{"id":43107,"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-qlogic-corp-and-ancor.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-qlogic-corp-and-ancor","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-qlogic-corp-and-ancor.html","title":{"rendered":"Agreement and Plan of Merger &#8211; QLogic Corp. and Ancor Communications Inc."},"content":{"rendered":"<pre>\n                                    AGREEMENT\n\n                               AND PLAN OF MERGER\n\n                                  BY AND AMONG\n\n                               QLOGIC CORPORATION,\n\n                             AMINO ACQUISITION CORP.\n\n                                       AND\n\n                       ANCOR COMMUNICATIONS, INCORPORATED\n\n\n                              --------------------\n\n                                   MAY 7, 2000\n\n                              --------------------\n\n\n   2\n\n                                Table of Contents\n\n                                                                            Page\n                                                                            ----\n\nARTICLE I    THE MERGER........................................................2\n\n     1.1.     The Merger.......................................................2\n     1.2.     Effect of Merger.................................................2\n     1.3.     Effective Time...................................................2\n     1.4.     Articles of Incorporation; Bylaws................................2\n     1.5.     Directors and Officers...........................................3\n     1.6.     Taking of Necessary Action; Further Action.......................3\n     1.7.     The Closing......................................................3\n\nARTICLE II   CONVERSION OF SECURITIES..........................................3\n\n     2.1.     Conversion of Securities.........................................3\n     2.2.     Stock Options....................................................5\n     2.3.     Warrants.........................................................6\n     2.4.     Employee Stock Purchase Plan.....................................6\n     2.5.     Exchange of Certificates.........................................7\n\nARTICLE III  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................8\n\n     3.1.     Organization and Qualification...................................8\n     3.2.     Capital Stock of Subsidiaries....................................9\n     3.3.     Capitalization...................................................9\n     3.4.     Authority Relative to this Agreement............................10\n     3.5.     No Conflict; Required Filings and Consents......................10\n     3.6.     SEC Filings; Financial Statements...............................11\n     3.7.     Absence of Changes or Events....................................12\n     3.8.     Litigation......................................................12\n     3.9.     Title to Properties.............................................12\n     3.10.    Certain Contracts...............................................13\n     3.11.    Compliance with Law.............................................13\n     3.12.    Intellectual Property Rights; Year 2000.........................14\n     3.13.    Taxes...........................................................15\n     3.14.    Employees.......................................................17\n     3.15.    Employee Benefit Plans..........................................17\n     3.16.    Environmental Matters...........................................19\n     3.17.    Insurance.......................................................20\n     3.18.    Foreign Corrupt Practices Act...................................20\n     3.19.    Export Control Laws.............................................20\n     3.20.    Finders or Brokers..............................................20\n     3.21.    Board Recommendation............................................20\n     3.22.    Vote Required...................................................21\n     3.23.    Opinion of Financial Advisor....................................21\n     3.24.    Tax Matters.....................................................21\n     3.25.    State Takeover Statutes; Rights Agreement.......................21\n\n\n                                        i\n   3\n\n                               Table of Contents\n                                  (continued)\n\n                                                                            Page\n                                                                            ----\n\n     3.26.    Registration Statement; Joint Proxy Statement\/Prospectus........21\n\nARTICLE IV  REPRESENTATIONS AND WARRANTIES OF MERGER SUB AND PARENT...........22\n\n     4.1.     Organization and Qualification..................................22\n     4.2.     Capitalization..................................................22\n     4.3.     Authority Relative to this Agreement............................23\n     4.4.     No Conflicts; Required Filings and Consents.....................23\n     4.5.     SEC Filings; Financial Statements...............................24\n     4.6.     Absence of Changes or Events....................................25\n     4.7.     Litigation......................................................25\n     4.8.     Compliance with Law.............................................25\n     4.9.     Finders or Brokers..............................................25\n     4.10.    Tax Matters.....................................................25\n     4.11.    Registration Statement; Joint Proxy Statement\/Prospectus........26\n\nARTICLE V   COVENANTS AND AGREEMENTS..........................................26\n\n     5.1.     Conduct of Business of the Company Pending the Merger...........26\n     5.2.     Preparation of Registration Statement; Joint Proxy\n               Statement\/Prospectus; Blue Sky Laws............................29\n     5.3.     Company Shareholder and Parent Stockholder Meetings.............29\n     5.4.     Additional Agreements, Cooperation..............................30\n     5.5.     Publicity.......................................................30\n     5.6.     No Solicitation.................................................30\n     5.7.     Access to Information...........................................32\n     5.8.     Notification of Certain Matters.................................32\n     5.9.     Resignation of Officers and Directors...........................32\n     5.10.    Indemnification.................................................33\n     5.11.    Shareholder Litigation..........................................34\n     5.12.    Employee Benefit Plans..........................................34\n     5.13.    Determination of Optionholders and Warrantholders...............35\n     5.14.    Preparation of Tax Returns......................................35\n     5.15.    Pooling Affiliates..............................................35\n     5.16.    Pooling Actions.................................................36\n     5.17.    Tax-Free Reorganization.........................................36\n     5.18.    SEC Filings; Compliance.........................................36\n     5.19.    Listing of Additional Shares....................................36\n     5.20.    Rights Agreement................................................36\n\nARTICLE VI   CONDITIONS TO CLOSING............................................36\n\n     6.1.     Conditions to Each Party's Obligation to Effect the Merger......36\n     6.2.     Conditions to Obligations of Parent.............................37\n     6.3.     Conditions to Obligations of the Company........................38\n\n\n                                       ii\n   4\n\n                               Table of Contents\n                                  (continued)\n                                                                            Page\n                                                                            ----\n\nARTICLE VII  TERMINATION......................................................39\n\n     7.1.     Termination.....................................................39\n     7.2.     Effect of Termination...........................................41\n     7.3.     Fees and Expenses...............................................41\n\nARTICLE VIII MISCELLANEOUS....................................................43\n\n     8.1.     Nonsurvival of Representations and Warranties...................43\n     8.2.     Waiver..........................................................43\n     8.3.     Attorneys' Fees.................................................43\n     8.4.     Notices.........................................................43\n     8.5.     Counterparts....................................................44\n     8.6.     Interpretation; Construction....................................44\n     8.7.     Amendment.......................................................44\n     8.8.     No Third Party Beneficiaries....................................44\n     8.9.     Governing Law...................................................45\n     8.10.    Entire Agreement................................................45\n     8.11.    Validity........................................................45\n\n\nEXHIBITS\n\nEXHIBITS\n--------\n\nA    Stock Option Agreement\nB    Voting Agreement\nC    Certificate of Merger\nD    Form of Company Affiliate Letter\nE    Form of Parent Affiliate Letter\n\n                                      iii\n\n\n   5\n\n                                                                    EXHIBIT 99.1\n\n                          AGREEMENT AND PLAN OF MERGER\n\n         This AGREEMENT AND PLAN OF MERGER (this \"Agreement\"), dated May 7,\n2000, is made and entered into by and among QLogic Corporation, a Delaware\ncorporation (\"Parent\"), Amino Acquisition Corp., a Minnesota corporation and\nwholly owned subsidiary of Parent (\"Merger Sub\"), and Ancor Communications,\nIncorporated, a Minnesota corporation (the \"Company\"). Merger Sub and the\nCompany are sometimes collectively referred to as the \"Constituent\nCorporations.