger documents as required by\nthe CGCL). This Agreement has been duly and validly executed and delivered by\nthe Company and, assuming the due authorization, execution and delivery by\nParent and Merger Sub, constitutes a legal, valid and binding obligation of the\nCompany, enforceable against the Company in accordance with its terms, subject\nto any applicable bankruptcy, reorganization, insolvency, moratorium or similar\nLaws affecting creditors' rights generally and subject, as to enforceability, to\nthe effect of general principles of equity.\n\n          (b)  Without limiting the generality of the foregoing, the Board of\nDirectors of the Company, by unanimous written consent or at a meeting duly\ncalled and held, has by the unanimous vote of all directors (except that Zachary\nAbrams, a director of the Company, did not participate in any discussion of the\nCompany's Board of Directors regarding the Merger or the transactions\ncontemplated herein, and he abstained from all votes taken in connection\ntherewith or herewith) (i) determined that the Merger is fair and in the best\ninterest of the Company and its shareholders, (ii) approved the Merger and this\nAgreement in accordance with the provisions of the CGCL, and (iii) directed that\nthis Agreement and the Merger be submitted to the Company's shareholders for\ntheir approval and resolved to recommend that the Company's shareholders vote in\nfavor of the adoption and approval of this Agreement and the Merger.\n\n     SECTION 3.06   No Conflict; Required Filings and Consents.\n                    ------------------------------------------ \n\n          (a)  The execution and delivery of this Agreement by the Company do\nnot, and the performance of this Agreement by the Company will not, (i) conflict\nwith or violate the Articles of Incorporation or Bylaws of the Company, (ii)\nassuming that all consents, approvals, authorizations and other actions\ndescribed in Section 3.06(b) have been obtained and\n\n                                      13\n\n \nall filings and obligations described in Section 3.06(b) have been made,\nconflict with or violate in any respect any foreign or domestic law, franchise,\npermit, concession, license, statute, ordinance, rule, regulation, order,\njudgment or decree (\"Law\") applicable to the Company or by which any property or\n                     ---                                                        \nasset of the Company is bound or affected, or (iii) result in any breach of or\nconstitute a default (or an event which with notice or lapse of time or both\nwould become a default) under, or give to others any right of termination,\namendment, acceleration or cancellation of, or result in the creation of a lien\nor other encumbrance on any property or asset of the Company pursuant to, any\nnote, bond, mortgage, indenture, contract, agreement, lease, license, permit,\nfranchise or other instrument or obligation, except, with respect to clause\n(iii), for any such conflicts, violations, breaches, defaults, or other\noccurrences that could not reasonably be expected, individually or in the\naggregate, to prevent or materially delay the consummation of the transactions\ncontemplated by this Agreement.\n\n          (b)  The execution and delivery of this Agreement by the Company do\nnot, and the performance of this Agreement by the Company will not, require any\nconsent, approval, order, authorization, registration or permit of, or filing\nwith or notification to, any domestic or foreign governmental or regulatory\nauthority, court, administrative agency or commission or quasi-governmental or\nprivate body exercising any regulatory, taxing, importing or other governmental\nauthority (a \"Governmental Entity\") on the part of the Company, except (i) for \n              -------------------                     \nthe pre-merger notification requirements of the Hart Scott Rodino Antitrust\nImprovements Act of 1976, as amended, and the rules and regulations thereunder\n(the \"HSR Act\"), and (ii) for the filing and recordation of appropriate merger\ndocuments as required by the CGCL, and (iii) where failure to obtain such\nconsents, approvals, authorizations or permits, or to make such filings or\nnotifications could not reasonably be expected, individually or in the\naggregate, to prevent or materially delay the consummation of the transactions\ncontemplated by this Agreement.\n\n     SECTION 3.07   Permits; Compliance.\n                    ------------------- \n\n          (a)  The Company is in possession of all franchises, grants,\nauthorizations, licenses, permits, easements, variances, exceptions, consents,\ncertificates, approvals and orders of any Governmental Entity necessary for the\nCompany to own, lease and otherwise hold and operate its properties and other\nassets and to carry on its business as it is now being conducted (the \"Company\n                                                                       -------\nPermits\"). All Company Permits are in full force and effect and will remain\n------- \nso after the Closing and no suspension or cancellation of any Company Permit is\npending or, to the knowledge of the Company, threatened. The Company has not\nreceived any notice or other communication from any Governmental Entity\nregarding (i) any actual or possible violation of or failure to comply with any\nterm or requirement of any Company Permit, or (ii) any actual or possible\nrevocation, withdrawal, suspension, cancellation, termination or modification of\nany Company Permit.\n\n          (b)  The Company is not in conflict with, or in default or violation\nof (i) any Law applicable to the Company or by which any property or asset of\nthe Company is bound or affected, (ii) any note, bond, mortgage, indenture,\ncontract, agreement, lease, license, permit, franchise or other instrument or\nobligation to which the Company is a party or by which the Company or any\nproperty or asset of the Company is bound or affected, or (iii) any Company\nPermits.\n\n                                      14\n\n \n     SECTION 3.08   Financial Statements.\n                    -------------------- \n\n          (a)  True and complete copies of (i) the audited consolidated balance\nsheet of the Company as of December 31, 1999, and the related audited statements\nof operations, changes in shareholders' equity and changes in cash flows for the\nyears then ended, together with all related notes and schedules thereto\n(collectively referred to herein as the \"Audited Financial Statements\"), and\n                                         ----------------------------   \n(ii) the unaudited consolidated balance sheet of the Company as of December 31,\n2000 (the \"Reference Balance Sheet\"), and the related statement of operations,\n           -----------------------                   \nchanges in shareholders' equity and changes in cash flows for the 12-months\nended December 31, 2000 (collectively referred to herein as the \"Interim\n                                                                 -------\nFinancial Statements\"), are attached as Section 3.08(a) of the Company\n-------------------- \nDisclosure Schedule. The Audited Financial Statements (including, in each case,\nany notes thereto) were prepared in accordance with U.S. generally accepted\naccounting principles (\"U.S. GAAP\") applied on a consistent basis throughout \n                        ---------  \nthe periods indicated (except as may be indicated in the notes thereto) and each\npresent fairly, in all material respects, the consolidated financial position of\nthe Company as at the respective dates thereof and for the respective periods\nindicated therein, except as otherwise noted therein (subject, in the case of\nunaudited statements, to normal and recurring year-end adjustments which were\nnot and are not expected, individually or in the aggregate, to be material).\n\n          (b)  Except as set forth in Section 3.08(b) of the Company Disclosure\nSchedule, there are no debts, liabilities or obligations, whether accrued or\nfixed, absolute or contingent, matured or unmatured or determined or\ndeterminable (\"Liabilities\") of the Company, other than Liabilities (i)\n               ----------- \nreflected or reserved against on the Reference Balance Sheet and (ii) in an\naggregate amount not exceeding $25,000 incurred since December 31, 2000 in the\nordinary course of the business, consistent with the past practice. Except as\nset forth in Section 3.08(b) of the Company Disclosure Schedule, reserves are\nreflected on the Reference Balance Sheet and on the books of account and other\nfinancial records of the Company against all Liabilities of the Company in\namounts that have been established on a basis consistent with the past practice\nof the Company. Except as set forth in Section 3.08(b) of the Company Disclosure\nSchedule, there are no outstanding warranty claims against the Company.\n\n     SECTION 3.09   Absence of Certain Changes or Events.  Since January 1, \n                    ------------------------------------    \n2001, except as contemplated by or as disclosed in this Agreement, the Company\nhas conducted its business only in the ordinary course and in a manner\nconsistent with past practice and, since such date, (a) there has not been any\nCompany Material Adverse Effect and (b) the Company has not taken or legally\ncommitted to take any of the actions specified in Sections 5.01(a) through\n5.01(bb).\n\n     SECTION 3.10   Absence of Litigation.  Except as set forth in Section 3.10\n                    ---------------------     \nof the Company Disclosure Schedule, there is no litigation, suit, claim, action,\nproceeding, arbitration or investigation pending before any agency, court or\ntribunal, foreign or domestic (each a \"Legal Proceeding\") or, to the knowledge\nof the Company, threatened against the Company, or any property or asset owned\nor used by the Company or any Person whose liability the Company has or may have\nassumed, either contractually or by operation of law, before any court,\narbitrator or Governmental Entity, which could reasonably be expected, if\nresolved adversely to the Company, to (i) impair the operations of the Company\nas currently conducted, including, without limitation, any claim of infringement\nof any intellectual property right, (ii) result in losses to the \n\n                                      15\n\n \nCompany in excess of $25,000, (iii) impair the ability of the Company to perform\nits obligations under this Agreement or (iv) prevent delay or make illegal the\nconsummation of the transactions contemplated by this Agreement. To the\nCompany's knowledge, no event has occurred, and no claim, dispute or other\ncondition or circumstance exists, that could reasonably be expected to give rise\nto or serve as a basis for, the commencement of any Legal Proceeding. Neither\nthe Company, the officers or directors thereof in their capacity as such, nor\nany property or assets of the Company is subject to any continuing order of,\nconsent decree, settlement agreement or other similar written agreement with,\nor, to the knowledge of the Company, continuing investigation by, any\nGovernmental Entity, or any order, writ, judgment, injunction, decree,\ndetermination or award of any court, arbitrator or Governmental Entity.\n\n     SECTION 3.11    Employee Benefit Plans; Labor Matters.\n                     -------------------------------------  \n\n          (a)  Section 3.11(a) of the Company Disclosure Schedule lists (i) all\nemployee benefit plans (as defined in Section 3(3) of the Employee Retirement\nIncome Security Act of 1974, as amended (\"ERISA\")) and all bonus, stock option,\n                                          -----                                \nstock purchase, restricted stock, incentive, deferred compensation, retiree\nmedical or life insurance, supplemental retirement, severance or other benefit\nplans, programs or arrangements, and all employment, termination, severance or\nother contracts or agreements, whether legally enforceable or not, to which the\nCompany is a party, with respect to which the Company has any obligation or\nwhich are maintained, contributed to or sponsored by the Company for the benefit\nof any current or former employee, officer or director of the Company, (ii) each\nemployee benefit plan for which the Company could incur liability under Section\n4069 of ERISA in the event such plan has been or were to be terminated, (iii)\nany plan in respect of which the Company could incur liability under Section\n4212(c) of ERISA, and (iv) any contracts, arrangements or understandings between\nthe Company and any employee of the Company including, without limitation, any\ncontracts, arrangements or understandings relating to a sale of the Company\nother than Company Options (collectively, the \"Plans\").\n                                               -----   \n\n          (b)  Each Plan is in writing and the Company has furnished Parent with\na true and complete copy of each Plan and a true and complete copy of each\nmaterial document, if any, prepared in connection with each such Plan,\nincluding, without limitation, (i) a copy of each trust or other funding\narrangement, (ii) each summary plan description and summary of material\nmodifications, (iii) the most recently filed Internal Revenue Service (\"IRS\")\n                                                                        ---  \nForm 5500, (iv) the most recently received IRS determination letter for each\nsuch Plan, (v) the most recently prepared actuarial report and financial\nstatement in connection with each such Plan, and (vi) any correspondence with\nthe IRS or the Department of Labor with respect to each such Plan. Except as\ndisclosed on Section 3.11(a) of the Company Disclosure Schedule, there are no\nother employee benefit plans, programs, arrangements or agreements, whether\nformal or informal, whether in writing or not, to which the Company is a party,\nwith respect to which the Company has any obligation or which are maintained,\ncontributed to or sponsored by the Company for the benefit of any current or\nformer employee, consultant officer or director of the Company. The Company has\nno express or implied commitment, whether legally enforceable or not, (vii) to\ncreate, incur liability with respect to, or cause to exist, any other employee\nbenefit plan, program or arrangement, (viii) to enter into any contract or\nagreement to provide compensation or benefits to any individual, or (ix) to\nmodify, change or terminate any Plan, other than with respect to a modification,\nchange or termination required by ERISA or the Code.\n\n\n                                      16\n\n \n          (c)  None of the Plans is a multiemployer plan (within the meaning of\nSection 3(37) or 4001(a)(3) of ERISA) (a \"Multiemployer Plan\") or a single\n                                          ------------------\nemployer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for\nwhich the Company could incur liability under Section 4063 or 4064 of ERISA (a\n\"Multiple Employer Plan\"). None of the Plans provides for or promises retiree\n -----------------------                                               \nmedical, disability or life insurance benefits to any current or former\nemployee, officer or director of the Company. Each of the Plans is subject only\nto the laws of the United States or a political subdivision thereof.\n\n          (d)  None of the Plans provides for the payment of separation,\nseverance, termination or similar benefits to any Person or obligates the\nCompany to pay separation, severance, termination or similar benefits solely or\npartially as a result of any transaction contemplated by this Agreement or as a\nresult of a \"change in control\", within the meaning of such term under Section\n280G of the Code. Neither the execution and delivery of this Agreement nor the\nconsummation of the transactions contemplated hereby, either alone or together\nwith another event, will (i) result in any payment (including, without\nlimitation, severance, unemployment compensation, golden parachute and\nforgiveness of indebtedness) becoming due under any Plan, (ii) materially\nincrease any benefits otherwise payable under any Plan or other arrangement,\n(iii) result in the acceleration of the time of payment, vesting or funding of\nany benefits including, but not limited to the acceleration of the vesting and\nexercisability of any Company Options, or (iv) affect any Plan's current\ntreatment under any Laws including any tax or social contribution law.\n\n          (e)  Each Plan is now and always has been operated in accordance with\nits terms and the requirements of all applicable laws, regulations and rules\npromulgated thereunder including, without limitation, ERISA and the Code. The\nCompany has performed all obligations required to be performed by it under each\nPlan, and is not in any respect in default under or in violation of, and has no\nknowledge of any default or violation by any party to, any Plan. No action,\nclaim or proceeding is pending or, to the knowledge of the Company, threatened\nwith respect to any Plan (other than claims for benefits in the ordinary course)\nand no fact or event exists that could give rise to any such action, claim or\nproceeding. Neither the Company nor any Person that is a member of the same\ncontrolled group as the Company or under common control with the Company within\nthe meaning of Section 414 of the Code (each an \"ERISA Affiliate\") is subject to\n                                                 ---------------\nany penalty or tax with respect to any Plan under Section 402(i) of ERISA or\nSections 4975 through 4980 of the Code.\n\n          (f)  Each Plan that is intended to be qualified under Section 401(a)\nor Section 401(k) of the Code has received a timely favorable determination\nletter from the IRS covering all of the provisions applicable to the Plan for\nwhich determination letters are currently available that the Plan is so\nqualified and each trust established in connection with any Plan that is\nintended to be exempt from federal income taxation under Section 501(a) of the\nCode has received a determination letter from the IRS that it is so exempt, and\nno fact or event has occurred since the date of such determination letter or\nletters from the IRS to adversely affect the qualified status of any such Plan\nor the exempt status of any such trust.\n\n          (g)  The Company has not incurred any liability under, arising out of\nor by operation of Title IV of ERISA (other than liability for premiums to the\nPension Benefit Guaranty Corporation arising in the ordinary course), including,\nwithout limitation, any liability\n\n                                      17\n\n \nin connection with (i) the termination or reorganization of any employee benefit\nplan subject to Title IV of ERISA or (ii) the withdrawal from any Multiemployer\nPlan or Multiple Employer Plan, and no fact or event exists that could give rise\nto any such liability.\n\n          (h)  All contributions, premiums or payments required to be made or \naccrued with respect to any Plan have been made on or before their due dates.\nAll such contributions have been fully deducted for income tax purposes and no\nsuch deduction has been challenged or disallowed by any Governmental Entity and\nno fact or event exists that could give rise to any such challenge or\ndisallowance.