\"\n\n                                   WITNESSETH:\n\n         WHEREAS, the respective Boards of Directors of Parent, Merger Sub and\nthe Company have determined that it is advisable and in the best interests of\nthe respective corporations and their shareholders that Merger Sub be merged\nwith and into the Company in accordance with the Minnesota Business Corporation\nAct (the \"MBCA\") and the terms of this Agreement, pursuant to which the Company\nwill be the surviving corporation and will be a wholly owned subsidiary of\nParent (the \"Merger\"); and\n\n         WHEREAS, for financial reporting purposes the parties intend that the\nMerger shall be accounted for as a \"pooling of interests.\" The Company believes,\nafter consultation with its independent accountants, KPMG LLP, that the Company\nwill qualify as a party to a pooling-of-interests transaction under Opinion 16\nof the Accounting Principles Board and applicable rules and regulations of the\nSecurities and Exchange Commission (collectively, \"Opinion 16\"), and shall\nprovide to Parent an opinion letter from its independent accountants, KPMG LLP,\naddressed to the Company, stating that, based on its familiarity with the\nCompany, the Company will qualify as a party to a pooling-of-interests\ntransaction under Opinion 16. Parent believes, after consultation with its\nindependent accountants, KPMG LLP, that Parent will qualify as a party to a\npooling-of-interests transaction under Opinion 16, and shall provide to the\nCompany an opinion letter from its independent accountants, KPMG LLP, addressed\nto Parent, stating that, as of the date of such letter, based on its familiarity\nwith Parent, Parent will qualify as a party to a pooling-of-interests\ntransaction under Opinion 16; and\n\n         WHEREAS, for United States federal income tax purposes, the parties\nintend that the Merger shall qualify as a \"reorganization\" under Section 368(a)\nof the Internal Revenue Code of 1986, as amended (the \"Code\"), and that this\nAgreement constitute a \"plan of reorganization\" within the meaning of the Code;\nand\n\n         WHEREAS, Parent, Merger Sub and the Company desire to make certain\nrepresentations, warranties, covenants, and agreements in connection with, and\nestablish various conditions precedent to, the Merger; and\n\n         WHEREAS, as a condition to, and immediately after the execution of,\nthis Agreement, Parent and the Company are concurrently entering into a Stock\nOption Agreement (the \"Company Option Agreement\"), in substantially the form\nattached hereto as Exhibit A, pursuant to which the Company will grant Parent an\noption exercisable upon the occurrence of certain events;\n\n\n   6\n\n         WHEREAS, as a condition to, and upon the execution of, this Agreement,\ncertain officers of the Company are entering into employment agreements with the\nCompany, and the Chief Executive Officer of the Company is entering into a\nconsulting agreement with Parent; and\n\n         WHEREAS, as an inducement to Parent to enter into this Agreement,\ncertain shareholders of the Company are concurrently herewith entering into a\nVoting Agreement (the \"Voting Agreement\") in substantially the form attached\nhereto as Exhibit B, whereby each such shareholder agrees to vote in favor of\nthe Merger and all other transactions contemplated by this Agreement.\n\n         NOW, THEREFORE, in consideration of the representations, warranties,\ncovenants and agreements set forth in this Agreement and in the Articles of\nMerger (as defined in Section 1.3 hereof), the parties hereto, intending to be\nlegally bound, agree as follows:\n\n                                   ARTICLE I\n                                   THE MERGER\n\n         1.1. The Merger. At the Effective Time (as defined in Section 1.3\nhereof), subject to the terms and conditions of this Agreement and the Articles\nof Merger (as defined in Section 1.3 hereof), Merger Sub shall be merged with\nand into the Company, the separate existence of Merger Sub shall cease, and the\nCompany shall continue as the surviving corporation. The Company, in its\ncapacity as the corporation surviving the Merger, is hereinafter sometimes\nreferred to as the \"Surviving Corporation.\"\n\n         1.2. Effect of Merger. At the Effective Time, the effect of the Merger\nshall be as provided in this Agreement, the Articles of Merger and the\napplicable provisions of the MBCA. Without limiting the generality of the\nforegoing, the Surviving Corporation shall succeed to and possess all the\nproperties, rights, privileges, immunities, powers, franchises and purposes, and\nbe subject to all the duties, liabilities, debts, obligations, restrictions and\ndisabilities, of the Constituent Corporations, all without further act or deed.\n\n         1.3. Effective Time. Subject to the terms and conditions of this\nAgreement, the parties hereto will cause the Articles of Merger, the form of\nwhich is attached hereto as Exhibit C (the \"Articles of Merger\") to be executed,\ndelivered and filed with the Secretary of State of the State of Minnesota in\naccordance with the applicable provisions of the MBCA at the time of the Closing\n(as defined in Section 1.7 hereof). The Merger shall become effective upon\nfiling of the Articles of Merger with the Secretary of State of the State of\nMinnesota, or at such later time as may be agreed to by the parties and set\nforth in the Articles of Merger. The time of effectiveness is herein referred to\nas the \"Effective Time.\" The day on which the Effective Time shall occur is\nherein referred to as the \"Effective Date.\"\n\n         1.4. Articles of Incorporation; Bylaws. From and after the Effective\nTime and until further amended in accordance with applicable law, the Articles\nof Incorporation of the Company, as in effect immediately prior to the Effective\nTime, shall be the Articles of Incorporation of the Surviving Corporation, as\namended as set forth in an exhibit to the Articles of Merger. From and after the\nEffective Time and until further amended in accordance with law, the Bylaws of\nMerger Sub as in effect immediately prior to the Effective Time shall be the\nBylaws of the Surviving Corporation.\n\n\n                                       2\n   7\n\n         1.5. Directors and Officers. From and after the Effective Time, the\ndirectors of the Surviving Corporation shall be the persons who were the\ndirectors of Merger Sub immediately prior to the Effective Time, and the\nofficers of the Surviving Corporation shall be the persons who were the officers\nof Merger Sub immediately prior to the Effective Time. Said directors and\nofficers of the Surviving Corporation shall hold office for the term specified\nin, and subject to the provisions contained in, the Articles of Incorporation\nand Bylaws of the Surviving Corporation and applicable law. If, at or after the\nEffective Time, a vacancy shall exist on the Board of Directors or in any of the\noffices of the Surviving Corporation, such vacancy shall be filled in the manner\nprovided in the Articles of Incorporation and Bylaws of the Surviving\nCorporation.\n\n         1.6. Taking of Necessary Action; Further Action. Parent, Merger Sub and\nthe Company, respectively, shall each use its or their commercially reasonable\nbest efforts to take all such action as may be necessary or appropriate to\neffectuate the Merger under the MBCA at the time specified in Section 1.3\nhereof. If, at any time after the Effective Time, any further action is\nnecessary or desirable to carry out the purposes of this Agreement and to vest\nthe Surviving Corporation with full right, title and possession to all\nproperties, rights, privileges, immunities, powers and franchises of either of\nthe Constituent Corporations, the officers of the Surviving Corporation are\nfully authorized in the name of each Constituent Corporation or otherwise to\ntake, and shall take, all such lawful and necessary action.\n\n         1.7. The Closing. The closing of the transactions contemplated by this\nAgreement (the \"Closing\") will take place at the offices of Stradling Yocca\nCarlson &amp; Rauth, P.C., 660 Newport Center Drive, Suite 1600, Newport Beach,\nCalifornia, within three business days after the date on which the last of the\nconditions set forth in Article VI shall have been satisfied or waived, or at\nsuch other place and on such other date as is mutually agreeable to Parent and\nthe Company (the \"Closing Date\"). The Closing will be effective as of the\nEffective Time.\n\n                                   ARTICLE II\n                            CONVERSION OF SECURITIES\n\n         2.1. Conversion of Securities. At the Effective Time, by virtue of the\nMerger and without any action on the part of Parent, Merger Sub, the Company,\nthe holder of any shares of Company Common Stock (as defined below) or the\nholder of any options, warrants or other rights to acquire or receive shares of\nCompany Common Stock, the following shall occur:\n\n              (a) Conversion of Company Common Stock. At the Effective Time,\neach share of common stock, par value $.01 per share, of the Company (the\n\"Company Common Stock\") issued and outstanding immediately prior to the\nEffective Time (other than any shares of Company Common Stock to be canceled\npursuant to Section 2.1(b) and any Dissenting Shares (as defined in Section\n2.1(g) below)) will be canceled and extinguished and be converted automatically\ninto the right to receive 0.5275 shares (the \"Exchange Ratio\") of common stock,\npar value $.001 per share, of the Parent (the \"Parent Common Stock\"). All\nreferences in this Agreement to Parent Common Stock to be issued pursuant to the\nMerger shall be deemed to include the corresponding rights to purchase shares of\nParent Common Stock pursuant to the Parent SRP Plan (defined in Section 4.2\nhereof), except where the context otherwise requires.\n\n              (b) Cancellation of Company Common Stock Owned by Parent or\nCompany. At the Effective Time, all shares of Company Common Stock that are\nowned by the Company as treasury stock and each share of Company Common Stock\nowned by Parent or any direct or indirect\n\n\n                                       3\n   8\n\nwholly owned subsidiary of Parent or of the Company immediately prior to the\nEffective Time shall be canceled and extinguished without any conversion\nthereof.