\n\n          (i)  Except as set forth in Section 3.11(i) of the Company Disclosure \nSchedule, (i) The Company is not a party to any collective bargaining agreement\nor other labor union contract applicable to persons employed by the Company and\ncurrently there are no organizational campaigns, petitions or other unionization\nactivities seeking recognition of a collective bargaining unit which could\naffect the Company; (ii) there are no strikes, slowdowns or work stoppages\npending, or to the best knowledge of the Company, threatened between the Company\nand any of its employees, and the Company has not experienced any such strike,\nslowdown or work stoppage within the past three years; (iii) there are no unfair\nlabor practice complaints pending against the Company before the National Labor\nRelations Board or any other governmental authority or any current union\nrepresentation questions involving employees of the Company; (iv) the Company is\ncurrently in compliance with all applicable laws relating to its employees,\nincluding those related to wages, hours, worker classification, collective\nbargaining and the payment and withholding of taxes and other sums as required\nby the appropriate governmental authority and has withheld and paid to the\nappropriate governmental authority or is holding for payment not yet due to such\ngovernmental authority all amounts required to be withheld from employees of the\nCompany and is not liable for any arrears of wages, taxes, penalties or other\nsums for failure to comply with any of the foregoing; (v) the Company has paid\nin full to all employees or adequately accrued in accordance with U.S. GAAP\nconsistently applied all wages, salaries, commissions, bonuses, benefits and\nother compensation due to or on behalf of such employees; (vii) no claim with\nrespect to payment of wages, salary or overtime pay has been asserted or is now\npending or to the knowledge of the Company threatened with respect to any\npersons currently or formerly employed by the Company; (viii) neither the\nCompany is a party to, or otherwise bound by, any consent decree relating to\nemployees or employment practices; (ix) no violation of any occupational safety\nor health standards has been asserted nor is any such proceeding pending or to\nthe knowledge of the Company threatened with respect to the Company; and (x) no\ncharge of discrimination in employment or employment practices, including,\nwithout limitation, discrimination based on age, gender, race, religion or other\nlegally protected category, has been asserted nor is any such action or\nproceeding pending or to the knowledge of the Company threatened before the\nUnited States Equal Employment Opportunity Commission, or any other governmental\nauthority in any jurisdiction.\n\n                                      18\n\n \n     SECTION 3.12    Contracts.\n                     --------- \n          (a) Section 3.12 of the Company Disclosure Schedule lists each of the\nfollowing written or oral contracts and agreements of the Company (such\ncontracts and agreements being \"Material Contracts\"):\n\n               (i)  each contract and agreement for the purchase of personal \nproperty by the Company or to provide services to the Company that involves the\npayment of $25,000 or more in any one-year period;\n\n              (ii) all broker, exclusive dealing or exclusivity, distributor, \ndealer, reseller, manufacturer's representative, franchise, agency, or any other\ncontract that compensates any Person based on any sales by the Company or any\nother contract that compensates any Person based on any sales by the Company\nthat can in any case reasonably be expected to result in payments by or to the\nCompany of $25,000 or more in any one-year period;\n\n             (iii)  all leases and subleases of real property;\n\n              (iv)  all leases of personal property with lease payments greater \nthan $25,000 per year;\n\n               (v)  all contracts and agreements relating to indebtedness \n(other than trade indebtedness) of the Company, including, without limitation,\nany contracts and agreements in which the Company is a guarantor of\nindebtedness;\n\n              (vi) all contracts and agreements with any Governmental Entity to \nwhich the Company is a party;\n\n             (vii)  all contracts and agreements that limit or purport to limit \nthe ability of the Company to compete in any line of business, with any Person,\nin any geographic area or during any period of time;\n\n            (viii)  all contracts relevant to the Company's business that \ncontain confidentiality requirements (excluding all nondisclosure agreements);\n\n              (ix) all contracts and agreements between or among the Company and\nany shareholder of the Company or any affiliate of such Person other than those\nrelating to the acquisition of securities of the Company;\n\n               (x)  all contracts and agreements relating to the voting rights\nor obligations of a shareholder of the Company;\n\n              (xi) all contracts to manufacture any products or components for \nany third party, or to supply or distribute any products or components to any\nthird party involving a payment or payments of $50,000 in the aggregate in any\none-year period (other than reseller agreements that do not obligate the Company\nto purchase any minimum quantity);\n\n                                      19\n\n \n              (xii)  all contracts providing for indemnification of any officer,\ndirector, employee or agent (other than Articles of Incorporation and Bylaws of\nthe Company);\n\n             (xiii)  all contracts related to or regarding the performance of \nconsulting, advisory or other services or work of any type by any third party\ninvolving the payment by the Company in any one-year period of at least $25,000;\n\n              (xiv)  all contracts related to or regarding the performance of \nconsulting, advisory or other services or work of any type by the Company\ninvolving the payment to the Company in any one-year period of at least $25,000;\n\n               (xv)  all contracts involving payment of at least $25,000 that \nhave a term of more than sixty days and that may not be terminated by the\nCompany (without penalty) within 60 days after the delivery of a termination\nnotice by the Company (other than reseller agreements that do not obligate the\nCompany to purchase any minimum quantity);\n\n              (xvi)  any agreement of the Company involving the payment of at \nleast $25,000 that is terminable upon or prohibits a change of ownership or\ncontrol of the Company;\n\n             (xvii)  all contracts and agreements, whether or not made in the \nordinary course of business, that contemplate an exchange of consideration with\nan aggregate value greater than $50,000; and\n\n            (xviii)  all contracts in which the Company has agreed to \nindemnify, hold harmless, or defend any other person or entity (except those\nlisted in Section 3.12 (a)(xii)).\n\n          (b)  Except as set forth in Section 3.12 of the Company Disclosure \nSchedule, each Material Contract: (i) is valid and binding as to the Company,\nand to the knowledge of the Company, as to the other parties thereto (subject in\neach case to the effect of any applicable bankruptcy, reorganization,\ninsolvency, moratorium or similar Laws affecting creditors' rights generally and\nsubject, as to enforceability, to general principles of equity), and is in full\nforce and effect, and (ii) upon consummation of the transactions contemplated by\nthis Agreement, shall continue in full force and effect without penalty or other\nadverse consequence.\n\n          (c)  The Company has delivered or made available to Parent accurate \nand complete copies of all Material Contracts identified in Section 3.12 of the\nCompany Disclosure Schedule, including all amendments thereto. Section 3.12 of\nthe Company Disclosure Schedule provides an accurate description of the terms of\neach Material Contract that is not in written form.\n\n          (d)  Except as set forth in Section 3.12(d) of the Company Disclosure \nSchedule, to the Company's knowledge, no event has occurred, and no circumstance\nor condition exists, that (with or without notice or lapse of time) will or\ncould reasonable be expected to (i) result in a violation or breach of a\nMaterial Contract (including nondisclosure agreements to which the Company is a\nparty), (ii) give any entity the right to declare a default or exercise any\nremedy under any Material Contract, (iii) give any entity the right to\naccelerate the maturity or\n                                      20\n\n \nperformance of any Material Contract or (iv) give any entity to the right to\ncancel, terminate or modify any Material Contract.\n\n     SECTION 3.13    Environmental Matters.  The Company (a) is in compliance \n                     ---------------------       \nin all material respects with all applicable Environmental Laws, (b) holds all\nEnvironmental Permits material to the conduct of the Company's business and (c)\nis in compliance in all material respects with their respective Environmental\nPermits. The Company has not received any written request for information or\nbeen notified that it is a potentially responsible party under CERCLA or any\nsimilar Law of any state, locality or any other jurisdiction. The Company has\nnot entered into or agreed to any consent decree or order or is subject to any\njudgment, decree or judicial order relating to compliance with Environmental\nLaws, Environmental Permits or the investigation, sampling, monitoring,\ntreatment, remediation, removal or cleanup of Hazardous Materials, and to the\nknowledge of the Company, no investigation, litigation or other proceeding is\npending or threatened with respect thereto.\n\n     SECTION 3.14    Intellectual Property.\n                     ---------------------\n\n          (a)  Proprietary Rights.\n               ------------------ \n\n               (i)  Company is the sole owner of all right, title and interest \nin and to all the Company Owned Proprietary Rights (as defined in Section\n3.14(b) below) free and clear of all liens, encumbrances, claims, rights of use\nand restrictions whatsoever. Company has valid licenses or all other rights\nnecessary to use all Company Licensed Proprietary Rights (as defined in Section\n3.14 (b) below). Any of the Company Owned Proprietary Rights which require the\nexecution and filing with an appropriate governmental agency, including without\nlimitation the Patent and Trademark Office, have been so indicated in Section\n3.14(a)(i) of the Company Disclosure Schedule. Any of the Company Owned\nProprietary Rights owned at any time by any predecessor of Company or by any\nformer employer of any employee or officer of Company (collectively, \"Former\n                                                                      ------\nOwners\") have been assigned in full to Company by a presently valid and\n------\nenforceable instrument. There are no outstanding options, licenses or agreements\nof any kind relating to the Company Owned Proprietary Rights (other than for\ndistribution of standard object code products in the ordinary course of\nbusiness).\n\n              (ii) The Company Owned Proprietary Rights and, to the knowledge of\nthe Company, the Company Licensed Proprietary Rights, do not infringe upon or\nconflict with any Proprietary Rights of any other Person, firm, corporation or\nother entity. To the knowledge of the Company, there is not pending or\nthreatened any claim or litigation contesting the right of Company to engage in\nits business or employ any of the Company Owned Proprietary Rights or the\nCompany Licensed Proprietary Rights. No Former Owner owns or controls\nProprietary Rights that such Former Owner could exercise to prevent Company from\nexploiting the Company Owned Proprietary Rights that were assigned from such\nFormer Owner to Company. Company has taken reasonable security measures to\nprotect the secrecy, confidentiality, and value of all Company Owned Proprietary\nRights and of all Company Licensed Proprietary Rights, to the extent the Company\nis permitted to do so. Company has only disclosed Company Owned Proprietary\nRights to third parties subject to valid, binding and enforceable non-disclosure\nagreements that protect such disclosed Company Owned Proprietary Rights at least\nas much as Company protects Company Owned Proprietary Rights, and in no case\n\n\n                                      21\n\n \npermits less than reasonable protection. The Company has only disclosed Company\nLicensed Proprietary Rights to third parties to the extent it is permitted to do\nso.\n\n             (iii)  Any employee, consultant or other Person who, either alone \nor in concert with others, developed, invented, discovered, derived, programmed\nor designed any of the Company Owned Proprietary Rights or any part thereof, or\nwho has knowledge of or access to information relating to it, has been put on\nnotice that the Company Owned Proprietary Rights are proprietary to Company and\nnot to be divulged or misused, and has assigned or licensed all of his or her\nrights relating to the Company Owned Proprietary Rights to Company. Each current\nand former employee of the Company has executed and delivered an agreement in\nsubstantially the form of the Company's standard Employee Proprietary\nInformation and Invention Agreement. No employee of Company is in violation of\nany material term of any employment contract, confidentiality, proprietary\ninformation or inventions agreement, or any other contract or agreement relating\nto the relationship of any such employee with Company or any previous employer,\nand all such contracts or agreements with employees are in full force and effect\nand are valid, binding and enforceable in accordance with their respective\nprovisions. The employees of Company are not obligated under any contract\n(including licenses, covenants, or commitments of any nature) or other\nagreement, or subject to any judgment, decree or order of any court or\nadministrative agency that would conflict with their obligation to use their\nbest efforts to promote the interests of Company or that would conflict with the\nbusiness of Company as conducted.\n\n              (iv) There are no material contracts, commitments, leases, \npermits, and other instruments (written or oral) binding upon Company with\nrespect to the Company Owned Proprietary Rights or the Company Licensed\nProprietary Rights except the contracts listed on Section 3.14(a)(iv) of the\nCompany Disclosure Schedule and except for standard \"shrinkwrap\" or similar\nlicenses with respect to Company Licensed Proprietary Rights relating to\nproducts which are commercially available on an \"off the shelf\" or similar\nbasis. Company has delivered to Parent true and complete copies of all such\nitems and any amendments thereto. All of such contracts, commitments, leases,\npermits and instruments are in full force and effect and are valid, binding and\nenforceable in accordance with their respective provisions, and Company is not\nin material default nor has there occurred an event or condition which, with the\npassage of time or giving of notice (or both), would constitute a material\ndefault with respect to the payment or performance of any obligation thereunder;\nand no claim of such a material default has been asserted and there is no basis\nor alleged basis upon which such a claim could be made. Company has not received\nany notice or notices claiming any such material default or indicating the\ndesire or intention of any other party thereto to amend, modify, rescind or\nterminate the same.\n\n          (b) As used in this Agreement, \"Proprietary Rights\" shall mean all\n                                          ------------------                \nrights, title and interests in and to inventions (whether or not patentable),\nideas, formulae, software (in source and object code form), process engineering,\nart works, schematic drawings, processes, product plans, logos, trademarks,\ntrademark applications, service marks, copyrights, trade names, trade secrets,\nknow-how, technical information, patents, patent applications, databases,\nemployee lists and customer lists, and other intangible or proprietary rights of\nany form or nature throughout the world, and \"Company Owned Proprietary Rights\"\n                                              -------------------------------- \nshall mean all Proprietary Rights developed, invented, discovered, or conceived\nby any employee of the \n\n                                      22\n\n \nCompany necessary to conduct the business of Company as conducted and \"Company\n                                                                       -------\nLicensed Proprietary Rights\" shall mean all other\n---------------------------\nProprietary Rights necessary to conduct the business of the Company as\nconducted.\n\n     SECTION 3.15    Returns and Complaints.  The Company has received no \n                     ----------------------   \nmaterial customer complaints concerning its products and\/or services, nor has \nit had any of its products returned by a purchaser thereof, other than minor,\nnonrecurring warranty problems.\n\n     SECTION 3.16    Taxes.\n                     -----\n\n          (a)  (i)  All material Returns (as defined herein) required to be\nfiled with respect to the Company have been timely filed; (ii) all Taxes\nrequired to be shown on all such material Returns or otherwise due have been\ntimely paid; (iii) to the knowledge of the Company, all material Returns are\ntrue, correct and complete in all material respects; (iv) no adjustment relating\nto such material Returns has been proposed by any Tax authority, and to the\nknowledge of the Company, no basis exists for any material adjustment; (v) there\nare no pending actions or proceedings relating to such material Returns; nor, to\nthe knowledge of the Company, have any such actions or proceedings been\nthreatened in writing; (vi) no consent under Section 341(f) of the Code has been\nfiled with respect to the Company; (vii) there are no Tax liens on any assets of\nthe Company, except for liens for current Taxes not yet due and payable; (viii)\nneither the Company nor any affiliate is a party to any agreement or arrangement\nthat would result, separately or in the aggregate, in the actual or deemed\npayment by the Company of any \"excess parachute payments\" within the meaning of\nSection 280G of the Code (without regard to Section 280G(b)(4)); (ix) the\nCompany is not doing business in nor is it engaged in a trade or business in any\njurisdiction in which it has not filed any applicable income or franchise tax\nreturn required to be filed by applicable Law, except for jurisdictions in which\nthe penalties for failure to file are not material; and (x) no power of attorney\nis currently in force with respect to any matter relating to Taxes that could\naffect the Company.  The Company Interim Financial Statements (i) fully accrue\nall material liabilities for Taxes with respect to all periods through \nDecember 31, 2000, and (ii) properly accrue all material liabilities for Taxes \npayable after December 31, 2000, with respect to all transactions and events\noccurring on or prior to such date. No material Tax liability since December 31,\n2000 has been incurred by Company other than in the ordinary course of business\nand adequate provision has been made by the Company for all Taxes since that\ndate. Company has previously provided or made available to Parent true and\ncorrect copies of all income, franchise, and sales Tax Returns. All material\nelections with respect to Company's Taxes are reflected on the Company Tax\nReturns to the extent so required. Company has withheld and paid to the\napplicable financial institution or Tax authority all material Taxes required to\nbe withheld. Company has never been a member of an affiliated group of\ncorporations, within the meaning of Section 1504 of the Code. Company is not a\nparty to or bound by any Tax indemnity, Tax sharing or Tax allocation agreement\n(whether written or unwritten or arising under operation of federal law, under\noperation of state laws as a result of being a member of a unitary group, or\nunder comparable laws of other states or foreign jurisdictions). Company has not\ngranted any extension or waiver of the limitation period applicable to any Tax\nReturns that is still in effect. Company has never elected to be treated as an \nS-corporation under Section 1361 of the Code or any corresponding provision of\nfederal or state law. Company is not, and has not been, a United States real\nproperty holding corporation (as defined in Section 897(c)(2) of the Code)\nduring the applicable period specified in\n\n\n                                      23\n\n \nSection 897(c)(1)(A)(ii) of the Code. Other than by reason of the Merger,\nCompany has not been and will not be required to include any material adjustment\nin taxable income for any Tax period (or portion thereof) pursuant to Section\n481 or 263A of the Code or any comparable provision under state or foreign Tax\nlaws as a result of transactions, events or accounting methods employed prior to\nthe Merger.