\n\n              (c) Company Stock Option Plans. At the Effective Time, the\nCompany's 1990 Stock Plan, 1994 Long-Term Incentive and Stock Option Plan and\nthe Company's Non-Employee Director Stock Option Plan (collectively, the\n\"Company Stock Option Plans\") and all options to purchase Company Common Stock\nthen outstanding under the Company Stock Option Plans shall be assumed by Parent\nin accordance with Section 2.2 hereof.\n\n              (d) Capital Stock of Merger Sub. At the Effective Time, each share\nof common stock, $.01 par value, of Merger Sub (\"Merger Sub Common Stock\")\nissued and outstanding immediately prior to the Effective Time shall be\nconverted into and exchanged for one validly issued, fully paid and\nnonassessable share of common stock, $.01 par value, of the Surviving\nCorporation, and the Surviving Corporation shall be a wholly owned subsidiary of\nParent. Each stock certificate of Merger Sub evidencing ownership of any such\nshares shall continue to evidence ownership of such shares of capital stock of\nthe Surviving Corporation.\n\n              (e) Adjustments to Exchange Ratio. The Exchange Ratio shall be\nadjusted in the event of (i) any stock split, reverse split, stock dividend\n(including any dividend or distribution of securities convertible into Parent\nCommon Stock or Company Common Stock), reorganization, recapitalization,\ncombination, exchange of shares, adjustment or other like change with respect to\nParent Common Stock or Company Common Stock occurring after the date hereof and\nprior to the Effective Time or (ii) any increase in the number of shares of\nCompany Common Stock on a fully diluted, as-converted basis (i.e., assuming\nissuance of all shares of Common Stock issuable upon the exercise or conversion\nof all securities outstanding immediately prior to the Effective Time which are\nconvertible into or exercisable for shares of Company Common Stock, whether or\nnot vested), other than increases resulting from transactions permitted in\nSection 5.1 hereof, so as to provide holders of Company Common Stock and Parent\nthe same economic effect as contemplated by this Agreement prior to such stock\nsplit, reverse split, stock dividend, reorganization, recapitalization,\ncombination, exchange of shares, adjustment or like change or increase.\n\n              (f) Fractional Shares. No fraction of a share of Parent Common\nStock will be issued, but in lieu thereof each holder of shares of Company\nCommon Stock who would otherwise be entitled to a fraction of a share of Parent\nCommon Stock (after aggregating all fractional shares of Parent Common Stock to\nbe received by such holder) shall receive from Parent an amount of cash without\ninterest (rounded to the nearest whole cent) equal to the product of (i) such\nfraction, multiplied by (ii) the closing sale price for a share of Parent Common\nStock on the Nasdaq National Market on the trading day immediately prior to the\nEffective Time.\n\n              (g) Dissenting Shares. (i) Notwithstanding anything in this\nAgreement to the contrary, if Section 302A.471 of the MCBA shall be applicable\nto the Merger, shares of Company Common Stock that are issued and outstanding\nprior to the Effective Date and which are held by shareholders who (A) have not\nvoted such shares in favor of the Merger, (B) shall have delivered, prior to any\nvote on the Merger, a written demand for the fair value of such shares in the\nmanner provided in Section 302A.473 of the MBCA and (C) as of the Effective\nTime, shall not have effectively withdrawn or lost such right to dissenters'\nrights (\"Dissenting Shares\"), shall not be converted into or represent a right\nto receive the shares of Parent Common Stock pursuant to Section 2.1 hereof, but\nthe holders thereof shall be entitled only to such rights as are granted by\nSection 302A.473 of the MBCA. Each holder of Dissenting Shares who becomes\nentitled to\n\n\n                                       4\n   9\n\npayment for such shares pursuant to Sections 302A.471 and 302A.473 of the MBCA\nshall receive payment therefor from the Surviving Corporation in accordance with\nthe MBCA; provided, however, that if any such holder of Dissenting Shares shall\nhave effectively withdrawn such holder's demand for appraisal of such shares or\nlost such holder's right to appraisal and payment of such shares under Section\n302A.473 of the MBCA, such holder or holders (as the case may be) shall forfeit\nthe right of appraisal of such shares and each such share shall thereupon be\ndeemed to have been canceled, extinguished and converted, as of the Effective\nTime, into and represent the right to receive payment from the Surviving\nCorporation of the applicable shares of Parent Common Stock, as provided in\nSection 2.1 hereof.\n\n                  (ii) The Company shall give Parent (A) prompt notice of any\nwritten demand for fair value, any withdrawal of a demand for fair value and any\nother instrument served pursuant to Section 302A.473 of the MBCA received by the\nCompany, and (B) the opportunity to direct all negotiations and proceedings with\nrespect to demands for fair value under Section 302A.473 of the MBCA. The\nCompany shall not, except with the prior written consent of Parent, voluntarily\nmake any payment with respect to any demand for fair value or offer to settle or\nsettle any such demand.\n\n         2.2. Stock Options.\n\n              (a) At the Effective Time, each outstanding option to purchase\nshares of Company Common Stock under the Company Stock Option Plans (each, a\n\"Company Option\"), whether vested or unvested immediately prior to the Effective\nTime, shall be assumed by Parent and converted into an option (each, a \"Parent\nOption\") to acquire, on substantially the same terms and conditions, including\nbut not limited to any performance criteria with respect to the Company's\nbusiness operations set forth in the applicable stock option agreements as were\napplicable under such Company Option, the number of whole shares of Parent\nCommon Stock equal to the number of shares of Company Common Stock that were\nissuable upon exercise of such Company Option immediately prior to the Effective\nTime multiplied by the Exchange Ratio, as adjusted pursuant to Section 2.1(e)\nabove (rounded down to the nearest whole number of shares of Parent Common\nStock), and the per share exercise price of the shares of Parent Common Stock\nissuable upon exercise of such Parent Option shall be equal to the exercise\nprice per share of Company Common Stock at which such Company Option was\nexercisable immediately prior to the Effective Time divided by the Exchange\nRatio, as adjusted pursuant to Section 2.1(e) above (rounded up to the nearest\nwhole cent). Other than pursuant to the terms of existing commitments (all of\nwhich commitments are identified in Section 2.2 of the Company Disclosure Letter\n(as defined in the preamble to Article III hereof)), the Company shall not, and\nshall cause any Company Stock Option Plan administrator not to, take any action\nprior to the Effective Time that will extend the exercise period of any Company\nOption or cause the vesting period of any Company Option to accelerate under any\ncircumstances, regardless of whether such circumstances are to occur before or\nafter the Effective Time, or otherwise amend the terms of outstanding Company\nOptions.\n\n              (b) All outstanding rights of the Company which it may hold\nimmediately prior to the Effective Time to repurchase unvested shares of Company\nCommon Stock (the \"Repurchase Options\") shall continue in effect following the\nMerger and shall continue to be exercisable by the Parent upon the same terms\nand conditions in effect immediately prior to the Effective Time, except that\nthe shares purchasable pursuant to the Repurchase Options and the purchase price\nper shall be adjusted to reflect the conversion to Parent Common Stock and the\nExchange Ratio.\n\n\n                                       5\n   10\n\n              (c) Parent shall take all corporate action necessary to reserve\nfor issuance a sufficient number of shares of Parent Common Stock for delivery\nupon exercise of the Parent Options and to file all documents required to be\nfiled to cause the shares of Parent Common Stock issuable upon exercise of the\nParent Options to be listed on the Nasdaq National Market. As soon as\npracticable after the Effective Time, but no later than five business days after\nthe Effective Time, Parent shall file a registration statement with the U.S.\nSecurities and Exchange Commission (the \"SEC\") on Form S-8 (or any successor\nform) or another appropriate form with respect to the Parent Common Stock\nsubject to such Parent Options, and shall use all commercially reasonable best\nefforts to maintain the effectiveness of such registration statement or\nregistration statements (and maintain the current status of the prospectus or\nprospectuses contained therein) for so long as such Parent Options remain\noutstanding. As soon as practicable after the Effective Time, Parent shall\ninform in writing the holders of Company Options of their rights pursuant to the\nCompany Stock Option Plans and the agreements evidencing the grants of such\nCompany Options shall continue in effect on the same terms and conditions\n(subject to the adjustments required by Section 2.2(a) hereof), after giving\neffect to the Merger and the assumption by Parent of the Company Options as set\nforth herein.\n\n              (d) In the case of any Company Option to which Section 421 of the\nCode applies by reason of Section 422 of the Code (\"Incentive Stock Options\"),\nthe option exercise price, the number of shares of Parent Common Stock\npurchasable pursuant to such option and the terms and conditions of exercise of\nsuch option shall be determined in order to comply with Section 424(a) of the\nCode.\n\n              (e) Parent will make good faith efforts to ensure, to the extent\npermitted by the Code and to the extent required by and subject to the terms of\nany such Incentive Stock Options, that Company Options which qualified as\nIncentive Stock Options prior to the Closing Date continue to qualify as\nIncentive Stock Options of Parent after the Closing.