\n\n \n          (b)  As used in this Agreement, \"Taxes\" shall mean any and all taxes, \n                                           -----            \nfees, levies, duties, tariffs, imposts and other charges of any kind (together\nwith any and all interest, penalties, additions to tax and additional amounts\nimposed with respect thereto) imposed by any government or taxing authority,\nincluding, without limitation: taxes or other charges on or with respect to\nincome, franchises, windfall or other profits, gross receipts, property, sales,\nuse, capital stock, payroll, employment, social security, workers' compensation,\nunemployment compensation or net worth; taxes or other charges in the nature of\nexcise, withholding, ad valorem, stamp, transfer, value-added or gains taxes;\nlicense, registration or documentation fees; and customs duties, tariffs or\nsimilar charges. The term \"Returns\" shall mean all reports, estimates,\ndeclarations of estimated tax, information statements and returns relating to,\nor required to be filed in connection with, any Taxes, including information\nreturns or reports with respect to backup withholding and other payments to\nthird parties.\n\n                                      24\n\n \n     SECTION 3.17    Vote Required.  Other than as required under this \n                     -------------     \nAgreement, the only votes of the holders of any classes or series of capital\nstock of the Company necessary to approve and adopt this Agreement, the Merger\nand the other transactions contemplated by this Agreement are the affirmative\nvotes of the holders of the requisite number of Company Common Stock and Company\nPreferred Stock, voting as separate classes.\n\n     SECTION 3.18    Assets.  Except as set forth in Section 3.18 of the Company\n                     ------ \nDisclosure Schedule, the Company owns, leases or has the legal right to use all\nof the properties and assets, including, without limitation, real property and\npersonal property (other than Intellectual Property, which is covered by Section\n3.14 hereof), used or intended to be used in the conduct of the business of the\nCompany or otherwise owned, leased or used by the Company (all such properties\nand assets being the \"Assets\").  Except as set forth in Section 3.18 of the\nCompany Disclosure Schedule, the Company has good and marketable title to, or in\nthe case of leased or subleased Assets, valid and subsisting leasehold interests\nin, all the Assets, free and clear of all liens, pledges or encumbrances except\nfor (x) liens for current taxes not yet due and payable and (y) liens that have\narisen in the ordinary course of business and that do not (in any case or in the\naggregate) materially detract from the value of the assets subject thereto or\nmaterially impair the operations of the Company.  The equipment used in the\noperations of the business of the Company is, taken as a whole, in good\noperating condition and repair in all material respects, ordinary wear and tear\nexcepted.\n\n     SECTION 3.19    Owned Real Property.  The Company does not own any real\n                     -------------------        \nproperty.\n\n     SECTION 3.20    Certain Interests.\n                     -----------------                    \n\n          (a)  No shareholders owning more than 5% of the Company, any affiliate\nof any such shareholder, any officer or director of the Company, or to the\nknowledge of the Company, any immediate relative or spouse (or immediate\nrelative of such spouse) who resides with, or is a dependent of, any such\nofficer or director:\n\n               (i)   has any direct or indirect financial interest in any\ncreditor, competitor, supplier, manufacturer, agent, representative, distributor\nor customer of the Company; provided, however, that the ownership of securities\n                            --------  -------                                  \nrepresenting no more than 1% of the outstanding voting power of any creditor,\ncompetitor, supplier, manufacturer, agent, representative, distributor or\ncustomer, and which securities are listed on any national securities exchange or\nactively traded in the national over-the-counter market, shall not be deemed to\nbe a \"financial interest\" as long as the Person owning such securities has no\nother connection or relationship with such competitor, supplier or customer,\nmanufacturer, agent, representative, distributor or customer of the Company;\n\n               (ii)  owns, directly or indirectly, in whole or in part, or has\nany other interest in any tangible or intangible property that the Company uses\nin the conduct of its business (except for any such ownership or interest\nresulting from the ownership of securities in a public company);\n\n               (iii) has any claim or cause of action against the Company; or\n\n\n                                      25\n\n \n               (iv) except as set forth in Section 3.20(a)(iv) of the Company\nDisclosure Schedule, has outstanding any indebtedness to the Company.\n\n          (b)  Except as set forth in Section 3.20(b) of the Company Disclosure\nSchedule, except for the payment of employee compensation in the ordinary course\nof business, the Company has no liability or any other obligation of any nature\nto any shareholder of the Company or any affiliate thereof or to any officer or\ndirector of the Company, or to the knowledge of the Company, to any immediate\nrelative or spouse (or immediate relative of such spouse) of any such officer or\ndirector.\n\n     SECTION 3.21   Insurance Policies.  Section 3.21 of the Company Disclosure\n                    ------------------                                         \nSchedule sets forth a true and complete list of all insurance policies held by\nthe Company and any claims thereunder involving amounts in excess of $25,000.\nTrue and complete copies of all such policies have been provided or made\navailable by the Company to Parent.  All premiums due under such policies as of\nthe date hereof have been paid.  The Company has not failed to give any notice\nor present any claim under any such policy in a timely fashion.  Such insurance\nto the date hereof has (i) been maintained in full force and effect and (ii) not\nbeen canceled or changed, except to extend the maturity dates thereof.  The\nCompany has not received any notice or other communication regarding any actual\nor possible (a) cancellation or termination of any insurance policy (other than\nupon the expiration of the term of such policies), (b) refusal of any coverage\nor rejection of any claim under any insurance policy, or (c) material adjustment\nin the amount of the premiums payable with respect to any insurance policy\n(other than as a result of the growth of the Company's business).\n\n     SECTION 3.22   Brokers. No broker, finder or investment banker is entitled \n                    ------- \nto any brokerage, finder's or other fee or commission from the Company in\nconnection with the origination, negotiation or execution of this Agreement, the\nMerger, the transactions contemplated by this Agreement, or in connection with\nany financing transaction. The Company has heretofore furnished to Parent a\ncomplete and correct copy of all agreements pursuant to which any such firm\nwould be entitled to any payment in connection with this Agreement, the Merger\nor the transactions contemplated by this complete Agreement. The Company's\nshareholders are responsible for any such fees payable by the Company as a\nresult of any such agreement to which the Company is a party prior to the\nClosing.\n\n     SECTION 3.23   Customers and Suppliers.  Section 3.23 of the Company \n                    -----------------------        \nDisclosure Schedule contains a complete list of all customers which individually\naccounted for more than 2% of the Company's consolidated gross revenues during\nthe fiscal year ended December 31, 2000, and no material supplier of the Company\nhas cancelled or otherwise terminated any contract with the Company prior to the\nexpiration of the contract term, or, to the Company's knowledge, made any\nwritten threat to the Company to cancel, reduce the supply or otherwise\nterminate its relationship with the Company. The Company has not (i) breached\n(so as to provide a benefit to the Company that was not intended by the parties)\nany agreement with or (ii) engaged in any fraudulent conduct with respect to,\nany customer or supplier of the Company.\n\n     SECTION 3.24   Accounts Receivable; Bank Accounts. All accounts receivable \n                    ----------------------------------          \nof the Company reflected on the Reference Balance Sheet are valid receivables\nsubject to no setoffs or counterclaims and are current and collectible (within\n30 days after the date on which it\n\n                                      26\n\n \nfirst became due and payable), net of the applicable reserve for bad debts on\nthe Reference Balance Sheet. All accounts receivable reflected in the financial\nor accounting records of the Company that have arisen since the date of\nReference Balance Sheet are valid receivables subject to no setoffs or\ncounterclaims and are collectible (within 30 days after the date on which it\nfirst became due and payable), net of a reserve for bad debts in an amount\nproportionate to the reserve shown on the Reference Balance Sheet. To avoid any\nambiguity, the term \"collectible\" as used in this Section does not mean that the\nreceivable will actually be collected. Section 3.24 of the Company Disclosure\nSchedule describes each account maintained by or for the benefit of the Company\nat any bank or other financial institution.\n\n     SECTION 3.25   Powers of Attorney.  There are no outstanding powers of \n                    ------------------         \nattorney executed on behalf of the Company.\n\n     SECTION 3.26   Offers.  The Company had suspended or terminated, and had \n                    ------ \nthe legal right to terminate or suspend, all negotiations and discussions of any\nacquisition, merger, consolidation or sale of all or substantially all of the\nassets of Company with parties other than Parent.\n\n     SECTION 3.27   Warranties.  Except as set forth in Section 3.27 of the \n                    ---------- \nCompany Disclosure Schedule, no product or service manufactured, sold, leased,\nlicensed or delivered by the Company is subject to any guaranty, warranty, right\nof return, right of credit or other indemnity other than manufacturers'\nwarranties for which the Company has no liability. Section 3.27 of the Company\nDisclosure Schedule sets forth the aggregate expenses incurred by the Company in\nfulfilling their obligations under any guaranty, warranty, right of return or\nindemnity provisions during each of the fiscal years and the interim period\ncovered by the Audited Financial Statements and the Interim Financial Statements\nand the Company knows of no reason why such expenses should significantly\nincrease as a percentage of sales in the future.\n\n     SECTION 3.28   Books and Records. The minute books and other similar \n                    -----------------         \nrecords of the Company contain complete and accurate records in all material\nrespects of all actions taken at any meetings of the Company's shareholders,\nBoard of Directors of any committee thereof, and all written consents executed\nin lieu of any such meeting. The books and records of the Company accurately\nreflect the assets, liabilities, business, financial condition and results of\noperations of the Company and have been maintained in accordance with good\nbusiness and bookkeeping practices.\n\n     SECTION 3.29   Tax Matters.  To the knowledge of the Company, the Company \n                    ----------- \nhas not taken or agreed to take any action that would prevent the Merger from\nconstituting a reorganization qualifying under Section 368(a) of the Code.  The\nCompany is not aware of any agreement, plan or other circumstance that would\nprevent the Merger from qualifying as a reorganization under Section 368(a) of\nthe Code.\n\n     SECTION 3.30   No Misstatements.  No representation or warranty made by the\n                    ----------------   \nCompany in this Agreement, the Company Disclosure Schedule or any certificate\ndelivered or deliverable pursuant to the terms hereof, contains or will contain,\nany untrue statement of a material fact, or omits, or will omit, when taken as a\nwhole, any material fact, necessary in order \n\n                                      27\n\n \nto make the statements made, in light of the circumstances under which they were\nmade, not misleading.\n\n                                  ARTICLE IV\n\n            REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB\n            -------------------------------------------------------\n\n          Except as set forth in (i) the disclosure schedule delivered by Parent\nand Merger Sub to the Company concurrently with the execution of this Agreement\n(the \"Parent Disclosure Schedule\"), which provides an exception to or otherwise\n      --------------------------                                               \nqualifies in reasonable detail with specific section or subsection references,\nthe representations or warranties of Parent and Merger Sub specifically referred\nto therein, or (ii) in Parent SEC Reports (as defined in Section 4.05(a), Parent\nand Merger Sub hereby jointly and severally represent and warrant to the Company\nthat:\n\n     SECTION 4.01   Organization and Qualification.\n                    ------------------------------ \n\n          (a)  Parent is a corporation duly incorporated, validly existing and\nin good standing under the laws of California.\n\n          (b)  Merger Sub is a corporation duly incorporated, validly existing\nand in good standing under the laws of the State of California.\n\n          (c)  Each of Parent and Merger Sub has all requisite corporate power\nand authority to own, lease and operate its properties and to carry on its\nbusiness as it is now being conducted, except where the failure to be so\norganized, existing or in good standing or to have such corporate power and\nauthority have not had, and could not reasonably be expected to have,\nindividually or in the aggregate, a Parent Material Adverse Effect (as defined\nin Section 4.04(b)). The Parent is duly qualified or licensed as a foreign\ncorporation to do business, and is in good standing, in each jurisdiction where\nthe character of the properties owned, leased or operated by it or the nature of\nits business makes such qualification or licensing necessary, except for such\nfailures to be so qualified or licensed and in good standing that have not had,\nand could not reasonably be expected to have, individually or in the aggregate,\na Parent Material Adverse Effect.\n\n     SECTION 4.02   Authority Relative to This Agreement.  Each of Parent and \n                    ------------------------------------     \nMerger Sub has all necessary corporate power and authority to execute and\ndeliver this Agreement, and to perform its obligations hereunder and to\nconsummate the Merger and the other transactions contemplated by this Agreement.\nThe execution and delivery of this Agreement by each of Parent and Merger Sub\nand the consummation by each of Parent and Merger Sub of the Merger and the\nother transactions contemplated by this Agreement have been duly and validly\nauthorized by all necessary corporate action and no other corporate proceedings\non the part of Parent or Merger Sub are necessary to authorize this Agreement or\nto consummate the Merger and the other transactions contemplated by this\nAgreement (other than with respect to the Merger, the filing and recordation of\nappropriate merger documents as required by the CGCL). This Agreement has been\nduly and validly executed and delivered by each of Parent and Merger Sub, and\nassuming the due authorization, execution and delivery by the Company,\n\n                                      28\n\n \nconstitutes a legal, valid and binding obligation of each of Parent and Merger\nSub, enforceable against each of Parent and Merger Sub in accordance with its\nterms, subject to any applicable bankruptcy, reorganization, insolvency,\nmoratorium or similar Laws affecting creditors' rights generally and subject, as\nto enforceability, to general principles of equity.\n\n     SECTION 4.03   Board Approval.  The Board of Directors of Parent, by \n                    --------------    \nunanimous written consent or at a meeting duly called and held, has (i)\ndetermined that the Merger is fair and in the best interest of Parent and its\nshareholders and (ii) approved the Merger and this Agreement in accordance with\nthe provisions of the CGCL.\n\n     SECTION 4.04   No Conflict; Required Filings and Consents.\n                    ------------------------------------------  \n\n          (a)  The execution and delivery of this Agreement by each of Parent\nand Merger Sub does not, and the performance of this Agreement by each of Parent\nand Merger Sub will not, (i) conflict with or violate their respective\norganizational documents, (ii) assuming that all consents, approvals,\nauthorizations and other actions described in Section 4.04(b) have been obtained\nand all filings and obligations described in Section 4.04(b) have been made,\nconflict with or violate in any material respect any Law applicable to Parent or\nMerger Sub or by which any property or asset of Parent or Merger Sub is bound or\naffected, or (iii) result in any breach of or constitute a default (or an event\nwhich with notice or lapse of time or both would become a default) under, or\ngive to others any right of termination, amendment, acceleration or cancellation\nof, or result in the creation of a lien or other encumbrance on any property or\nasset of Parent or Merger Sub pursuant to, any material note, bond, mortgage,\nindenture, contract, agreement, lease, license, permit, franchise or other\ninstrument or obligation, except, with respect to clause (iii), for any such\nconflicts, violations, breaches, defaults, or other occurrences that could not\nreasonably be expected, individually or in the aggregate, to prevent or\nmaterially delay the consummation of the transactions contemplated by this\nAgreement.\n\n          (b)  The execution and delivery of this Agreement by each of Parent\nand Merger Sub does not, and the performance of this Agreement by each of Parent\nand Merger Sub will not, require any consent, approval, authorization or permit\nof, or filing with or notification to, any Governmental Entity, except (i) for\nthe filing and recordation of appropriate merger documents as required by the\nCGCL, (ii) any filings as may be required under applicable federal and state\nsecurities laws, and (iii) where the failure to obtain such consents, approvals,\nauthorizations or permits, or to make such filings or notifications, could not\nreasonably be expected, individually or in the aggregate, to prevent or\nmaterially delay the consummation of the transactions contemplated by this\nAgreement.