\n\n         2.3. Warrants. At the Effective Time, each warrant to purchase shares\nof Company Common Stock outstanding immediately prior to the Effective Date\n(each, a \"Company Warrant\") shall be assumed by Parent and converted into a\nwarrant (each a \"Parent Warrant\") to acquire, on substantially the same terms\nand conditions, the number of whole shares of Parent Common Stock equal to the\nnumber of shares of Company Common Stock that were issuable upon exercise of\nsuch Company Warrant immediately prior to the Effective Time multiplied by the\nExchange Ratio, as adjusted pursuant to Section 2.1(e) above (rounded down to\nthe nearest whole number of shares of Parent Common Stock), and the per share\nexercise price of the shares of the Parent Common Stock issuable upon exercise\nof such Parent Warrant shall be equal to the exercise price per share of Company\nCommon Stock at which such Company Warrant was exercisable immediately prior to\nthe Effective Time divided by the Exchange Ratio, as adjusted pursuant to\nSection 2.1(e) above (rounded up to the nearest whole cent). Other than pursuant\nto the terms of existing commitments (all of which commitments are identified in\nSection 2.3 of the Company Disclosure Letter), the Company shall not take any\naction prior to the Effective Time that will extend the exercise period of any\nCompany Warrant or otherwise amend the terms of outstanding Company Warrants.\n\n         2.4. Employee Stock Purchase Plan. The parties acknowledge that the\nCompany's 1995 Employee Stock Purchase Plan, as amended (the \"ESPP\"), shall\ncontinue to operate in accordance with its terms following the execution of this\nAgreement, except as provided below. Unless previously terminated, effective as\nof the date of approval of the Merger by the shareholders of the Company, each\noutstanding purchase right to be exercised in accordance with the ESPP, the\nCompany shall cause the ESPP to terminate, and no purchase rights shall be\nsubsequently granted or\n\n\n                                       6\n   11\n\nexercised under the ESPP. The Company shall take all actions necessary to ensure\nthat the ESPP will not be amended or modified in any respect after the date\nhereof, except to effect the terms of this Section 2.4. Notwithstanding the\nforegoing, the Company shall cause such amendments to be made to the ESPP such\nthat, following such amendments, the operation of the ESPP will not cause\n\"pooling-of-interests\" accounting treatment to be unavailable for the\ntransactions contemplated by the Agreement.\n\n         2.5. Exchange of Certificates.\n\n              (a) Prior to the Effective Time, Parent shall designate a\ncommercial bank, trust company or other financial institution, which may include\nParent's stock transfer agent, to act as exchange agent (\"Exchange Agent\") in\nthe Merger.\n\n              (b) Promptly after the Effective Time, Parent shall make available\nto the Exchange Agent for exchange in accordance with this Article II, (i) the\naggregate number of shares of Parent Common Stock issuable pursuant to Section\n2.1 in exchange for outstanding shares of Company Common Stock, and (ii) cash in\nan amount sufficient to permit payment of cash in lieu of fractional shares\npursuant to Section 2.1(f) (the \"Exchange Fund\").\n\n              (c) Promptly, and in any event no later than ten business days\nafter the Effective Time, the Parent shall cause to be mailed to each holder of\nrecord of a certificate or certificates which immediately prior to the Effective\nTime represented outstanding shares of Company Common Stock (the \"Certificates\")\n(i) a letter of transmittal (which shall specify that delivery shall be\neffected, and risk of loss and title to the Certificates shall pass, only upon\nproper delivery of the Certificates to the Exchange Agent, and shall be in such\nform and have such other provisions as Parent may reasonably specify and which\nshall be reasonably acceptable to the Company) and (ii) instructions for use in\neffecting the surrender of the Certificates in exchange for certificates\nrepresenting shares of Parent Common Stock (and cash in lieu of fractional\nshares). Upon surrender of a Certificate for cancellation to the Exchange Agent,\ntogether with such letter of transmittal, duly completed and validly executed,\nand such other documents as may be reasonably required pursuant to such\ninstructions, the holder of such Certificate shall be entitled to receive in\nexchange a certificate representing the number of whole shares of Parent Common\nStock, plus cash in lieu of fractional shares in accordance with Section 2.1(f),\nto which such holder is entitled pursuant to Section 2.1, and the Certificate so\nsurrendered shall forthwith be canceled. Until surrendered as contemplated by\nthis Section 2.5, each Certificate that, prior to the Effective Time,\nrepresented shares of Company Common Stock will be deemed from and after the\nEffective Time, for all corporate purposes, other than the payment of dividends,\nto evidence the right to receive the number of full shares of Parent Common\nStock into which such shares of Company Common Stock shall have been so\nconverted and the right to receive an amount of cash in lieu of the issuance of\nany fractional shares in accordance with Section 2.1(f).\n\n              (d) No dividends or other distributions declared or made after the\nEffective Time with respect to Parent Common Stock with a record date after the\nEffective Time will be paid to the holder of any unsurrendered Certificate with\nrespect to the shares of Parent Common Stock represented thereby until the\nholder of record of such Certificate shall surrender such Certificate. Subject\nto applicable law, following surrender of any such Certificate, there shall be\npaid to the record holder of the certificates representing whole shares of\nParent Common Stock issued in exchange therefor, without interest, at the time\nof such surrender, the amount of dividends or other\n\n\n                                       7\n   12\n\ndistributions with a record date after the Effective Time theretofore paid with\nrespect to such whole shares of Parent Common Stock.\n\n              (e) None of Parent, the Surviving Corporation or the Exchange\nAgent shall be liable to any holder of shares of Company Common Stock for any\namount properly delivered to a public official in compliance with any abandoned\nproperty, escheat or similar law.\n\n              (f) At the Effective Time, the stock transfer books of the Company\nshall be closed and there shall be no further registration of transfers of\nshares of Company Common Stock thereafter on the records of the Company. From\nand after the Effective Time, the holders of certificates representing shares of\nCompany Common Stock outstanding immediately prior to the Effective Time shall\ncease to have any rights with respect to such shares of Company Common Stock\nexcept as otherwise provided in this Agreement or by law.\n\n              (g) Subject to any applicable escheat or similar laws, any portion\nof the Exchange Fund that remains unclaimed by the former shareholders of the\nCompany for one year after the Effective Time shall be delivered by the Exchange\nAgent to Parent, upon demand of Parent, and any former shareholders of the\nCompany shall thereafter look only to Parent for satisfaction of their claim for\ncertificates representing shares of Parent Common Stock in exchange for their\nshares of Company Common Stock pursuant to the terms of Section 2.1 hereof.\n\n              (h) If any Certificate shall have been lost, stolen or destroyed,\nupon the making of an affidavit of that fact, in form and substance reasonably\nacceptable to the Exchange Agent, by the person claiming such Certificate to be\nlost, stolen or destroyed, and complying with such other conditions as the\nExchange Agent may reasonably impose (including the execution of an\nindemnification undertaking or the posting of an indemnity bond or other surety\nin favor of the Exchange Agent and Parent with respect to the Certificate\nalleged to be lost, stolen or destroyed), the Exchange Agent will deliver to\nsuch person, such shares of Parent Common Stock and cash in lieu of fractional\nshares, if any, as may be required pursuant to Section 2.1.\n\n                                  ARTICLE III\n                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\n         The Company represents and warrants to Merger Sub and Parent that the\nstatements contained in this Article III are true and correct, except as set\nforth in the letter delivered by the Company to Merger Sub on the date hereof\n(the \"Company Disclosure Letter\") (which Company Disclosure Letter sets forth\nthe exceptions to the representations and warranties contained in this Article\nIII under captions referencing the Sections to which such exceptions apply):\n\n         3.1. Organization and Qualification. Each of the Company and its\nSubsidiaries (as defined below) is a company duly incorporated, validly existing\nand, if applicable, in good standing under the laws of the jurisdiction of its\nincorporation and each such entity has all requisite corporate power and\nauthority to own, lease and operate its properties and to carry on its business\nas now being conducted. Each of the Company and its Subsidiaries is duly\nqualified or licensed to carry on its business as it is now being conducted, and\nis qualified to conduct business, in each jurisdiction where the character of\nits properties owned or leased or the nature of its activities makes such\nqualification necessary, except for failures to be so qualified that would not,\nindividually or in the aggregate, have a Company Material Adverse Effect (as\ndefined below). Neither the Company nor any of its Subsidiaries is in violation\nof any of the provisions of its Articles of Incorporation or other applicable\n\n\n                                       8\n   13\n\ncharter document (any such document of any business entity hereinafter referred\nto as its \"Charter Document\") or its Bylaws, or other applicable organizational\ndocument (any such documents of any business entity hereinafter referred to as\nits \"Governing Document\"). The Company has delivered to Merger Sub accurate and\ncomplete copies of the respective Charter Documents and Governing Documents, as\ncurrently in effect, of each of the Company and its Subsidiaries. As used in\nthis Agreement, the term \"Company Material Adverse Effect\" means any change,\neffect, event or condition that (i) has a material adverse effect on the assets,\nbusiness or financial condition of the Company and its Subsidiaries, taken as a\nwhole (other than any such change, effect, event or condition that arises as a\nresult of the transactions contemplated hereby), or (ii) would prevent or\nmaterially impair the Company's ability to consummate the transactions\ncontemplated hereby. As used in this Agreement, the term \"Subsidiary\" when used\nwith respect to any party means any corporation or other organization, whether\nincorporated or unincorporated, of which such party directly or indirectly owns\nor controls at least a majority of the securities or other interests having by\ntheir terms ordinary voting power to elect a majority of the board of directors\nor others performing similar functions.