\n\n     SECTION 4.05   SEC Filings; Financial Statements.\n                    --------------------------------- \n\n          (a)  Parent has filed all forms, reports and documents required to be\nfiled by it with the Securities and Exchange Commission (the \"SEC\") since\n                                                              ---\nNovember 1999 through the date of this Agreement (collectively, the \"Parent SEC\n                                                                     ----------\nReports\").  As of the respective dates they were filed, (i) the Parent SEC\n-------                                                                   \nReports were prepared, and all forms, reports and documents filed with the SEC\nafter the date of this Agreement and prior to the Effective Time will be\nprepared, in all material respects in accordance with the requirements of the\nSecurities Act or the Securities Exchange Act of 1934, as amended (together with\nthe rules and\n\n                                      29\n\n \nregulations promulgated thereunder, the \"Exchange Act\"), as the case may be, and\n                                         ------------\n(ii) the Parent SEC Reports, when read together, do not contain any untrue\nstatement of a material fact or omit to state a material fact required to be\nstated therein or necessary in order to make the statements made therein, in the\nlight of the circumstances under which they were made, not misleading.\n\n          (b)  Each of the consolidated financial statements (including, in each\ncase, any notes thereto) contained in the Parent SEC Reports and in any form,\nreport or document filed after the date of this Agreement and prior to the\nEffective Time was, or will be, as the case may be, prepared in accordance with\nU.S. GAAP accounting standards applied on a consistent basis throughout the\nperiods indicated (except as may be indicated in the notes thereto or, in the\ncase of unaudited statements, as permitted by Form 8-K of the SEC) and each\npresented or will present fairly, in all material respects, the consolidated\nfinancial position of Parent and its consolidated subsidiaries as of the\nrespective dates thereof and for the respective periods indicated therein,\nexcept as otherwise noted therein (subject, in the case of unaudited statements,\nto normal and recurring year-end adjustments which were not and are not\nexpected, individually or in the aggregate, to have a Parent Material Adverse\nEffect). The term \"Parent Material Adverse Effect\" means any change in or effect\n                   ------------------------------  \non the business of Parent and its subsidiaries that is materially adverse to the\nbusiness, operations, financial condition or results of operations of Parent and\nits subsidiaries taken as a whole, provided, however, that in no event shall\n                                   --------  -------            \n(A) a decrease in Parent's stock price or the failure to meet or exceed Wall\nStreet research analysts' or Parent's internal earnings or other estimates or\nprojections in and of itself constitute a Material Adverse Effect or (B) any\nchange, event, violation, inaccuracy, circumstance or effect that such entity\nsuccessfully bears the burden of proving results from (x) changes affecting the\nindustry in which such entity operates generally (which changes do not\ndisproportionately affect Parent) or (y) changes affecting the United States\neconomy generally, constitute a Material Adverse Effect.\n\n     SECTION 4.06   Interim Operations of Merger Sub.  Merger Sub was formed by\n                    --------------------------------                           \nParent solely for the purpose of engaging in the transactions contemplated by\nthis Agreement, has engaged in no other business activities and has conducted\nits operations only as contemplated by this Agreement.  Merger Sub has no\nliabilities, and except for a subscription agreement pursuant to which all of\nits authorized capital stock was issued to Parent, is not a party to any\nagreement other than this Agreement and agreements with respect to the\nappointment of registered agents and similar matters.\n\n     SECTION 4.07   Valid Issuance of Shares of Parent Common Stock.  Assuming \n                    -----------------------------------------------  \nthe accuracy of the representations contained in the Shareholder Certificates\ndelivered by each of the Company Shareholders, the shares of Parent to be issued\npursuant to this Agreement will, when issued, be duly authorized, validly\nissued, fully paid and non-assessable, will be issued in compliance with all\napplicable United States federal and state securities laws, will not be subject\nto any preemptive or other statutory right of shareholders, and will be free of\nany liens or encumbrances other than those expressly set forth in this Agreement\nor any other agreement entered into in connection with the Merger.\n\n     SECTION 4.08   Brokers.  No broker, finder or investment banker is \n                    ------- \nentitled to receive from Parent any brokerage, finder's or other fee or\ncommission in connection with the origination, negotiation or execution of this\nAgreement, the Merger, the transactions\n\n                                      30\n\n \ncontemplated by this Agreement. Parent has heretofore furnished to the Company a\ncomplete and correct copy of all agreements pursuant to which any such firm\nwould be entitled to any payment in connection with this Agreement, the Merger\nor the transactions contemplated by this Agreement.\n\n     SECTION 4.09   Absence of Changes.  Since [February 26, 2001], there has \n                    ------------------        \nbeen no event the occurrence of which would give rise to a duty on the part of\nParent to file a Form 8-K.\n\n     SECTION 4.10   No Parent Shareholder Vote.  Neither the Merger nor the\n                    --------------------------       \ntransactions contemplated by this Agreement shall trigger any requirement for a\nvote of Parent's shareholders.\n\n     SECTION 4.11   Tax Matters.  To the knowledge of Parent, neither Parent \n                    ------------ \nnor any of its subsidiaries has taken or agreed to take any action that would\nprevent the Merger from constituting a reorganization qualifying under Section\n368(a) of the Code. Parent is not aware of any agreement, plan or other\ncircumstance that would prevent the Merger from qualifying as a reorganization\nunder Section 368(a) of the Code.\n\n                                   ARTICLE V\n\n                   CONDUCT OF BUSINESSES PENDING THE MERGER\n                   ----------------------------------------\n\n     SECTION 5.01   Conduct of Business by the Company and the Subsidiaries \n                    -------------------------------------------------------\nPending the Merger.  During the period from the date of this Agreement and \n------------------                    \ncontinuing until the earlier of the termination of this Agreement or the\nEffective Time, the Company agrees, and shall cause each Subsidiary, (except to\nthe extent that Parent shall otherwise consent in writing), to carry on its\nbusiness in the usual, regular and ordinary course in substantially the same\nmanner as previously conducted, to pay its debts and taxes when due (subject to\ngood faith disputes over such debts or taxes), to pay or perform other\nobligations when due, and to the extent consistent with such business, use all\nreasonable efforts consistent with past practices and policies to preserve\nintact its present business organization, to keep available the services of its\npresent officers and key employees and consultants and to preserve its\nrelationships with customers, suppliers, distributors, licensors, licensees, and\nothers having business dealings with it, to the end that its goodwill and\nongoing businesses would be unimpaired at the Effective Time. The Company shall\npromptly notify Parent of any event or occurrence not in the ordinary course of\nbusiness of the Company.\n\n          By way of amplification and not limitation, except as contemplated by\nthis Agreement or as set forth in Section 5.01 of the Company Disclosure\nSchedule, neither the Company nor any Subsidiary shall, between the date of this\nAgreement and the Effective Time, directly or indirectly, do or propose to do,\nany of the following without the prior written consent of Parent, which consent\nshall not be unreasonably withheld:\n\n          (a)  amend or otherwise change its Articles of Incorporation or Bylaws\nor equivalent organizational documents;\n\n                                      31\n\n \n          (b)  issue, sell, pledge, dispose of, grant, encumber, authorize or\npropose the issuance, sale, pledge, disposition, grant or encumbrance of any\nshares of its capital stock of any class, or any options, warrants, convertible\nsecurities or other rights of any kind to acquire any shares of such capital\nstock, or any other ownership interest (including, without limitation, any\nphantom interest) of the Company or any Subsidiary, except pursuant to the terms\nof options, warrants or preferred stock outstanding on the date of this\nAgreement;\n\n          (c)  sell, lease, license, pledge, grant, encumber or otherwise\ndispose of any of its properties or assets which are material, individually or\nin the aggregate, to its business, except in the ordinary course of business;\n\n          (d)  declare, set aside, make or pay any dividend or other\ndistribution payable in cash, stock, property or otherwise, with respect to any\nof its capital stock;\n\n          (e)  split, combine, subdivide, redeem or reclassify any of its\ncapital stock or issue or authorize the issuance of any other securities in\nrespect of, in lieu of or in substitution for shares of capital stock of such\nparty, or purchase or otherwise acquire, directly or indirectly, any shares of\nits capital stock except from former employees, directors and consultants in\naccordance with agreements providing for the repurchase of shares in connection\nwith any termination of service by such party;\n\n          (f)  acquire (including, without limitation, by merger, consolidation\nor acquisition of stock or assets) any interest in any corporation, partnership,\nother business organization or any division thereof or any assets thereof;\n\n          (g)  institute or settle any Legal Proceeding;\n\n          (h)  incur any indebtedness for borrowed money or issue any debt\nsecurities or assume, guarantee or endorse, or otherwise as an accommodation\nbecome responsible for, the obligations of any Person, or make any loans or\nadvances;\n\n          (i)  authorize any capital expenditure in excess of $25,000,\nindividually or in the aggregate;\n\n          (j)  enter into any lease or contract for the purchase or sale of any\nproperty, real or, for purchases in excess of $25,000 individually or in the\naggregate, personal;\n\n          (k)  waive or release any material right or claim;\n\n          (l)  increase the compensation payable or to become payable to its\nofficers or employees, or grant any severance or termination pay to, or enter\ninto any employment or severance agreement with, any director, officer or\nemployee, or establish, adopt, enter into or amend any collective bargaining,\nbonus, profit sharing, thrift, compensation, stock option, restricted stock,\npension, retirement, deferred compensation, employment, termination, severance\nor other plan, agreement, trust, fund, policy or arrangement for the benefit of\nany director, officer or employee;\n\n                                      32\n\n \n          (m)  accelerate, amend or change the period of exercisability or the \nvesting schedule of restricted stock or options granted under any employee stock\nplan or agreement or authorize cash payments in exchange for any options granted\nunder any of such plan or agreement except as specifically required by the terms\nof such plans or agreements in effect as of the date of this Agreement and\nexcept for the waiver of acceleration of Company Options;\n\n          (n)  extend any offers for the provision of services to potential \nemployees, consultants or independent contractors other than offers of\nemployment to potential employees lower than director-level that are \"at will\"\nand do not provide for severance obligations; \n\n          (o)  amend or terminate any Material Contract;\n\n          (p)  enter into, amend or, except as contemplated by this Agreement, \nterminate any contract, agreement, commitment or arrangement that, if fully\nperformed, would not be permitted under this Section 5.01;\n\n          (q)  other than in the ordinary course of business consistent with \npast practice, enter into any licensing, distribution, OEM, sponsorship,\nadvertising, merchant program contracts, agreements or obligations, or other\nsimilar contracts, agreements, or obligations, which may not be cancelled by the\nCompany upon notice of 30 days or less without penalties;\n\n          (r)  enter into any contract or agreement material to the business, \nresults of operations or financial condition of the Company;\n\n          (s)  take any action, other than reasonable and usual action in the \nordinary course of business and consistent with past practice, with respect to\naccounting policies, principles or procedures;\n\n          (t)  make or change any material Tax or accounting election, change \nany annual accounting period, adopt or change any accounting method, file any\namended Return, enter into any closing agreement, settle any material Tax claim\nor assessment relating to the Company or any Subsidiary, surrender any material\nright to claim a refund of Taxes, or consent to any extension or waiver of the\nlimitation period applicable to any material Tax claim or assessment relating to\nthe Company or any Subsidiary;\n\n          (u)  (i) sell, assign, lease, terminate, abandon, transfer, permit to \nbe encumbered, otherwise dispose of or grant any security interest in any item\nof Owned Intellectual Property or Licensed Intellectual Property, in whole or in\npart, (ii) grant any license with respect to any Owned Intellectual Property,\nother than the license of Company Software to customers of the Company or any\nSubsidiary to whom the Company or any Subsidiary licenses such Company Software\nin the ordinary course of business, (iii) develop, create or invent any\nIntellectual Property jointly with any third party, or (iv) disclose, or allow\nto be disclosed, any confidential Owned Intellectual Property, unless such Owned\nIntellectual Property is subject to a confidentiality or non-disclosure covenant\nprotecting against disclosure thereof;\n\n                                      33\n\n \n          (v)  make (or become obligated to make) any bonus payments to any of \nits officers or employees;\n\n          (w)  revalue any of its assets, including writing down the value of \ninventory or writing off notes or accounts receivable;\n\n          (x)  fail to maintain its equipment and other assets in good working \ncondition and repair according to the standards it has maintained up to the date\nof this Agreement, subject only to ordinary wear and tear;\n\n          (y)  take any action or fail to take any action that would cause \nthere to be a Company Material Adverse Effect;\n\n          (z)  permit any insurance policy naming it as a beneficiary or a loss \npayable payee to be cancelled or terminated without notice to Parent and Merger\nSub;\n\n          (aa) write off as uncollectible, or establish any extraordinary \nreserve with respect to, any account receivable or other indebtedness in excess\nof $10,000 with respect to a single matter, or in excess of $25,000 in the\naggregate; or\n\n          (bb) take, or agree in writing or otherwise to take, any of the \nactions described in Sections (a) through (aa) above, or any action which is\nreasonably likely to make any of the Company's representations or warranties\ncontained in this Agreement untrue or incorrect on the date made (to the extent\nso limited) or as of the Effective Time.\n\n     SECTION 5.02    Notification of Certain Matters.  Parent shall give prompt\n                     -------------------------------\nnotice to the Company, and the Company shall give prompt notice to Parent, of\n(a) the occurrence, or non-occurrence, of any event the occurrence, or non-\noccurrence, of which would be likely to cause (i) any representation or warranty\ncontained in this Agreement to be untrue or inaccurate or (ii) any covenant,\ncondition or agreement contained in this Agreement not to be complied with or\nsatisfied and (b) any failure of Parent or the Company, as the case may be, to\ncomply with or satisfy any covenant, condition or agreement to be complied with\nor satisfied by it hereunder; provided, however, that the delivery of any notice\npursuant to this Section 5.02 shall not limit or otherwise affect the remedies\navailable hereunder to the party receiving such notice.\n\n                                  ARTICLE VI\n\n                             ADDITIONAL AGREEMENTS\n                             ---------------------\n\n     SECTION 6.01    Company Shareholder Approval. The Company shall promptly, \n                     ----------------------------  \nafter the date of this Agreement and in accordance with applicable Law, the\nCompany's Articles of Incorporation and Bylaws, convene a meeting of its\nshareholders or solicit written consents to obtain their approval and adoption\nof this Agreement, the Merger and the transactions contemplated by this\nAgreement. The Company shall ensure that the shareholders' meeting is called,\nnoticed, convened, held and conducted, and that all proxies solicited by the\nCompany in connection with the shareholders' meeting are solicited, or in the\nalternative, that written consents are solicited, in compliance with applicable\nLaw, the Company's Articles of Incorporation and Bylaws, and all other\napplicable legal requirements. The Company agrees to\n\n\n                                      34\n\n \nuse it best efforts to take all action necessary or advisable to secure the\nnecessary votes required by applicable Law, the Company's Articles of\nIncorporation and Bylaws to effect the Merger. The Board of Directors of the\nCompany shall recommend that the Company Shareholders vote in favor of and adopt\nand approve this Agreement and vote in favor of and approve the Merger and the\nother transactions contemplated hereby. Except as may be required by the CGCL or\napplicable case law with respect to fiduciary duties, neither the Board of\nDirectors of the Company nor any committee thereof shall withdraw, amend or\nmodify, or propose or resolve to withdraw, amend or modify in a manner adverse\nto Parent, the recommendation of the Board of Directors of the Company that the\nCompany Shareholders vote in favor of and adopt and approve this Agreement, the\nMerger and the other transactions contemplated hereby.