\n\n         3.2. Capital Stock of Subsidiaries. Neither the Company nor any of its\nSubsidiaries owns, controls or holds with the power to vote, directly or\nindirectly, of record, beneficially or otherwise, any share of capital stock or\nany equity or ownership interest in any company, corporation, partnership,\nassociation, joint venture, business, trust or other entity, except for the\nSubsidiaries described in the Company SEC Reports (as defined in Section 3.6(a)\nhereof) or listed in Section 3.2 of the Company Disclosure Letter, and except\nfor ownership of securities in any publicly traded company held for investment\nby the Company or any of its Subsidiaries and comprising less than five percent\nof the outstanding stock of such company. Except as set forth in Section 3.2 of\nthe Company Disclosure Letter, the Company is directly or indirectly the record\nand beneficial owner of all of the outstanding shares of capital stock of each\nof its Subsidiaries and no equity securities of any of such Subsidiaries are or\nmay be required to be issued by reason of any options, warrants, scrip, rights\nto subscribe for, calls or commitments of any character whatsoever relating to,\nor securities or rights convertible into or exchangeable for, shares of any\ncapital stock of any such Subsidiary, and there are no contracts, commitments,\nunderstandings or arrangements by which the Company or any such Subsidiary is\nbound to issue, transfer or sell any shares of such capital stock or securities\nconvertible into or exchangeable for such shares. Other than as set forth in\nSection 3.2 of the Company Disclosure Letter, all of such shares so owned by the\nCompany are validly issued, fully paid and nonassessable and are owned by it\nfree and clear of any claim, lien, pledge, security interest or other\nencumbrance of any kind (collectively \"Liens\") with respect thereto other than\nrestrictions on transfer pursuant to applicable securities laws.\n\n         3.3. Capitalization. The authorized capital stock of the Company\nconsists of 40,000,000 shares of Company Common Stock, $.01 par value per share,\nand 5,000,000 shares of preferred stock, $.01 par value per share (of which\n400,000 shares are designated Series D Junior Participating Preferred Stock)\n(the \"Company Preferred Stock\"). As of the close of business on May 5, 2000 (the\n\"Company Measurement Date\"), (a) 29,289,786 shares of Company Common Stock were\nissued and outstanding, (b) no shares of Company Preferred Stock were issued and\noutstanding, (c) the Company had no shares of Company Common Stock held in its\ntreasury, (d) 4,621,887 shares of Company Common Stock were reserved for\nissuance under the Company Stock Option Plans and the ESPP, (e) Company Options\nto purchase 3,387,419 shares of Company Common Stock in the aggregate had been\ngranted and remained outstanding under the Company Stock Option Plans, (f)\nCompany Warrants to purchase 1,505,169 shares of Company Common Stock were\noutstanding, (g) rights (the \"Preferred Rights\") to purchase 292,898 shares of\nSeries D Junior Participating\n\n\n                                       9\n   14\n\nPreferred Stock pursuant to the Company Rights Agreement (as defined in Section\n3.25) were issued and outstanding, and (h) except for the Company Options,\nCompany Warrants, Preferred Rights and rights to the issuance of shares of\nCompany Common Stock under the ESPP, there were no outstanding Rights (defined\nbelow). Except as permitted by Section 5.1(b), since the Company Measurement\nDate, no additional shares in the Company have been issued and no Rights have\nbeen granted. Except as described in the preceding sentence or as set forth in\nSection 3.3 of the Company Disclosure Letter, the Company has no outstanding\nbonds, debentures, notes or other securities or obligations the holders of which\nhave the right to vote or which are convertible into or exercisable for\nsecurities having the right to vote on any matter on which any shareholder of\nthe Company has a right to vote. All issued and outstanding shares of Company\nCommon Stock are duly authorized, validly issued, fully paid, nonassessable and\nfree of preemptive rights. There are not as of the date hereof any existing\noptions, warrants, stock appreciation rights, stock issuance rights, calls,\nsubscriptions, convertible securities or other rights which obligate the Company\nor any of its Subsidiaries to issue, exchange, transfer or sell any shares of\nthe capital stock of the Company or any of its Subsidiaries, other than rights\nto purchase shares of Series D Junior Participating Preferred Stock pursuant to\nthe Company Rights Agreement, Company Common Stock issuable under the Company\nStock Option Plans, Company Warrants, Preferred Rights and the ESPP, or awards\ngranted pursuant thereto (collectively, \"Rights\"). As of the date hereof, there\nare no outstanding contractual obligations of the Company or any of its\nSubsidiaries to repurchase, reprice, redeem or otherwise acquire any shares of\nthe capital stock of the Company or any of its Subsidiaries. As of the date\nhereof, there are no outstanding contractual obligations of the Company to vote\nor to dispose of any shares of the capital stock of any of its Subsidiaries.\n\n         3.4. Authority Relative to this Agreement. The Company has the\nrequisite corporate power and authority to execute and deliver, and perform its\nobligations under, this Agreement and the Company Option Agreement and, subject\nto obtaining the necessary approval of its shareholders, to consummate the\nMerger and the other transactions contemplated hereby and thereby under\napplicable law. The execution and delivery of this Agreement and the Company\nOption Agreement and the consummation of the Merger and other transactions\ncontemplated hereby and thereby have been duly and validly authorized by the\nBoard of Directors of the Company and no other corporate proceedings on the part\nof the Company are necessary to authorize this Agreement or the Company Option\nAgreement or to consummate the Merger or other transactions contemplated hereby\nand thereby (other than approval by the Company's shareholders required by\napplicable law). This Agreement and the Company Option Agreement have been duly\nand validly executed and delivered by the Company and, assuming the due\nauthorization, execution and delivery hereof by Parent and Merger Sub, each\nconstitutes a valid and binding agreement of the Company, enforceable against\nthe Company in accordance with its terms, except to the extent that its\nenforceability may be limited by applicable bankruptcy, insolvency,\nreorganization, moratorium or other laws affecting the enforcement of creditors\nrights generally or by general equitable principles.\n\n         3.5. No Conflict; Required Filings and Consents.\n\n              (a) Assuming that all filings, permits, authorizations, consents\nand approvals or waivers thereof have been duly made or obtained as contemplated\nby Section 3.5(b) hereof, neither the execution and delivery of this Agreement\nor the Company Option Agreement by the Company nor the consummation of the\nMerger or other transactions contemplated hereby or thereby nor compliance by\nthe Company with any of the provisions hereof will (i) violate, conflict with,\nor result in a breach of any provision of, or constitute a default (or an event\nwhich, with notice or lapse of time or both, would constitute a default) under,\nor result in the termination or suspension of, or accelerate\n\n\n                                       10\n   15\n\nthe performance required by, or result in a right of termination or acceleration\nunder, or result in the creation of any Lien upon any of the properties or\nassets of the Company or any of its Subsidiaries under, any of the terms,\nconditions or provisions of (x) their respective Charter Documents or Governing\nDocuments, (y) any note, bond, charge, lien, pledge, mortgage, indenture or deed\nof trust to which the Company or any such Subsidiary is a party or to which they\nor any of their respective properties or assets may be subject, or (z) any\nlicense, lease, agreement or other instrument or obligation to which the Company\nor any such Subsidiary is a party or to which they or any of their respective\nproperties or assets may be subject, or (ii) violate any judgment, ruling,\norder, writ, injunction, decree, statute, rule or regulation applicable to the\nCompany or any of its Subsidiaries or any of their respective properties or\nassets, except, in the case of clauses (i) (y) and (z) and (ii) above, for such\nviolations, conflicts, breaches, defaults, terminations, suspensions,\naccelerations, rights of termination or acceleration or creations of liens,\nsecurity interests, charges or encumbrances which would not, individually or in\nthe aggregate, have a Company Material Adverse Effect.