\n\n          (b)  Each of the parties hereto acknowledge that the shares of Parent \nCommon Stock issued to the Company Shareholders pursuant to this Agreement are\nintended to be issued pursuant to the \"private placement\" exemption from\nregistration under Rule 506 of the Securities Act, and agree to reasonably\ncooperate with Parent in its efforts to ensure that the shares of Parent Common\nStock may be issued pursuant to such private placement exemption; provided,\n                                                                  --------  \nhowever, that no party hereto makes any representation or warranty that such \n-------                                                  \nissuance in fact qualifies for such private placement exemption.\n\n          (c)  Notwithstanding the foregoing and anything to the contrary in \nSection 7.02 hereof, in the event that prior to the solicitation of votes or\nconsents from Company's Shareholders to approve the Merger, Parent, based on\nadvice of its counsel, has determined that the shares of Parent Common Stock to\nbe issued pursuant to this Agreement cannot be issued under the \"private\nplacement\" exemption from registration under Rule 506 of the Securities Act or a\nsimilarly advantageous \"private placement\" exemption, then at Parent's election\n(i) the parties hereto shall take all action necessary to promptly prepare and\nfile (A) all necessary applications and documents required to be filed with the\nCalifornia Department of Corporations to qualify the issuance of the shares of\nParent Common Stock pursuant to this Agreement under the \"fairness hearing\"\nexemption from registration under Section 3(a)(10) of the Securities Act or (B)\na registration statement on Form S-4 with the SEC which registers the shares of\nParent Common Stock to be issued to the Company Shareholders pursuant to this\nAgreement and (ii) the dates in Section 8.01(b) hereof shall be appropriately\nadjusted, but in no event be later than April 30, 2001 without the written\nconsent of the Shareholders' Representative. Parent and the Company shall use,\nand shall cause their officers, employees, agents, advisors or other\nrepresentatives to use, their respective reasonable best efforts to effectuate\nthe foregoing (and fully cooperate with the other parties), including, without\nlimitation, preparing and filing all necessary applications, documents and forms\nto obtain a \"fairness hearing\" exemption from registration under Section\n3(a)(10) of the Securities Act or to register the Shares of Parent Common Stock\non an effective registration statement on Form S-4.\n\n     SECTION 6.02    Information Statement.  Commencing on the date of this\n                     ---------------------   \nAgreement, the Company and Parent shall jointly prepare an information statement\nthat is intended to comply with the disclosure requirements of Rule 502 of the\nSecurities Act (together with any amendments thereof or supplements thereto, the\n\"Information Statement\"). The Information Statement shall include the\nrecommendation of the Board of Directors of the Company to the Company\nShareholders to vote in favor of the approval and adoption of this Agreement and\nthe Merger. As promptly as practicable after the date hereof, but in no event\n\n\n                                      35\n\n \nlater than the business day following the date hereof, the Company will send to\neach Company Shareholder the Information Statement for the purpose of the\nconsidering, approving and adopting this Agreement, the Merger, and the other\ntransactions contemplated hereby. None of the information included in the\nInformation Statement and any other document prepared to comply with federal or\nstate securities laws shall, at the time it is first mailed to the Company\nShareholders or at the Effective Time, contain any untrue statement of a\nmaterial fact or omit to state any material fact required to be stated therein\nor necessary in order to make the statements therein, in the light of the\ncircumstances under which they were made, not misleading; provided, that the\nCompany and Parent shall each be solely liable for portions of the Information\nStatement solely relating to Company and Parent, respectively. No amendment or\nsupplement to the Information Statement will be made by the Company without the\napproval of Parent, which shall not be unreasonably withheld.\n\n     SECTION 6.03    Access to Information; Confidentiality.\n                     --------------------------------------\n\n          (a)  From the date of this Agreement to the Effective Time, the \nCompany shall: (i) provide to Parent (and its officers, directors, employees,\naccountants, consultants, legal counsel, agents and other representatives\n(collectively, \"Representatives\")) access at reasonable times upon prior notice,\n                ---------------    \naccess to the directors, officers, employees, agents, properties, offices and\nother facilities of the Company and the Subsidiaries and to the books and\nrecords thereof and (ii) furnish promptly such information concerning the\nbusiness, properties, contracts, assets, liabilities, personnel and other\naspects of the Company and the Subsidiaries as Parent or its Representatives may\nreasonably request.\n\n          (b)  The parties shall comply with, and shall cause their respective\nRepresentatives to comply with, all of their respective obligations under the\nNon-Disclosure Agreement dated June 12, 2000, (the \"Non-Disclosure Agreement\") \n                                                    ------------------------\nbetween the Company and Parent.     \n \n     SECTION 6.04    No Solicitation of Transactions.\n                     ------------------------------- \n\n          (a)  The Company will not, directly or indirectly, and will instruct \nits officers, directors, employees, agents, advisors or other representatives\n(including, without limitation, any investment banker, attorney or accountant\nretained by it), not to, directly or indirectly, solicit, initiate or encourage\n(including by way of furnishing nonpublic information), or take any other action\nto facilitate, any inquiries or the making of any proposal or offer (including,\nwithout limitation, any proposal or offer to its shareholders) that constitutes,\nor may reasonably be expected to lead to, any Competing Transaction (as defined\nbelow), or enter into or maintain or continue discussions or negotiate with any\nperson in furtherance of such inquiries or to obtain a Competing Transaction, or\nagree to or endorse any Competing Transaction, or authorize or permit any of the\nofficers, directors or employees of the Company, or any investment banker,\nfinancial advisor, attorney, accountant or other representative retained by the\nCompany, to take any such action. The Company will notify Parent immediately\nafter receipt by the Company (or any of its officers, directors, employees,\nagents, advisors or other representatives) of any proposal for, or inquiry\nrespecting, any Competing Transaction, or any request for nonpublic information\nin connection with such proposal or inquiry or for access to the properties,\nbooks or records of the Company by any person that informs or has informed the\n\n\n                                      36\n\n \nCompany that it is considering making or has made such a proposal or inquiry.\nSuch notice to Parent shall indicate in reasonable detail the identity of the\nperson making such proposal or inquiry and the terms and conditions of such\nproposal or inquiry. The Company immediately shall cease and cause to be\nterminated all existing discussions or negotiations with any parties conducted\nheretofore with respect to a Competing Transaction. The Company agrees not to\nrelease any third party from, or waive any provision of, any confidentiality or\nstandstill agreement to which it is a party.\n\n          (b)  A \"Competing Transaction\" means any of the following involving \n                  ---------------------  \nthe Company or any Subsidiary (other than the Merger and the other transactions\ncontemplated by this Agreement): (i) a merger, consolidation, share exchange,\nbusiness combination or other similar transaction; (ii) any sale, lease,\nexchange, transfer or other disposition of a material portion of the assets of\nsuch party; (iii) a tender offer or exchange offer for 15% or more of the\noutstanding voting securities of such party; or (iv) any solicitation in\nopposition to approval by the Company Shareholders of this Agreement and the\nMerger.\n\n     SECTION 6.05    Employee Benefits Matters.\n                     ------------------------- \n\n          (a)  All Company employees shall continue on their existing benefit \nplans until such time as, in Parent's sole discretion, an orderly transition can\nbe accomplished to employee benefit plans and programs maintained by Parent for\nits and its affiliates' employees in the United States. Parent shall provide the\nCompany's employees with health, welfare and other employee benefits that in the\naggregate are substantially equivalent to those provided to Parent's employees\nin similar functions and positions. Pending such action, Parent shall maintain\nthe effectiveness of the Company's benefit plans.\n\n          (b)  Simultaneously with the execution of this Agreement, Parent has \nentered into employment agreements in substantially the form attached hereto at\nExhibit G (collectively, the \"Employment Agreements\", and individually, an\n---------                     ---------------------\n\"Employment Agreement\") with the individuals set forth on Schedule 6.05(b)\n--------------------\nhereto.\n\n          (c)  Simultaneously with the execution of this Agreement, Parent shall\nexecute and deliver an option assumption agreement in the form attached hereto\nat Exhibit I (collectively, the \"Option Assumption Agreements\", and \n   ---------                     ----------------------------      \nindividually, an \"Option Assumption Agreement\") to each holder of Company\n                  ---------------------------\nOptions as set forth on Schedule 6.05(c) hereto, which Option Assumption\nAgreements shall provide for the waiver of any acceleration of vesting for\ncertain Company Options in connection with the Merger. Prior to the Effective\nTime, the Company and Parent shall use their reasonable best efforts to ensure\nthat all holders of Company Options shall execute an Option Assumption\nAgreement.\n\n          (d)  Prior to the Effective Date, the Company and Parent shall use \ntheir reasonable best efforts to cause all employees of the Company that will be\nemployees of Parent following the Effective Date to enter into non-disclosure\nand invention assignment agreements (collectively, the \"Invention Assignment \n                                                        --------------------\nAgreements\", and individually, an \"Invention Assignment Agreement\") with Parent.\n----------                         ------------------------------ \n     \n\n                                      37\n\n \n          (e)  The Company agrees to adopt resolutions to terminate its 401(k) \nplan immediately prior to Closing, unless Parent, in its sole and absolute\ndiscretion, agrees to sponsor and maintain such plans by providing the Company\nwith written notice of such election before the Effective Time. Unless Parent\nprovides such notice to the Company, Parent shall receive from the Company\nevidence that the Company's Board of Directors has adopted resolutions to\nterminate the 401(k) plan (the form and substance of which resolutions shall be\nsubject to the review and approval of Parent), effective as of the day\nimmediately preceding the Closing Date.\n\n          (f)  The Company, and as applicable, its ERISA Affiliates, each agree \nto terminate any and all group severance, separation or salary continuation\nplans, programs or arrangements immediately prior to Closing. Parent shall\nreceive from the Company evidence that the plans, programs or arrangements of\nthe Company, and as applicable, each ERISA Affiliate, have been terminated\npursuant to resolutions of each such entity's Board of Directors (the form and\nsubstance of which resolutions shall be subject to review and approval of\nParent), effective as of the day immediately preceding the Closing Date, but\ncontingent on the Closing.\n\n     SECTION 6.06    Further Action; Consents; Filings.\n                     --------------------------------- \n\n          (a)  Upon the terms and subject to the conditions hereof, each of the \nparties hereto shall use its reasonable best efforts to (i) take, or cause to be\ntaken, all appropriate action and do, or cause to be done, all things necessary,\nproper or advisable under applicable Law or otherwise to consummate and make\neffective the Merger and the other transactions contemplated by this Agreement,\n(ii) obtain from any Governmental Entity all consents, licenses, permits,\nwaivers, approvals, authorizations or orders required to be obtained or made by\nParent or the Company or any of their subsidiaries in connection with the\nauthorization, execution and delivery of this Agreement and the consummation of\nthe Merger and the other transactions contemplated by this Agreement and (iii)\nmake all necessary filings, and thereafter make any other required submission,\nwith respect to this Agreement, the Merger and the other transactions\ncontemplated by this Agreement required under applicable Law. The parties hereto\nshall cooperate with each other in connection with the making of all such\nfilings, including by providing copies of all such documents to the nonfiling\nparty and its advisors prior to filing and, if requested, by accepting all\nreasonable additions, deletions or changes suggested in connection therewith.\n\n          (b)  Each of Parent and Company shall use reasonable efforts to \nresolve such objections, if any, as may be asserted by any Governmental Entity\nwith respect to the transactions contemplated by this Agreement under the HSR\nAct, the Sherman Act, as amended, the Clayton Act, as amended, the federal Trade\nCommission Act, as amended, and any other federal, state or foreign statutes,\nrules, regulations, orders or decrees that are designed to prohibit, restrict or\nregulate actions having the purpose or effect of monopolization or restraint of\ntrade (collectively, \"Antitrust Laws\").\n                      --------------   \n\n          (c)  Notwithstanding anything to the contrary in Section 6.06(a) or \n(b), (i) neither Parent nor any of its subsidiaries shall be required to divest\nany of their respective businesses, product lines or assets, or to take or agree\nto take any other action or agree to any limitation that could reasonably be\nexpected to have a Parent Material Adverse Effect on Parent\n\n\n                                      38\n\n \ncombined with the Surviving Corporation after the Effective Time and (ii)\nneither the Company nor any Subsidiary shall be required to divest any of its\nrespective businesses, product lines or assets, or to take or agree to take any\nother action or agree to any limitation that could reasonably be expected to\nhave a Company Material Adverse Effect.\n\n          (d)  From the date of this Agreement until the earlier of the \nEffective Time or the termination of this Agreement, each party shall promptly\nnotify the other party in writing of any pending or, to the knowledge of such\nparty, threatened action, proceeding or investigation by any Governmental Entity\nor any other person (i) challenging or seeking material damages in connection\nwith this Agreement or the transaction contemplated hereunder or (ii) seeking to\nrestrain or prohibit the consummation of the Merger or the transactions\ncontemplated hereunder or otherwise limit the right of Parent or its\nsubsidiaries to own or operate all or any portion of the businesses or assets of\nCompany.\n\n\n                                      39\n\n \n     SECTION 6.07   Plan of Reorganization.  This Agreement is intended to\n                    ----------------------                                \nconstitute a \"plan of reorganization\" within the meaning of Section 1.368 of the\nincome tax regulations promulgated under the Code.  From and after the date of\nthis Agreement and until the Effective Time, each party hereto shall use its\nreasonable best efforts to cause the Merger to qualify, and will not knowingly\ntake any action, cause any action to be taken, fail to take any action or cause\nany action to fail to be taken which action or failure to act could prevent the\nMerger from qualifying as a reorganization under the provisions of Section\n368(a) of the Code.  Following the Effective Time, neither the Surviving\nCorporation, Parent nor any of their affiliates shall take any action, cause any\naction to be taken, fail to take any action or cause any action to fail to be\ntaken, which action or failure to act could cause the Merger to fail to qualify\nas a reorganization under Section 368(a) of the Code.\n\n     SECTION 6.08   No Public Announcement.  The initial press release relating \n                    ----------------------      \nto this Agreement shall be a joint press release the text of which has been\nagreed to by each of Parent and the Company. Thereafter, unless otherwise\nrequired by applicable Law, the Company shall not issue any press release or\notherwise make any public statements with respect to this Agreement, the Merger\nor any of the other transactions contemplated by this Agreement without the\nprior written consent of Parent.\n\n     SECTION 6.09   Expenses.  If the Merger is not consummated, all costs and\n                    -------- \nexpenses incurred in connection with this Agreement, the Merger and other\ntransactions contemplated by this Agreement (including, without limitation, the\nfees and expenses of financial advisors, accountants and legal counsel) (i) if\nincurred by Parent and Merger Sub, shall be paid by Parent (\"Parent Expenses\")\n                                                             ---------------\nand (ii) if incurred by the Company (the \"Company Expenses\") or its shareholders\n                                          ----------------\n(the \"Shareholder Expenses\"), shall be paid, if Company Expenses, by the Company\n      --------------------\nor, if Shareholder Expenses, by the Company Shareholders.  If the Merger is\nconsummated, the Parent Expenses shall be borne solely and entirely by Parent\nand the Company Expenses and the Shareholder Expenses shall be borne solely and\nentirely by the Company and the Company Shareholders, respectively; provided,\n                                                                    --------\nthat the fees of Morrison &amp; Foerster LLP, counsel to the Company, shall be paid\nin full at the Closing and all Company Expenses in excess of $200,000 shall be\nthe liability of the Company Shareholders.\n\n     SECTION 6.10   Affiliate Agreements.  The Company shall cause each person \n                    --------------------                \nthat could reasonably be deemed to be an \"affiliate\" of the Company for purposes\nof the Securities Act to execute and deliver to Parent, as promptly as\npracticable after the execution of this Agreement, an Affiliate Agreement in the\nform of Exhibit C.\n\n     SECTION 6.11   Indemnification of Officers and Directors.\n                    -----------------------------------------      \n\n          (a)  For six years from and after the Closing Date, Parent agrees to \nindemnify (including advancement of expenses) and hold harmless all past and\npresent officers and directors of the Company to the same extent such Persons\nare indemnified as of the date of this Agreement by the Company pursuant to the\nCompany's Articles of Incorporation or Bylaws, or pursuant to employment\nagreements or indemnification agreements identified on the Company Disclosure\nSchedule or under applicable law for acts or omissions which occurred at or\nprior to the Effective Time; provided, however, that Parent shall not be\nrequired to indemnify outside directors of the Company for breaches or alleged\nbreaches of statutory fiduciary duties of\n\n                                      40\n\n \nloyalty or care to the Company's shareholders. This indemnification shall not\napply to any claim by an Indemnitee pursuant to the terms of this Agreement or\nany other transaction contemplated by this Agreement. This Section 6.11 shall\nsurvive the consummation of the Merger, and is intended to be for the benefit\nof, and shall be enforceable by, the Indemnified Persons, their heirs and\npersonal representatives and shall be binding on Parent and the Surviving\nCorporation.\n\n          (b)  If Parent, the Surviving Corporation or any of its successors or\nassigns (A) consolidates with or merges into any other Person and shall not be\nthe continuing or surviving corporation or entity of such consolidation or\nmerger, or (B) transfers or conveys all or substantially all of its properties\nand assets to any Person, then, in each such case, to the extent necessary,\nproper provision shall be made so that the successors and assigns of Parent or\nthe Surviving Corporation, as the case may be, shall assume the obligations set\nforth in this Section 6.11.\n\n                                      41\n\n \n     SECTION 6.12   Shareholder Certificates.  The Company shall use all \n                    ------------------------    \nreasonable efforts to cause each Company Shareholder to execute and deliver to\nParent prior to the Closing a Shareholder Certificate.\n\n     SECTION 6.13   Nasdaq National Market Listing.  Parent shall promptly \n                    ------------------------------          \nprepare and submit to the Nasdaq National Market a listing application covering\nthe shares of Parent Common Stock to be issued in the Merger and pursuant to the\nCompany Options, and shall use its reasonable efforts to obtain, prior to the\nEffective Time, approval for the listing of such Parent Shares, subject to\nofficial notice to the Nasdaq National Market of issuance, and the Company shall\ncooperate with Parent with respect to such listing.\n\n    SECTION 6.14    Registration on Form S-3. Parent shall use its best efforts \n                    ------------------------    \nto file a registration statement on Form S-3 to register the resale of all\nshares of Parent Common Stock issued pursuant to Article II hereof within 90\ndays following the Effective Time, subject to the terms of Schedule 6.14 hereof;\nprovided, however, that in the event of a Board of Directors' Determination (as\nsuch term is defined in Schedule 6.14), Parent shall have the one time right to\ndelay the effectiveness of such registration for a period of up to 30 days.\n\n     SECTION 6.15   Personal Guarantees.  Parent shall use all reasonable \n                    -------------------      \nefforts to cause all personal guarantees of the obligations of the Company made\nby any individuals listed on Schedule 6.05(b) and disclosed in the Company\nDisclosure Schedule to be released and discharged as soon as is reasonably\npossible following the closing, and in no event later than 120 days following\nthe Closing. Parent agrees to indemnify and hold harmless each guarantor under\neach such personal guarantee for any loss suffered by any such guarantor solely\nas a result of any action or inaction of Parent or the Company following the\nClosing.\n\n                                  ARTICLE VII\n\n                           CONDITIONS TO THE MERGER\n                           ------------------------\n\n     SECTION 7.01   Conditions to the Obligations of Each Party. The \n                    -------------------------------------------    \nobligations of the Company, Parent and Merger Sub to consummate the Merger are\nsubject to the satisfaction or waiver (where permissible) of the following\nconditions:\n\n          (a)  Shareholder Approval.  This Agreement shall have been \n               --------------------       \nunanimously approved and adopted by the affirmative vote of all of the Company\nShareholders in accordance with the CGCL and the Company's Articles of\nIncorporation;\n\n          (b)  No Order.  No Governmental Entity or court of competent \n               --------    \njurisdiction located or having jurisdiction in the United States shall have\nenacted, issued, promulgated, enforced or entered any decree, judgment,\ninjunction or other order, whether temporary, preliminary or permanent (each an\n\"Order\") which is then in effect and has the effect of making the Merger\n -----                                                                  \nillegal or otherwise prohibiting consummation of the Merger;\n\n          (c)  Employment Agreements.  The individuals set forth on Schedule \n               ---------------------      \n6.05(b) hereto shall have entered into Employment Agreements with Parent;\n\n                                      42\n\n \n          (d)  No Restraints.  There shall not be pending or threatened any \n               -------------    \nsuit, action, investigation or proceeding to which a Governmental Entity is a\nparty (i) seeking to restrain or prohibit the consummation of the Merger or any\nof the other transactions contemplated by this Agreement or seeking to obtain\nfrom Parent or the Company any damages that are material or (ii) seeking to\nprohibit or limit the ownership or operation by Parent or the Company of any\nportion of their respective businesses or assets; and\n\n          (e)  Escrow Agreement. The Company, the Escrow Agent and the \n               ----------------  \nShareholders' Representative shall have entered into the Escrow Agreement and\nthe Escrow Agreement shall be in full force and effect at the Effective Time.\n\n     SECTION 7.02   Conditions to the Obligations of Parent and Merger Sub.  The\n                    ------------------------------------------------------      \nobligations of Parent and Merger Sub to consummate the Merger are subject to the\nsatisfaction or waiver (where permissible) of the following additional\nconditions:\n\n          (a)  Representations and Warranties.  Each of the representations and \n               ------------------------------     \nwarranties of the Company contained in this Agreement that are qualified as to\nmateriality or Company Material Adverse Effect or any similar standard or\nqualification, shall be true and correct in all respects, and each of the\nrepresentations and warranties of the Company contained in this Agreement that\nare not qualified as to materiality or Company Material Adverse Effect or any\nsimilar standard or qualification, shall be true and correct in all material\nrespects, in each case as of the Effective Time as though made on and as of the\nEffective Time, except that those representations and warranties that address\nmatters only as of a particular date shall remain true and correct as of such\ndate, and Parent shall have received a certificate of the President of the\nCompany to such effect. The representations and warranties of each Company\nShareholder set forth in such Shareholder's Shareholder Certificate shall be\ntrue and correct, except where the failure to be so true and correct would not\nresult in the failure of the shares of Parent Common Stock to be issued in the\nMerger to be exempt from registration under the Securities Act pursuant to Rule\n506 thereof;\n\n          (b)  Performance of Covenants.  The Company shall have performed or \n               ------------------------     \ncomplied in all material respects with all agreements and covenants required by\nthis Agreement to be performed or complied with by it on or prior to the\nEffective Time and Parent shall have received a certificate of the President of\nthe Company to that effect;\n\n          (c)  Approvals.  Parent shall have received, each in form and \n               ---------      \nsubstance reasonably satisfactory to Parent, (i) all required authorizations,\nconsents, orders and approvals of all Governmental Entities and officials, if\nany, and (ii) all third party consents set forth in Sections 3.05 and 3.06\nherein or on the Company Disclosure Schedule;\n\n          (d)  Dissenting Shareholders.  Dissenting Shares shall comprise not \n               -----------------------     \nmore than 1% of the Company Stock outstanding immediately prior to the Effective\nTime;\n\n          (e)  No Company Material Adverse Effect.  No event or events shall \n               ----------------------------------    \nhave occurred which, individually or in the aggregate, have had, or could\nreasonably be expected to have, a Company Material Adverse Effect;\n\n                                      43\n\n \n          (f)  Option Assumption Agreements.  The individuals set forth on \n               ----------------------------  \nSchedule 6.05(c) hereto shall have entered into Option Assumption Agreements\nwith Parent.\n\n          (g)  Affiliate Agreements.  Each affiliate of the Company shall have \n               --------------------    \nexecuted and delivered to Parent an Affiliate Agreement and such agreement shall\nremain in full force and effect;\n\n          (h)  Opinion of Company's Counsel.  Parent shall have received the \n               ----------------------------  \nopinion of Morrison &amp; Foerster LLP, counsel to the Company, substantially in the\nform attached hereto as Exhibit D;\n                        --------- \n\n          (i)  Secretary's Certificate. A certificate executed by the Secretary \n               -----------------------      \nof the Company attaching and certifying as to the Company's current Articles of\nIncorporation and Bylaws and the resolutions of the Company's Board of Directors\nand shareholders approving and adopting this Agreement and the transactions\nrelating thereto;\n\n          (j)  Shareholder Certificates.  Each holder of Company Stock shall \n               ------------------------   \nhave executed and delivered to Parent a Shareholder Certificate;\n\n          (k)  FIRPTA Compliance.  The Company shall have delivered to Parent a \n               -----------------   \nproperly executed statement in a form reasonably acceptable to Parent for\npurposes of satisfying Parent's obligations under Treasury Regulation 1.1445-\n2(c)(3);\n\n          (l)  Company Employees. All of the individuals set forth on Schedule \n               -----------------     \n6.05(b) shall be employed by the Company;\n\n          (m)  Approvals.  All authorizations, consents, or approvals of, or \n               ---------           \nnotifications to any third party set forth on Schedule 7.02(m), required by the\nCompany's contracts, agreements or other obligations in connection with the\nconsummation of the Merger shall have occurred or been obtained;\n\n          (n)  Board and Officer Resignations.  The Company shall have received \n               ------------------------------     \nwritten letters of resignation from each of the current members of the Board of\nDirectors and Officers of the Company, in each case effective at the Effective\nTime;\n\n          (o)  Waivers of Notice.  Each holder of shares of Company Preferred \n               -----------------     \nStock shall have waived prior notice of the consummation of the Merger;\n\n          (p)  Termination of Company Agreements.  The Company's agreements on \n               ---------------------------------       \nSchedule 7.02(p) shall have been terminated;\n\n          (q)  Termination of 401(k) Plan.  The Company shall have adopted a \n               --------------------------    \nresolution terminating the Company's 401(k) Plan effective at least one day\nprior to the Closing Date and no further contributions shall have been made to\nthe 401(k) Plan. The Company shall have provided to Parent (i) executed\nresolutions of the board of directors of the Company authorizing the termination\nand (ii) an executed amendment to the 401(k) Plan sufficient to assure\ncompliance with all applicable requirements of the Code and regulations\nthereunder so that the tax-qualified status of the 401(k) Plan will be\nmaintained at the time of termination;\n\n                                      44\n\n \n          (r)  Regulation D.  The issuance of the Shares of Parent Common Stock\n               ------------   \nto be issued in the Merger shall be exempt from the registration requirements\nunder the Securities Act or alternative measures shall have been taken pursuant\nto Section 6.02(c).\n\n     SECTION 7.03   Conditions to the Obligations of the Company.  The \n                    --------------------------------------------   \nobligations of the Company to consummate the Merger are subject to the\nsatisfaction or waiver (where permissible) of the following additional\nconditions:\n\n          (a)  Representations and Warranties.  Each of the representations and \n               ------------------------------      \nwarranties of Parent and Merger Sub contained in this Agreement shall be true\nand correct in all material respects, in each case as of the Effective Time, as\nthough made on and as of the Effective Time, except that those representations\nand warranties which address matters only as of a particular date shall remain\ntrue and correct as of such date, and the Company shall have received a\ncertificate of a duly authorized officer of Parent to such effect;\n\n          (b)  Performance of Covenants.  Parent and Merger Sub shall have \n               ------------------------     \nperformed or complied in all material respects with all agreements and covenants\nrequired by this Agreement to be performed or complied with by it on or prior to\nthe Effective Time, and the Company shall have received a certificate of a duly\nauthorized officer of Parent to that effect;\n\n          (c)  No Parent Material Adverse Effect.  No event or events shall \n               ---------------------------------    \nhave occurred which, individually or in the aggregate, have had, or could\nreasonably be expected to have, a Parent Material Adverse Effect.\n\n          (d)  Employee Offer Letters.  All Company employees shall have \n               ----------------------       \nreceived an offer of employment substantially in the form of Exhibit H hereto.\n                                                ---------        \n\n          (e)  Opinion of Parent's Counsel.  The Company shall have received \n               ---------------------------    \nthe opinion of Gunderson Dettmer Stough Villeneuve Franklin &amp; Hachigian, LLP,\ncounsel to Parent, substantially in the form attached hereto as Exhibit E.\n                                                                --------- \n\n          (f)  Tax Opinion of Company's Counsel.  Morrison &amp; Foerster LLP, \n               --------------------------------        \ncounsel to the Company, shall have delivered to the Company Shareholders an\nopinion to the effect that the Merger will be treated for federal income tax\npurposes as a reorganization qualifying under the provisions of Section 368(a)\nof the Code, and each of Parent, Merger Sub and the Company will be \"a party to\na reorganization\" within the meaning of Section 368(b) of the Code, which\nopinion shall not have been withdrawn or modified in any material respect. The\nissuance of such opinion shall be conditioned upon the receipt by Morrison &amp; Foerster LLP of representation letters from each of Parent and the Company; each\nsuch representation letter shall be dated on or before the date of such opinion\nand shall not have been withdrawn or modified in any material respect.\n\n                                 ARTICLE VIII\n\n                       TERMINATION, AMENDMENT AND WAIVER\n                       ---------------------------------\n\n     SECTION 8.01   Termination.  This Agreement may be terminated and the \n                    -----------    \nMerger and the other transactions contemplated by this Agreement may be\nabandoned at any time prior\n\n                                      45\n\n \nto the Effective Time, notwithstanding any requisite approval and adoption of\nthis Agreement and the transactions contemplated by this Agreement, as follows:\n\n          (a)  by mutual written consent duly authorized by the Boards of\nDirectors of each of Parent and the Company;\n\n          (b)  by either Parent or the Company if the Effective Time shall not\nhave occurred on or before March 31, 2001; provided, however, that the right to\n                                           --------  -------                   \nterminate this Agreement under this Section 8.01(b) shall not be available to\nany party whose failure to fulfill any obligation under this Agreement has been\nthe cause of, or resulted in, the failure of the Effective Time to occur on or\nbefore March 31, 2001;\n\n          (c)  by either Parent or the Company upon the issuance of any Order\nwhich is final and nonappealable which would (i) prevent the consummation of the\nMerger, (ii) prohibit Parent's or the Company's ownership or operation of any\nportion of the business of the Company or (ii) compel Parent or the Company to\ndispose of or hold separate, as a result of the Merger, any portion of the\nbusiness or assets of the Company or Parent;\n\n          (d)  by Parent upon a breach of any material representation, warranty,\ncovenant or agreement on the part of the Company set forth in this Agreement, or\nif any representation or warranty of the Company shall have become untrue, in\neither case such that the conditions set forth in Sections 7.02(a) and 7.02(b)\nwould not be satisfied (\"Terminating Company Breach\"); provided, however, that,\n                         --------------------------    --------  -------\nif such Terminating Company Breach is curable by the Company through the\nexercise of its best efforts and for so long as the Company continues to\nexercise such best efforts, Parent may not terminate this Agreement under this\nSection 8.01(d) unless such breach is not cured within 15 days after notice\nthereof is provided by Parent to the Company (but no cure period is required for\na breach which, by its nature, cannot be cured); or\n\n          (e)  by the Company upon a breach of any material representation,\nwarranty, covenant or agreement on the part of Parent and Merger Sub set forth\nin this Agreement, or if any representation or warranty of Parent and Merger Sub\nshall have become untrue, in either case such that the conditions set forth in\nSections 7.03(a) and 7.03(b) would not be satisfied (\"Terminating Parent \n                                                      ----------- ------ \nBreach\"); provided, however, that, if such Terminating Parent Breach is\n------    --------  -------                                         \ncurable by Parent and Merger Sub through the exercise of their respective best\nefforts and for so long as Parent and Merger Sub continue to exercise such best\nefforts, the Company may not terminate this Agreement under this Section 8.01(e)\nunless such breach is not cured within 15 days after notice thereof is provided\nby the Company to Parent (but no cure period is required for a breach which, by\nits nature, cannot be cured).\n\n     SECTION 8.02   Effect of Termination.  In the event of termination of this\n                    ---------------------                                      \nAgreement pursuant to Section 8.01, this Agreement shall forthwith become void,\nthere shall be no liability under this Agreement on the part of Parent, Merger\nSub or the Company or any of their respective officers or directors, and all\nrights and obligations of each party hereto shall cease; provided, however, that\n(i) Sections 6.03(b) and 6.09 and Articles VIII and IX shall remain in full\nforce and effect and survive any termination of this Agreement and (ii) nothing\nherein shall relieve any party from liability for any actual damages incurred\n(but not \n\n                                      46\n\n \nconsequential damages) resulting from the breach of any of its representations,\nwarranties, covenants or agreements set forth in this Agreement.