\n\n              (b) No filing or registration with or notification to and no\npermit, authorization, consent or approval of any court, commission,\ngovernmental body, regulatory authority, agency or tribunal wherever located (a\n\"Governmental Entity\") is required to be obtained, made or given by the Company\nin connection with the execution and delivery of this Agreement or the Company\nOption Agreement or the consummation by the Company of the Merger or other\ntransactions contemplated hereby or thereby except (i) (A) the filing of the\nArticles of Merger as provided in Section 1.3 hereof, (B) in connection with the\napplicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of\n1976, as amended (the \"HSR Act\"), (C) the filing of the Joint Proxy\nStatement\/Prospectus (as defined in Section 3.26 hereof) and such reports under\nSections 13(a), 13(d), 15(d) or 16(a) with the SEC in accordance with the\nSecurities Exchange Act of 1934, as amended, and the rules and regulations\npromulgated thereunder (the \"Exchange Act\") and the Securities Act of 1933, as\namended, and the rules and regulations promulgated thereunder (the \"Securities\nAct\"), as may be required in connection with this Agreement, the Company Option\nAgreement and the transactions contemplated hereby or thereby, or (D) such\nconsents, approvals, orders, authorizations, registrations, declarations and\nfilings as may be required under applicable state securities laws and the laws\nof any country other than the United States, or (ii) where the failure to obtain\nany such consents, approvals, authorizations or permits, or to make such filings\nor notifications, would not, individually or in the aggregate, have a Company\nMaterial Adverse Effect.\n\n         3.6. SEC Filings; Financial Statements.\n\n              (a) The Company has filed all forms, reports, schedules,\nstatements and other documents required to be filed by it since January 1, 1997\nto the date hereof (collectively, as supplemented and amended since the time of\nfiling, the \"Company SEC Reports\") with the SEC. The Company SEC Reports (i)\nwere prepared in all material respects with all applicable requirements of the\nSecurities Act and the Exchange Act, as the case may be and (ii) did not at the\ntime they were filed contain any untrue statement of a material fact or omit to\nstate any material fact required to be stated therein or necessary in order to\nmake the statements therein, in light of the circumstances under which they were\nmade, not misleading. The representation in clause (ii) of the preceding\nsentence does not apply to any misstatement or omission in any Company SEC\nReport filed prior to the date of this Agreement which was superseded by a\nsubsequent Company SEC Report filed prior to the date of this Agreement. No\nSubsidiary of the Company is required to file any report, form or other document\nwith the SEC.\n\n\n                                       11\n   16\n\n              (b) The audited consolidated financial statements and unaudited\nconsolidated interim financial statements of the Company and its Subsidiaries\nincluded or incorporated by reference in such Company SEC Reports (collectively,\nthe \"Financial Statements\") have been prepared in accordance with United States\ngenerally accepted accounting principles applied on a consistent basis during\nthe periods involved (except as may be otherwise indicated in the notes thereto)\nand present fairly, in all material respects, the financial position and results\nof operations and cash flows of the Company and its Subsidiaries on a\nconsolidated basis at the respective dates and for the respective periods\nindicated (except, in the case of all such financial statements that are interim\nfinancial statements, for footnotes and normal year-end adjustments).\n\n              (c) Neither the Company nor any of its Subsidiaries has any\nliabilities or obligations of any nature, whether absolute, accrued, unmatured,\ncontingent or otherwise whether due or to become due, known or unknown, or any\nunsatisfied judgments or any leases of personalty or realty or unusual or\nextraordinary commitments that are required to be shown on the face of a balance\nsheet or disclosed in notes to financial statements under United States\ngenerally accepted accounting principles, except (i) liabilities recorded on the\nCompany's balance sheet at December 31, 1999 (the \"Balance Sheet\") included in\nthe financial statements referred in Section 3.6(a) hereof and the notes\nthereto, or (ii) liabilities or obligations incurred since December 31, 1999\n(whether or not incurred in the ordinary course of business and consistent with\npast practice) that would not, individually or in the aggregate, have a Company\nMaterial Adverse Effect.\n\n         3.7. Absence of Changes or Events. Except as set forth in Section 3.7\nof the Company Disclosure Letter or in the Company SEC Reports, since December\n31, 1999 through the date of this Agreement, the Company and its Subsidiaries\nhave not incurred any liability or obligation that has resulted or would\nreasonably be expected to result in a Company Material Adverse Effect, and there\nhas not been any change in the business, financial condition or results of\noperations of the Company or any of its Subsidiaries which has had, or would\nreasonably be expected to have, individually or in the aggregate, a Company\nMaterial Adverse Effect, and the Company and its Subsidiaries have conducted\ntheir respective businesses in the ordinary course consistent with their past\npractices.\n\n         3.8. Litigation. Except as disclosed in the Company SEC Reports or as\nset forth in Section 3.8 of the Company Disclosure Letter, there is no (a)\nclaim, action, suit or proceeding pending or, to the Knowledge (as defined in\nSection 8.6 hereof) of the Company or any of its Subsidiaries, threatened\nagainst or relating to the Company or any of its Subsidiaries, or (b)\noutstanding judgment, order, writ, injunction or decree (collectively,\n\"Orders\"), or application, request or motion therefor, in a proceeding to which\nthe Company, any Subsidiary of the Company or any of their respective assets was\nor is a party except actions, suits, proceedings or Orders that, individually or\nin the aggregate, has not had or would not reasonably be expected to have a\nCompany Material Adverse Effect, and neither the Company nor any Subsidiary is\nin default in any material respect with respect to any such Order.\n\n         3.9. Title to Properties. The Company does not own any real property.\nThe Company has heretofore made available to Parent correct and complete copies\nof all leases, subleases and other agreements (collectively, the \"Real Property\nLeases\") under which the Company or any of its Subsidiaries uses or occupies or\nhas the right to use or occupy, now or in the future, any real property or\nfacility (the \"Leased Real Property\"), including without limitation all\nmodifications, amendments and supplements thereto. Except in each case where the\nfailure would not, individually or in the aggregate, have a Company Material\nAdverse Effect or except as otherwise set forth in Section 3.9 of the Company\nDisclosure Letter, (i) the Company or one of its Subsidiaries has a valid\nleasehold\n\n\n                                       12\n   17\n\ninterest in each parcel of Leased Real Property free and clear of all Liens\nexcept liens of record and other permitted liens and each Real Property Lease is\nin full force and effect, (ii) all rent and other sums and charges due and\npayable by the Company or its Subsidiaries as tenants thereunder are current in\nall material respects, (iii) no termination event or condition or uncured\ndefault of a material nature on the part of the Company or any such Subsidiary\nor, to the Knowledge of the Company or any such Subsidiary, the landlord, exists\nunder any Real Property Lease, (iv) the Company or one of its Subsidiaries is in\nactual possession of each Leased Real Property and is entitled to quiet\nenjoyment thereof in accordance with the terms of the applicable Real Property\nLease and applicable law, and (v) the Company and its Subsidiaries own outright\nall of the personal property (except for leased property or assets for which it\nhas a valid and enforceable right to use) which is reflected on the Balance\nSheet, except for property since sold or otherwise disposed of in the ordinary\ncourse of business and consistent with past practice and except for liens of\nrecord and other permitted liens. Except where the failure would not,\nindividually or in the aggregate, have a Company Material Adverse Effect, the\nplant, property and equipment of the Company and its Subsidiaries that are used\nin the operations of their businesses are in good operating condition and\nrepair, subject to ordinary wear and tear, and, subject to normal maintenance,\nare available for use.\n\n         3.10. Certain Contracts. Neither the Company nor any of its\nSubsidiaries has breached, or received in writing any claim or notice that it\nhas breached, any of the terms or conditions of (i) any agreement, contract or\ncommitment required to be filed as an exhibit to the Company SEC Reports\n(including any agreements, contracts or commitments entered into since December\n31, 1999 that will be required to be filed by the Company with the SEC in any\nreport), (ii) any agreements, contracts or commitments with manufacturers,\nsuppliers, sales representatives, distributors, or OEM strategic partners of the\nCompany pursuant to which the Company recognized revenues or payments in excess\nof $200,000 for the twelve-month period ended December 31, 1999, or (iii) any\nagreements, contracts or commitments containing covenants that limit the ability\nof the Company or any of its Subsidiaries to compete in any line of business or\nwith any Person (as defined in Section 8.6 hereof), or that include any\nexclusivity provision or involve any restriction on the geographic area in which\nthe Company or any of its Subsidiaries may carry on its business (collectively,\n\"Company Material Contracts\"), in such a manner as, individually or in the\naggregate, has had or would reasonably be expected to have a Company Material\nAdverse Effect. Section 3.10 of the Company Disclosure Letter lists each Company\nMaterial Contract described in clauses (ii) and (iii) of the preceding sentence.