\n\n     SECTION 8.03    Amendment.  This Agreement may be amended by the parties \n                     ---------\nhereto by action taken by or on behalf of their respective Boards of Directors\nat any time prior to the Effective Time. This Agreement may not be amended\nexcept by an instrument in writing signed by the parties hereto.\n\n     SECTION 8.04    Waiver.  At any time prior to the Effective Time, any party\n                     ------ \nhereto may (a) extend the time for the performance of any obligation or other\nact of any other party hereto, (b) waive any inaccuracy in the representations\nand warranties contained herein or in any document delivered pursuant hereto and\n(c) waive compliance with any agreement or condition contained herein.  Any such\nextension or waiver shall be valid if set forth in writing and signed by the\nparty or parties to be bound thereby.\n\n                                  ARTICLE IX\n\n                                INDEMNIFICATION\n                                ---------------\n\n     SECTION 9.01    Survival of Representations and Warranties. The \n                     ------------------------------------------  \nrepresentations and warranties of the Company contained in this Agreement and\nthe Voting Agreements (collectively, the \"Acquisition Documents\") shall survive\n                                          ---------------------\nthe Effective Time for a period of twelve (12) months. The Representations and\nWarranties of Parent and Merger Sub do not survive the Effective Time and shall\nterminate as of the Effective Time. Neither the period of survival nor the\nliability of a party hereto with respect to such party's representations and\nwarranties shall be reduced by any investigation made at any time (whether\nbefore or after the Effective Time) by or on behalf of another party hereto or\nby any actual, implied or constructive knowledge or notice of any facts or\ncircumstances that any party may have as a result of any such investigation or\notherwise. If written notice of a claim has been given prior to the expiration\nof the applicable representations and warranties by a party hereto to another\nparty hereto, then the relevant representations and warranties shall survive as\nto such claim until such claim has been finally resolved.\n\n     SECTION 9.02    Indemnification by the Company's Shareholders.\n                     ---------------------------------------------\n          (a)  After the Effective Time, Parent and its affiliates (including, \nafter the Effective Time, the Surviving Corporation), officers, directors,\nemployees, agents, successors and assigns (collectively, the \"Parent Indemnified\n                                                              ------------------\nParties\") shall be indemnified and held harmless by each Shareholder, severally \n-------                                                              \nand not jointly, for such Shareholder's ratable share of any and all\nLiabilities, losses, damages of any kind, diminution in value, claims, costs,\nexpenses, fines, fees, deficiencies, interest, awards, judgments, amounts paid\nin settlement and penalties (including, without limitation, attorneys',\nconsultants' and experts' fees and expenses and other costs of defending,\ninvestigating or settling claims) actually suffered or incurred by them\n(including, without limitation, in connection with any action brought or\notherwise initiated by any of them) (hereinafter, a \"Loss\"), arising out of or \n                                                     ----   \nresulting from:\n\n                                      47\n\n \n               (i)  the breach of any representation or warranty (without giving\neffect to any qualification as to materiality (or similar qualifications)\ncontained therein in determining the amount of any Loss) made by the Company or\nsuch Shareholder in the Acquisition Documents;\n\n              (ii) the breach of any covenant or agreement made by the Company \nor such Shareholder in the Acquisition Documents; provided, however, that no\n                                                  --------  -------\nShareholder shall be liable for breach of any covenant or agreement made by any\nother Shareholder in any Voting Agreement; or\n\n             (iii)  Losses from breach of contract or other claims made by any \nparty alleging to have had a contractual or other right to acquire the Company's\ncapital stock or assets.\n\n          (b)  Notwithstanding anything to the contrary contained in this \nAgreement, except with respect to claims based on fraud:\n\n               (i)  the maximum aggregate amount of indemnifiable Losses arising\nout of or resulting from the causes enumerated in Section 9.02(a) that may be\nrecovered from any Shareholder shall be limited to the Escrow Shares and shall\nnot exceed such Shareholder's pro rata share of the Escrow Shares; and\n\n              (ii)  no indemnification payment by the Shareholders with respect\nto any indemnifiable Loss otherwise payable under Section 9.02(a) and arising\nout of or resulting from the causes enumerated in Section 9.02(a) shall be\npayable until such time as all such indemnifiable Losses shall aggregate to more\nthan $50,000, after which time the Shareholders shall be liable in full for all\nindemnifiable Losses in excess of $50,000; provided, however, that the \n                                           --------  ------- \nlimitations set forth above in each of clauses (i) and (ii) shall not be \noperative with respect to Losses arising from breaches of any of the Company\nBasic Representations; provided further, that, except with respect to unresolved\n                       ----------------\nclaims which have been asserted against the Escrow Fund prior to the 12-month\nanniversary of the Closing Date, the indemnification obligation of the Company\nShareholders pursuant to the is Article IX shall terminate on the 12-month\nanniversary of the Closing Date. As used herein, \"Company Basic Representations\"\nshall mean the representations and warranties set forth in Sections 3.04, 3.05\nand 3.10.\n\n     SECTION 9.03    Indemnification Procedures.\n                     -------------------------- \n\n          (a)  For purposes of this Section 9.03, a party against which \nindemnification may be sought is referred to as the \"Indemnifying Party\" and the\n                                                     ------------------\nparty which may be entitled to indemnification is referred to as the \n\"Indemnified Party\".\n------------------  \n\n          (b)  The obligations and Liabilities of Indemnifying Parties under \nthis Article IX with respect to Losses arising from claims of any third party\nwhich are subject to the indemnification provided for in this Article IX (\"Third\n                                                                           -----\nParty Claims\") shall be governed by and contingent upon the following additional\n------------                                                        \nterms and conditions: if an Indemnified Party shall receive notice of any Third\nParty Claim, the Indemnified Party shall give all Indemnifying Parties notice of\nsuch Third Party Claim within 90 days of the receipt by the Indemnified Party of\nsuch notice; provided, however, that the failure to provide such notice shall \n             --------  -------      \nnot release an      \n\n                                      48\n\n \nIndemnifying Party from any of its obligations under this Article IX except to\nthe extent that such Indemnifying Party is materially prejudiced by such\nfailure. The notice of claim shall describe in reasonable detail the facts known\nto the Indemnified Party giving rise to such indemnification claim, and the\namount or good faith estimate of the amount arising therefrom.\n\n          (c)  If the Indemnifying Party acknowledges in writing its obligation \nto indemnify the Indemnified Party hereunder against any Losses that may result\nfrom such Third Party Claim (and in the case where a Parent Indemnified Party is\nthe Indemnified Party, (i) Parent has reasonably determined that losses which\nmay be incurred as a result of the Third Party Claim do not exceed individually,\nor when aggregated with all other losses subject to indemnification under\nSection 9.02, the maximum aggregate amount of indemnifiable losses set forth in\nsuch Section, (ii) the Third Party Claim involves only money damages and does\nnot seek an injunction or other equitable remedy, (iii) settlement of or an\nadverse judgement with respect to the Third Party Claim is not, in the good\nfaith judgement of Parent, likely to establish a precedential custom or practice\nadverse to the continuing business interests of Parent or to increase the Tax\nliability of Parent or the Company), then the Indemnifying Party shall be\nentitled to assume and control the defense of such Third Party Claim at its\nexpense and through counsel of its choice (such counsel to be reasonably\nacceptable to Parent) if it gives notice of its intention to do so to the\nIndemnified Party within ten days of the receipt of such notice from the\nIndemnified Party; provided, however, if there exists or is reasonably likely to\n                   --------  -------\nexist a conflict of interest that would make it inappropriate in the judgment of\nthe Indemnified Party, in its reasonable discretion, for the same counsel to\nrepresent both the Indemnified Party and the Indemnifying Party, then the\nIndemnified Party shall be entitled to retain its own counsel, in each\njurisdiction for which the Indemnified Party determines counsel is required, at\nthe expense of the Indemnifying Party. In the event that the Indemnifying Party\nexercises the right to undertake any such defense against any such Third Party\nClaim as provided above, the Indemnifying Party shall conduct the defense of the\nThird Party Claim actively and diligently and the Indemnified Party shall\ncooperate with the Indemnifying Party in such defense and make available to the\nIndemnifying Party, at the Indemnifying Party's expense, all witnesses,\npertinent records, materials and information in the Indemnified Party's\npossession or under the Indemnified Party's control relating thereto as is\nreasonably required by the Indemnifying Party. Similarly, in the event the\nIndemnified Party is, directly or indirectly, conducting the defense against any\nsuch Third Party Claim, the Indemnifying Party shall cooperate with the\nIndemnified Party in such defense and make available to the Indemnified Party,\nat the Indemnifying Party's expense, all such witnesses, records, materials and\ninformation in the Indemnifying Party's possession or under the Indemnifying\nParty's control relating thereto as is reasonably required by the Indemnified\nParty. No such Third Party Claim may be settled by any party conducting the\ndefense against such claim without the prior written consent of the other party;\nprovided, however, if the Shareholders are the Indemnifying Parties and are not \n--------  -------\nentitled to assume the defense against such Third Party Claim pursuant to this\nparagraph, the Parent Indemnified Party shall have the right to consent to the\nentry of any judgement or enter into any settlement with respect to the Third\nParty Claim in any manner it may deem appropriate (and Parent need not consult\nwith, or obtain any consent from, the Shareholders or the Shareholders'\nRepresentative in connection therewith).\n\n     SECTION 9.04    Shareholders' Representative.  Jeff Stark, (such Person \n                     ----------------------------\nand any successor or successors being the \"Shareholders' Representative\") shall \nact as the representative \n\n                                      49\n\n \nof the Shareholders, and shall be authorized to act on behalf of the\nShareholders and to take any and all actions required or permitted to be taken\nby the Shareholders' Representative under this Agreement or the Escrow\nAgreement, with respect to any claims (including the settlement thereof) made by\nParent or the Shareholders for indemnification pursuant to this Article IX of\nthe Agreement and with respect to any actions to be taken by the Shareholders'\nRepresentative pursuant to the terms of the Escrow Agreement. The Shareholders\nshall be bound by all actions taken by the Shareholders' Representative in its\ncapacity thereof, except for any action that conflicts with the limitation set\nforth in the final sentence of this Section 9.04. The Shareholders'\nRepresentative shall promptly, and in any event within five business days,\nprovide written notice to the Shareholders of any action taken on their behalf\nby the Shareholders' Representative pursuant to the authority delegated to the\nShareholders' Representative under this Section 9.04. The Shareholders'\nRepresentative shall at all times act in his or her capacity as Shareholders'\nRepresentative in a manner that the Shareholders' Representative believes to be\nin the best interest of the Shareholders. Neither the Shareholders'\nRepresentative nor any of its directors, officers, agents or employees shall be\nliable to any Person for any error of judgment, or any action taken, suffered or\nomitted to be taken, under this Agreement or the Escrow Agreement, except in the\ncase of the Shareholders' Representative's gross negligence, bad faith or\nwillful misconduct. The Shareholders' Representative may consult with legal\ncounsel, independent public accountants and other experts selected by it and\nshall not be liable for any action taken or omitted to be taken in good faith by\nit in accordance with the advice of such counsel, accountants or experts. The\nShareholders' Representative shall not have any duty to ascertain or to inquire\nas to the performance or observance of any of the terms, covenants or conditions\nof this Agreement or the Escrow Agreement. As to any matters not expressly\nprovided for in this Agreement or the Escrow Agreement, the Shareholders'\nRepresentative shall not be required to exercise any discretion or take any\naction. Each Shareholder severally shall indemnify and hold harmless and\nreimburse the Shareholders' Representative from and against such Shareholder's\nratable share of any and all liabilities, losses, damages, claims, costs or\nexpenses suffered or incurred by the Shareholders' Representative arising out of\nor resulting from any action taken or omitted to be taken by the Shareholders'\nRepresentative under this Agreement or the Escrow Agreement, other than such\nliabilities, losses, damages, claims, costs or expenses arising out of or\nresulting from the Shareholders' Representative's gross negligence, bad faith or\nwillful misconduct. Notwithstanding anything to the contrary herein or in the\nEscrow Agreement, (a) the Shareholders' Representative is not authorized to, and\nshall not, accept on behalf of any Shareholder any merger consideration to which\nsuch Shareholder is entitled under this Agreement and (b) the Shareholders'\nRepresentative shall not in any manner exercise, or seek to exercise, any voting\npower whatsoever with respect to shares of capital stock of the Company or\nParent now or hereafter owned of record or beneficially by any Shareholder\nunless the Shareholders' Representative is expressly authorized to do so in a\nwriting signed by such Shareholder. In all matters relating to this Article IX,\nthe Shareholders' Representative shall be the only party entitled to assert the\nrights of the Shareholders, and the Shareholders' Representative shall perform\nall of the obligations of the Shareholders hereunder. Parent shall be entitled\nto rely on all statements, representations and decisions of the Shareholders'\nRepresentative.\n\n                                   ARTICLE X\n\n                              GENERAL PROVISIONS\n                              ------------------\n\n                                      50\n\n \n     SECTION 10.01    Notices.  All notices, requests, claims, demands and other\n                      ------- \ncommunications hereunder shall be in writing and shall be given (and shall be\ndeemed to have been duly given upon receipt) by delivery in person, by cable,\ntelecopy, facsimile, telegram or telex or by registered or certified mail\n(postage prepaid, return receipt requested) to the respective parties at the\nfollowing addresses (or at such other address for a party as shall be specified\nin a notice given in accordance with this Section 10.01):\n\n                (a)  if to Parent or Merger Sub:\n\n                     SonicWALL, Inc.\n                     1160 Bordeaux Drive\n                     SunnyVale, California 94089\n                     Facsimile No.:  (408) 962-1201\n                     Attention:  Molly Attala, Vice President, Finance\n\n                     with a copy to:\n \n                     Gunderson Dettmer Stough Villeneuve Franklin &amp; Hachigian, LLP\n                     155 Constitution Drive\n                     Menlo Park, California  94025\n                     Facsimile No.:  (650) 463-5449\n                     Attention:  Gregory K. Miller\n\n                (b)  if to the Company:\n\n                     Ignyte Technology, Inc.\n                     3226 Scott Blvd.\n                     Santa Clara, California  95054\n                     Facsimile No.:  (408) 350-2601\n                     Attention: Jeff Stark, President\n\n                     with a copy to:\n\n                     Morrison &amp; Foerster LLP\n                     755 Page Mill Road\n                     Palo Alto, California 94304\n                     Facsimile No.:  (650) 494-0792\n                     Attention:  Paul \"Chip\" L. Lion, III\n\n     SECTION 10.02    Certain Definitions.  (a) As used in this Agreement, the\n                      -------------------                                     \nfollowing terms shall have the following meanings:\n\n                (i)  \"beneficial owner\" with respect to any shares means a \n                      ----------------  \nPerson who shall be deemed to be the beneficial owner of such shares (i) which\nsuch Person or any of its affiliates or associates (as such term is defined in\nRule 12b-2 promulgated under the Exchange Act) beneficially owns, directly or\nindirectly, (ii) which such Person or any of its\n\n                                      51\n\n \naffiliates or associates has, directly or indirectly, (A) the right to acquire\n(whether such right is exercisable immediately or subject only to the passage of\ntime), pursuant to any agreement, arrangement or understanding or upon the\nexercise of consideration rights, exchange rights, warrants or options, or\notherwise, or (B) the right to vote pursuant to any agreement, arrangement or\nunderstanding, or (iii) which are beneficially owned, directly or indirectly, by\nany other Persons with whom such Person or any of its affiliates or associates\nor Person with whom such Person or any of its affiliates or associates has any\nagreement, arrangement or understanding for the purpose of acquiring, holding,\nvoting or disposing of any shares.\n\n              (ii) \"business day\" means any day on which banks are not required \n                    ------------                      \nor authorized to close in Sunnyvale, California.\n\n             (iii)  \"CERCLA\" means the Comprehensive Environmental Response, \n                     ------  \nCompensation and Liability Act of 1980, as amended as of the date hereof.