\nEach Company Material Contract that has not expired by its terms is in full\nforce and effect and is the legal, valid and binding obligation of the Company\nand\/or its Subsidiaries, enforceable against them in accordance with its terms,\nsubject to applicable bankruptcy, insolvency, reorganization, moratorium and\nsimilar laws affecting creditors rights and remedies generally and subject, as\nto enforceability, to general principles of equity (regardless of whether\nenforcement is sought in a proceeding at law or in equity), except where the\nfailure of such Company Material Contract to be in full force and effect or to\nbe legal, valid, binding or enforceable against the Company and\/or its\nSubsidiaries has not had and would not, individually or in the aggregate,\nreasonably be expected to have a Company Material Adverse Effect. Except as set\nforth in Section 3.10 of the Company Disclosure Letter, no consent, approval,\nwaiver or authorization of, or notice to any Person is needed in order that each\nsuch Company Material Contract shall continue in full force and effect in\naccordance with its terms without penalty, acceleration or rights of early\ntermination by reason of the consummation of the Merger and the other\ntransactions contemplated by this Agreement.\n\n         3.11. Compliance with Law. Except where the failure would not have a\nCompany Material Adverse Effect, all activities of the Company and its\nSubsidiaries have been, and are currently being,\n\n\n                                       13\n   18\n\nconducted in compliance in all material respects with all applicable United\nStates federal, state, provincial and local and other foreign laws, ordinances,\nregulations, interpretations, judgments, decrees, injunctions, permits,\nlicenses, certificates, governmental requirements, and Orders of any court or\nother Governmental Entity or any nongovernmental self-regulatory agency, and no\nnotice has been received by the Company or any Subsidiary of any claims filed\nagainst the Company or any Subsidiary alleging a violation of any such laws,\nregulations or other requirements which would be required to be disclosed in any\nCompany SEC Report or any New SEC Report (as defined in Section 5.18 hereof).\nThe Company Stock Option Plans and the ESPP have been duly authorized, approved\nand operated in compliance in all material respects with all applicable\nsecurities, corporate and other laws of each jurisdiction in which participants\nof such plans are located. The Company and its Subsidiaries have all permits,\nlicenses and franchises from Governmental Entities required to conduct their\nbusinesses as now being conducted, except for such permits, licenses and\nfranchises the absence of which has not had and would not, individually or in\nthe aggregate, have a Company Material Adverse Effect.\n\n         3.12. Intellectual Property Rights; Year 2000.\n\n              (a) The Company and its Subsidiaries own, or are validly licensed\nor otherwise possess legally enforceable rights to use, all patents, trademarks,\ntrade names, service marks, domain names and copyrights, any applications for\nand registrations of such patents, trademarks, trade names, service marks,\ndomain names and copyrights, and all database rights, net lists, processes,\nformulae, methods, schematics, technology, know-how, computer software programs\nor applications and tangible or intangible proprietary information or material\nthat are necessary to conduct the business of the Company and its Subsidiaries\nas currently conducted, or presently planned to be conducted, except for such\nrights the absence of which would not be reasonably expected to have a Company\nMaterial Adverse Effect (the \"Company Intellectual Property Rights\"). The\nCompany and its Subsidiaries have taken all action reasonably necessary to\nprotect the Company Intellectual Property Rights which is customary in the\nindustry, including without limitation, use of reasonable secrecy measures to\nprotect the trade secrets included in the Company Intellectual Property Rights.\n\n              (b) The execution and delivery of this Agreement and consummation\nof the transactions contemplated hereby will not result in the breach of, or\ncreate on behalf of any third party the right to terminate or modify, any\nmaterial license, sublicense or other agreement relating to the Company\nIntellectual Property Rights, or any material licenses, sublicenses or other\nagreements as to which the Company or any of its Subsidiaries is a party and\npursuant to which the Company or any of its Subsidiaries is authorized to use\nany third party patents, trademarks, copyrights or trade secrets (\"Company Third\nParty Intellectual Property Rights\"), including software that is used in the\nmanufacture of, incorporated in, or forms a part of any product sold by or\nexpected to be sold by the Company or any of its Subsidiaries, the breach of\nwhich would, individually or in the aggregate, be reasonably likely to have a\nCompany Material Adverse Effect. The Company Disclosure Letter, under the\ncaption referencing this Section 3.12, lists all royalties, license fees,\nsublicense fees or similar obligations requiring payment in excess of $100,000\nper year by the Company or any Subsidiary for any Company Third Party\nIntellectual Property Rights that are used in the manufacture of, incorporated\nin, or forms a part of any product sold by or expected to be sold by the Company\nor any of its Subsidiaries.\n\n              (c) All patents, registered trademarks, service marks, domain\nnames and copyrights which are held by the Company or any of its Subsidiaries,\nthe loss or invalidity of which would reasonably be expected to cause a Company\nMaterial Adverse Effect, are valid and subsisting.\n\n\n                                       14\n   19\n\nThe Company (i) has not been sued in any suit, action or proceeding, or received\nin writing any claim or notice, which involves a claim of infringement or\nmisappropriation of any patents, trademarks, service marks, domain names,\ncopyrights or violation of any trade secret or other proprietary right of any\nthird party; and (ii) has no Knowledge that the manufacturing, marketing,\nlicensing or sale of its products or services infringe upon, misappropriate or\notherwise come into conflict with any patent, trademark, service mark,\ncopyright, trade secret or other proprietary right of any third party, which\ninfringement, misappropriation or conflict in the cases of clause (i) and (ii)\nwould, individually or in the aggregate, reasonably be expected to have a\nCompany Material Adverse Effect. To the Knowledge of the Company, no other\nPerson has interfered with, infringed upon, or otherwise come into conflict with\nany Company Intellectual Property Rights or other proprietary information of the\nCompany or any of its Subsidiaries which has or would, individually or in the\naggregate, reasonably be expected to have a Company Material Adverse Effect.\n\n              (d) Except where the failure to do so would not have a Company\nMaterial Adverse Effect, each employee, agent, consultant or contractor who has\nmaterially contributed to or participated in the creation or development of any\ncopyrightable, patentable or trade secret material on behalf of the Company, any\nof its Subsidiaries or any predecessor in interest thereto either: (i) is a\nparty to an agreement under which the Company or such Subsidiary is deemed to be\nthe original owner\/author of all property rights therein; or (ii) has executed\nan assignment or an agreement to assign in favor of the Company, such Subsidiary\nor such predecessor in interest, as applicable, all right, title and interest in\nsuch material.\n\n              (e) The Company and its Subsidiaries have experienced no material\ndisruption or interruption of their business or operations as a result of or\nrelated to any of their information systems, data processing and other hardware,\nsoftware and other systems, facilities, programs and procedures used or sold by\nthe Company or any of its Subsidiaries (collectively, \"Information Systems\")\nfailing to be Y2K Compliant. \"Y2K Compliant\" means, with respect to any\nInformation System, that such Information System (i) handles date information\ninvolving any and all dates before, during and\/or after January 1, 2000,\nincluding accepting input, providing output and performing date calculations in\nwhole or in part; (ii) operates accurately without interruption on and in\nrespect of any and all dates before, during and\/or after January 1, 2000 and\nwithout any change in performance; (iii) responds to and processes two-digit\nyear input without creating any ambiguity as to the century; and (iv) stores and\nprovides date input information without creating any ambiguity as to the\ncentury, in each case without utilizing bridges, gateways and the like while\nstill preserving the level of functionality, usability, reliability, efficiency,\nperformance and accessibility of such data and associated programs as existed\nprior to any modification to such Information System and its constituent\nelements to make the same Y2K Compliant.\n\n         3.13. Taxes.\n\n              (a) \"Tax\" or \"Taxes\" shall mean all United States federal, state,\nprovincial, local or foreign taxes and any other applicable duties, levies,\nfees, charges and assessments that are in the nature of a tax, including income,\ngross receipts, property, sales, use, license, excise, franchise, ad valorem,\nvalue-added, transfer, social security payments, and health taxes and any\ndeductibles relating to wages, salaries and benefits and payments to\nsubcontractors for any jurisdiction in which the Company or any of its\nSubsidiaries does business (to the extent required under applicable Tax law),\ntogether with all interest, penalties and additions imposed with respect to such\namounts.