\n\n              (iv) \"Company Software\" means Software, the intellectual property \n                    ----------------  \nof which is owned by the Company, which is both (A) material to the operation of\nthe business of the Company or any Subsidiary, including all computer software\nand databases operated by the Company or any Subsidiary on its web sites or used\nby the Company or any Subsidiary in connection with processing customer orders,\nstoring customer information, or storing or archiving data, and (B)\nmanufactured, distributed, sold, licensed or marketed by the Company or any\nSubsidiary.\n\n               (v)  \"control\" (including the terms \"controlled by\" and \"under \n                     -------  \ncommon control with\") means the possession, directly or indirectly or as trustee\nor executor, of the power to direct or cause the direction of the management and\npolicies of a Person, whether through the ownership of voting securities, as\ntrustee or executor, by contract or credit arrangement or otherwise.\n\n              (vi) \"Environmental Laws\" means any federal, state or local \n                    ------------------  \nstatute, law, ordinance, regulation, rule, code or order of the United States,\nor any other jurisdiction and any enforceable judicial or administrative\ninterpretation thereof, including any judicial or administrative order, consent\ndecree or judgment, relating to pollution or protection of the environment or\nnatural resources, including, without limitation, those relating to the use,\nhandling, transportation, treatment, storage, disposal, release or discharge of\nHazardous Materials, as in effect as of the date of this Agreement.\n\n             (vii)  \"Environmental Permits\" means any permit, approval, \n                     --------------------- \nidentification number, license and other authorization required under any\napplicable Environmental Law.\n\n            (viii)  \"Hazardous Materials\" means (a) any petroleum, petroleum \n                     -------------------  \nproducts, by-products or breakdown products, radioactive materials, asbestos-\ncontaining materials or polychlorinated biphenyls or (b) any chemical, material\nor substance defined or regulated as toxic or hazardous or as a pollutant or\ncontaminant or waste under any applicable Environmental Law.\n\n                                      52\n\n \n              (ix) \"Intellectual Property\" means:  (a) United States, foreign \n                    ---------------------  \nand international patents, patent applications and statutory invention\nregistrations, (b) trademarks, service marks, domain names, trade dress, logos,\nand other source identifiers, including registrations and applications for\nregistration thereof, (c) copyrights, including registrations and applications\nfor registration thereof, (d) Software, (e) confidential and proprietary\ninformation, including trade secrets and know-how, and (f) rights of privacy,\npublicity and endorsement, and all other rights associated therewith in any\njurisdiction.\n\n               (x)  \"knowledge of the Company\" or \"the Company's knowledge\" \n                     ------------------------      -----------------------  \nmeans the knowledge of Jeff Stark, Rob Greer, Rama Polefka, Steve Kwan, and the\nCompany's principal financial and accounting officer(s) and such knowledge that\nwould be imputed to such Persons upon due investigation.\n\n              (xi) \"Licensed Intellectual Property\" means all Intellectual \n                    ------------------------------  \nProperty licensed to the Company pursuant to the Licenses.\n\n             (xii)  \"Licenses\" mean (A) licenses of Intellectual Property by \n                     --------  \nthe Company or any Subsidiary to third parties, (B) licenses of Intellectual\nProperty by third parties to the Company or any Subsidiary, and (C) agreements\nbetween the Company or any Subsidiary and third parties relating to the\ndevelopment or use of Intellectual Property, the development or transmission of\ndata, or the use, modification, framing, linking advertisement, or other\npractices with respect to Internet web sites.\n\n            (xiii)  \"Owned Intellectual Property\" means all Intellectual \n                     ---------------------------  \nProperty owned by the Company or any Subsidiary.\n\n             (xiv)   \"person\" means an individual, corporation, partnership, \n                      ------\nlimited partnership, syndicate, person (including, without limitation, a\n\"person\" as defined in Section 13(d)(3) of the Exchange Act), trust, association\nor entity or government, political subdivision, agency or instrumentality of a\ngovernment.\n\n              (xv)  \"Software\" means computer software, programs and databases\n                     --------  \nin any form, including Internet web sites, web content and links, all versions,\nupdates, corrections, enhancements, and modifications thereof, and all related\ndocumentation.\n\n             (xvi) \"subsidiary\" or \"subsidiaries\" of any Person means any \n                    ----------      ------------\ncorporation, partnership, joint venture or other legal entity of which such\nPerson (either alone or through or together with any other subsidiary) owns,\ndirectly or indirectly, more than 50% of the stock or other equity interests,\nthe holders of which are generally entitled to vote for the election of the\nboard of directors or other governing body of such corporation or other legal\nentity.\n\n        (b)  The following terms shall have the meanings defined for such terms \nin the Sections of this Agreement set forth below:\n\n\n\nTerm                                       Section\n----                                       -------\n                                        \nAcquisition Documents.....................  9.01\naffiliate.................................  2.02(h)\nAggregate Common Merger Consideration.....  2.01(b)\n \n\n                                      53\n\n \n\n                                        \nAggregate Preferred Merger Consideration..   2.01(b)\nAgreement.................................  Preamble\nAntitrust Laws............................   6.06(b)\nArticles of Merger........................   1.02\nAssets....................................   3.18\nAudited Financial Statements..............   3.08(a)\nbeneficial owner..........................  10.02(a)\nbusiness day..............................  10.02(a)\nCERCLA....................................  10.02(a)\nCGCL......................................  Recitals\nClosing...................................   1.02\nClosing Date..............................   1.02\nClosing Price.............................   2.01(b)\nCode......................................  Recitals\nCommon Exchange Ratio.....................   2.01(b)\nCompany...................................  Preamble\nCompany Basic Representations.............   9.02(b)\nCompany Common Stock......................  Recitals\nCompany Disclosure Schedule...............  Article III\nCompany Material Adverse Effect...........   3.01\nCompany Permits...........................   3.07\nCompany Preferred Stock...................  Recitals\nCompany Proprietary Rights................   3.14(b)\nCompany Share Certificates................   2.02(a)\nCompany Shareholders......................   2.02(b)\nCompany Software..........................  10.02(a)\nCompany Stock.............................  Recitals\nCompany Options...........................   2.04(a)\nCompany's knowledge.......................  10.02(a)\nCompeting Transaction.....................   6.05(b)\ncontrol...................................  10.02(a)\nDissenting Shares.........................   2.05(a)\nEffective Time............................   1.02\nEmployment Agreements.....................   6.05(b)\nEnvironmental Laws........................  10.02(a)\nEnvironmental Permits.....................  10.02(a)\nERISA.....................................   3.11(a)\nERISA Affiliate...........................   3.11(e)\nEscrow Account............................   2.02(b)\nEscrow Agent..............................   2.02(b)\nEscrow Agreement..........................   2.02(b)\nEscrow Fund...............................   2.02(b)\nEscrow Shares.............................   2.01(b)\nExchange Act..............................   4.04(a)\nExchange Agent............................   2.03(a)\nFormer Owners.............................   3.14(a)\n\n\n                                      54\n\n \n\n                                  \nFully Diluted Common Shares Amount..  2.01(b)\nGovernmental Entity.................  3.06(b)\nGunderson Dettmer...................  1.02\nHazardous Materials................. 10.02(a)\nHSR Act.............................  3.06(b)\nIndemnified Party...................  9.03(a)\nIndemnifying Party..................  9.03(a)\nInformation Statement...............  6.02\nIntellectual Property............... 10.02(a)\nInterim Financial Statements........  3.08(a)\nIRS.................................  3.11(b)\nInvention Assignment Agreement......  6.05(d)\nLaw.................................  3.06(a)\nLegal Proceeding....................  3.10\nLegal Requirements..................  3.04(d)\nLetter of Transmittal...............  2.02(a)\nLiabilities.........................  3.08(b)\nLicensed Intellectual Property...... 10.02(a)\nLicenses............................ 10.02(a)\nLoss................................  9.02(a)\nMaterial Contracts..................  3.12(a)\nMerger..............................  Recitals\nMerger Sub..........................  Preamble\nMultiemployer Plan..................  3.11(c)\nMultiple Employer Plan..............  3.11(c)\nNon-Disclosure Agreement............  6.03(b)\nOption Assignment Agreement.........  6.05(c)\nOrder...............................  7.01(b)\nOwned Intellectual Property......... 10.02(a)\nParent..............................  Preamble\nParent Common Stock.................  Recitals\nParent Disclosure Schedule..........  Article IV\nParent Expenses.....................  Article IV\nParent Indemnified Parties..........  6.09\nParent Material Adverse Effect......  4.04(b)\nParent SEC Reports..................  4.04(a)\nParent Shares.......................  2.01(b)\nperson.............................. 10.02(a)\nplans...............................  3.11(a)\nPreferred Cash Component............  2.01(b)\nPrincipal Shareholders..............  Recitals\nProprietary Rights..................  3.14(b)\nReference Balance Sheet.............  3.07(a)\nRepresentatives.....................  6.03\nReturns.............................  3.16(b)\nSEC.................................  4.05(a)\n\n\n                                      55\n\n \n\n                            \nSecurities Act................   2.02(h)\nShareholder Certificates......   6.09\nSoftware......................  10.02(a)\nShareholders' Representative..   9.04\nStock Plan....................   3.04(b)\nsubsidiary....................  10.02(a)\nSurviving Corporation.........   1.01\nTaxes.........................   3.16(b)\nTerminating Company Breach....   8.01(d)\nTerminating Parent Breach.....   8.01(e)\nThird Party Claims............   9.03(a)\nCGCL..........................   Recitals\nU.S. GAAP.....................   3.08(a)\nVested Parent Shares..........   2.01(b)\nVoting Agreement..............   Recitals\n\n\n\n                                      56\n\n \n     SECTION 10.03    Severability.  If any term or other provision of this \n                      ------------   \nAgreement is invalid, illegal or incapable of being enforced by any rule of Law\nor public policy, all other conditions and provisions of this Agreement shall\nnevertheless remain in full force and effect so long as the economic or legal\nsubstance of the transactions contemplated by this Agreement is not affected in\nany manner materially adverse to any party. Upon such determination that any\nterm or other provision is invalid, illegal or incapable of being enforced, the\nparties hereto shall negotiate in good faith to modify this Agreement so as to\neffect the original intent of the parties as closely as possible in a mutually\nacceptable manner in order that the transactions contemplated by this Agreement\nbe consummated as originally contemplated to the fullest extent possible.\n\n     SECTION 10.04    Assignment; Binding Effect; Benefit.  Neither this \n                      -----------------------------------   \nAgreement nor any of the rights, interests or obligations hereunder shall be\nassigned by any of the parties hereto (whether by operation of Law or otherwise)\nwithout the prior written consent of the other parties. Subject to the preceding\nsentence, this Agreement shall be binding upon and shall inure to the benefit of\nthe parties hereto and their respective successors and assigns. Notwithstanding\nanything contained in this Agreement to the contrary, nothing in this Agreement,\nexpressed or implied, is intended to confer on any person other than the parties\nhereto or their respective successors and assigns any rights, remedies,\nobligations or liabilities under or by reason of this Agreement.\n\n     SECTION 10.05    Incorporation of Exhibits.  The Company Disclosure \n                      -------------------------   \nSchedule, the Parent Disclosure Schedule, the Schedules and all Exhibits\nattached hereto and referred to herein are hereby incorporated herein and made a\npart hereof for all purposes as if fully set forth herein.\n\n     SECTION 10.06    Specific Performance.  The parties hereto agree that\n                      --------------------   \nirreparable damage would occur in the event any provision of this Agreement was\nnot performed in accordance with the terms hereof and that the parties shall be\nentitled to specific performance of the terms hereof, in addition to any other\nremedy at law or in equity.\n         \n     SECTION 10.07    Governing Law; Forum. This Agreement shall be governed by,\n                      --------------------  \nand construed in accordance with, the laws of the State of California applicable\nto contracts executed in and to be performed in that state and without regard to\nany applicable conflicts of law. Any controversy or claim arising out of or\nrelating to this Agreement or a breach hereof shall be finally settled by\narbitration in San Francisco, California, under the commercial rules then in\neffect of the American Arbitration Association, and shall be determined in\naccordance with the laws of the State of California, applicable to contracts to\nbe wholly performed therein.\n\n     SECTION 10.08    Time of the Essence.  For purposes of this Agreement and \n                      -------------------   \nthe transactions contemplated by this Agreement, time is of the essence.\n\n     SECTION 10.09    Waiver of Jury Trial.  Each of the parties hereto hereby\n                      --------------------   \nirrevocably waives any and all right to trial by jury in any Legal Proceeding\narising out of or related to this Agreement or any of the transactions\ncontemplated hereby.\n\n                                      57\n\n \n     SECTION 10.10    Construction.  (a) For purposes of this Agreement, \n                      ------------   \nwhenever the context requires: the singular number shall include the plural, and\nvice versa; the masculine gender shall include the feminine and neuter genders;\nthe feminine gender shall include the masculine and neuter genders; and the\nneuter gender shall include the masculine and feminine genders.\n \n          (b)  The parties hereto agree that any rule of construction to the \neffect that ambiguities are to be resolved against the drafting party shall not\nbe applied in the construction or interpretation of this Agreement.\n\n          (c)  As used in this Agreement, the words \"include\" and \"including,\" \nand variations thereof, shall not be deemed to be terms of limitation, but\nrather shall be deemed to be followed by the words \"without limitation.\"\n\n          (d)  Except as otherwise indicated, all references in this Agreement \nto \"Sections,\" \"Schedules\" and \"Exhibits\" are intended to refer to Sections of\nthis Agreement and Schedules and Exhibits to this Agreement.\n\n     SECTION 10.11    Further Assurances.  Each party hereto shall execute and \n                      ------------------   \ncause to be delivered to each other party hereto such instruments and other\ndocuments, and shall take such other actions, as such other party may reasonably\nrequest (prior to, at or after the Closing) for the purpose of carrying out or\nevidencing any of the transactions contemplated by this Agreement.\n\n     SECTION 10.12    Headings.  The descriptive headings contained in this \n                      --------    \nAgreement are included for convenience of reference only and shall not affect in\nany way the meaning or interpretation of this Agreement.\n\n     SECTION 10.13    Counterparts.  This Agreement may be executed and \n                      ------------   \ndelivered (including by facsimile transmission) in one or more counterparts, and\nby the different parties hereto in separate counterparts, each of which when\nexecuted and delivered shall be deemed to be an original but all of which taken\ntogether shall constitute one and the same agreement.\n\n     SECTION 10.14    Entire Agreement.  This Agreement (including the Exhibits,\n                      ----------------   \nthe Schedules, the Company Disclosure Schedule and the Parent Disclosure\nSchedule) and the Non-Disclosure Agreement constitute the entire agreement among\nthe parties with respect to the subject matter hereof and supersede all prior\nagreements and understandings among the parties with respect thereto. No\naddition to or modification of any provision of this Agreement shall be binding\nupon any party hereto unless made in writing and signed by all parties hereto.\n\n                                      58\n\n \n          IN WITNESS WHEREOF, each of Parent, Merger Sub, the Company and the\nShareholders' Representative has executed or has caused this Agreement to be\nexecuted by its respective officers thereunto duly authorized as of the date\nfirst written above.\n\n\n                              SONICWALL, INC.\n\n                              By:\n                                 -----------------------------------\n                                 Name:\n                                 Title:\n\n                              ITI ACQUISITION CORP.\n\n                              By:\n                                 -----------------------------------\n                                 Name:\n                                 Title:\n\n                              IGNYTE TECHNOLOGY, INC.\n\n                              By:\n                                 -----------------------------------\n                                 Name:\n                                 Title:\n\n                              JEFF STARK\n\n                              By:\n                                 -----------------------------------\n                                 Jeff Stark, solely as Shareholders'\n                                 Representative\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8863],"corporate_contracts_industries":[],"corporate_contracts_types":[9622,9626],"class_list":["post-43024","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-sonicwall-inc","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43024","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43024"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43024"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43024"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}