\n\n\n                                       15\n   20\n\n              (b) Except as set forth in (or resulting from matters set forth\nin) Section 3.13 of the Company Disclosure Letter or as could not, individually\nor in the aggregate, reasonably be expected to have a Company Material Adverse\nEffect:\n\n                  (i) the Company and its Subsidiaries have prepared and timely\n         filed with the appropriate governmental agencies all franchise, income,\n         sales and all other material Tax returns and reports required to be\n         filed on or before the Effective Time (collectively \"Returns\"), taking\n         into account any extension of time to file granted to or obtained on\n         behalf of the Company and\/or its Subsidiaries;\n\n                  (ii) all Taxes of the Company and its Subsidiaries shown on\n         such Returns or otherwise known by the Company to be due or payable\n         have been timely paid in full to the proper authorities, other than\n         such Taxes as are being contested in good faith by appropriate\n         proceedings or which are adequately reserved for in accordance with\n         generally accepted accounting principles;\n\n                  (iii) all deficiencies resulting from Tax examinations of\n         income, sales and franchise and all other material Returns filed by the\n         Company and its Subsidiaries in any jurisdiction in which such Returns\n         are required to be so filed have either been paid or are being\n         contested in good faith by appropriate proceedings;\n\n                  (iv) no deficiency has been asserted or assessed against the\n         Company or any of its Subsidiaries which has not been satisfied or\n         otherwise resolved, and no examination of the Company or any of its\n         Subsidiaries is pending or, to the Knowledge of the Company, threatened\n         for any material amount of Tax by any taxing authority;\n\n                  (v) no extension of the period for assessment or collection of\n         any material Tax is currently in effect and no extension of time within\n         which to file any material Return has been requested, which Return has\n         not since been filed;\n\n                  (vi) all Returns filed by the Company and its Subsidiaries are\n         correct and complete in all material respects or adequate reserves have\n         been established with respect to any additional Taxes that may be due\n         (or may become due) as a result of such Returns not being correct or\n         complete;\n\n                  (vii) to the Knowledge of the Company, no Tax liens have been\n         filed with respect to any Taxes;\n\n                  (viii) neither the Company nor any of its Subsidiaries have\n         made since January 1, 1997, and none will make, any voluntary\n         adjustment by reason of a change in their accounting methods for any\n         pre-Merger period;\n\n                  (ix) the Company and its Subsidiaries have made timely\n         payments of the Taxes required to be deducted and withheld from the\n         wages paid to their employees;\n\n                  (x) the Company and its Subsidiaries are not parties to any\n         Tax sharing or Tax matters agreement; and\n\n                  (xi) to the Knowledge of the Company, neither the Company nor\n         any of its Subsidiaries is liable to be assessed for or made\n         accountable for any Tax for which any\n\n\n                                       16\n   21\n\n         other person or persons may be liable to be assessed or made\n         accountable whether by virtue of the entering into or the consummation\n         of the Merger or by virtue of any act or acts done by or which may be\n         done by or any circumstance or circumstances involving or which may\n         involve any other person or persons.\n\n              (c) The Company and its Subsidiaries are not parties to any\nagreement, contract, or arrangement that would, as a result of the transactions\ncontemplated hereby, result, separately or in the aggregate, in (i) the payment\nof any \"excess parachute payments\" within the meaning of Section 280G of the\nCode by reason of the Merger or (ii) the payment of any form of compensation or\nreimbursement for any Tax incurred by any Person arising under Section 280G of\nthe Code.\n\n         3.14. Employees. Neither the Company nor any of its Subsidiaries is a\nparty to any collective bargaining agreement, arrangement or labor contract with\na labor union or labor organization, whether formal or otherwise. The Company\nDisclosure Letter, under the caption referencing this Section 3.14, lists all\nemployment, severance and change of control agreements (or any other agreements\nthat may result in the acceleration of outstanding options) of the Company or\nits Subsidiaries. Each of the Company and its Subsidiaries is in compliance with\nall applicable laws (including, without limitation, all applicable extension\norders) respecting employment and employment practices, terms and conditions of\nemployment, equal opportunity, anti-discrimination laws, and wages and hours,\nexcept where such noncompliance has not had and would not, individually or in\nthe aggregate, reasonably be expected to have, a Company Material Adverse\nEffect. There is no labor strike, slowdown or stoppage pending (or, to the\nKnowledge of the Company or any of its Subsidiaries, any unfair labor practice\ncomplaints, labor disturbances or other controversies respecting employment\nwhich are pending or threatened which, if they actually occurred, would\nreasonably be expected to have a Company Material Adverse Effect) against the\nCompany or any of its Subsidiaries.\n\n         3.15. Employee Benefit Plans.\n\n              (a) \"ERISA\" means the Employee Retirement Income Security Act of\n1974, as amended, and \"Plan\" means every plan, fund, contract, program and\narrangement (whether written or not) which is maintained or contributed to by\nthe Company and its Subsidiaries for the benefit of present or former employees\nor with respect to which the Company and its Subsidiaries otherwise has current\nor potential liability. \"Plan\" includes any arrangement intended to provide: (i)\nmedical, surgical, health care, hospitalization, dental, vision, workers'\ncompensation, life insurance, death, disability, legal services, severance,\nsickness, accident, or cafeteria plan benefits (whether or not defined in\nSection 3(1) of ERISA), (ii) pension, profit sharing, stock bonus, retirement,\nsupplemental retirement or deferred compensation benefits (whether or not tax\nqualified and whether or not defined in Section 3(2) of ERISA), (iii) bonus,\nincentive compensation, stock option, stock appreciation right, phantom stock or\nstock purchase benefits, change in control benefits or (iv) salary continuation,\nunemployment, supplemental unemployment, termination pay, vacation or holiday\nbenefits (whether or not defined in Section 3(3) of ERISA). The Company\nDisclosure Letter, under the caption referencing this Section 3.15(a), sets\nforth all material Plans by name and brief description.\n\n              (b) To the extent required (either as a matter of law or to obtain\nthe intended tax treatment and tax benefits), all Plans comply and have complied\nwith the requirements of ERISA, the Code and other applicable law, except where\nsuch noncompliance would not, individually or in the aggregate, have a Company\nMaterial Adverse Effect. With respect to the Plans, (i) all required\n\n\n                                       17\n   22\n\ncontributions which are due have been made and an accrual required by generally\naccepted accounting principles has been made on the books and records of the\nCompany or its Subsidiaries for all future contribution obligations; (ii) there\nare no actions, suits or claims pending, other than routine uncontested claims\nfor benefits; and (iii) there have been no nonexempt prohibited transactions (as\ndefined in Section 406 of ERISA or Section 4975 of the Code), except for such\ntransactions, if any, which have not had and would not, individually or in the\naggregate, reasonably be expected to have, a Company Material Adverse Effect.\nExcept as otherwise disclosed in the Company Disclosure Letter under the caption\nreferencing this Section 3.15(b), all benefits under the Plans (other than Code\nSection 125 cafeteria plans) are payable either through a fully-funded trust or\nan insurance contract and no welfare benefit Plan (as defined in Section 3(1) of\nERISA) is self-funded.\n\n              (c) Parent has received true and complete copies of (i) all Plan\ndocuments, including related trust agreements or funding arrangements; (ii) the\nmost recent determination letter, if any, received by the Company or its\nSubsidiaries from the Internal Revenue Service (the \"IRS\") regarding the Plans\nand any amendment to any Plan made subsequent to any Plan amendments covered by\nany such determination letter; (iii) current summary plan descriptions; and (iv)\nannual returns\/reports on Form 5500 and summary annual reports for the most\nrecent plan year. To the Knowledge of the Company, nothing has occurred that\ncould materially adversely affect the qualification of the Plans and their\nrelated trusts under Section 401(a) of the Code.\n\n              (d) Except as set forth in Section 3.15 of the Company Disclosure\nLetter, the Company does not maintain or contribute to (and has never\ncontributed to) any multi-employer plan, as defined in Section 3(37) of ERISA.\nNeither the Company nor any of its Subsidiaries has any actual or potential\nmaterial liabilities under Title IV of ERISA, including under Section 4201 of\nERISA for any complete or partial withdrawal from a multi-employer plan.\n\n              (e) Neither the Company nor any of its Subsidiaries has any actual\nor potential material liability for death or medical benefits after separation\nfrom employment, other than (i) death benefits under the employee benefit plans\nor programs (whether or not subject to ERISA) set forth in Section 3.15 of the\nCompany Disclosure Letter and (ii) health care continuation benefits described\nin Section 4980B of the Code.\n\n              (f) Neither the Company nor any of its Subsidiaries, nor any of\ntheir respective directors, officers, employees or other \"fiduciaries\", as such\nterm is defined in Section 3(21) of ERISA, has committed any breach of fiduciary\nresponsibility imposed by ERISA or any other applicable law with respect to the\nPlans which would subject the Company, Parent or any of their respective\ndirectors, officers or employees to any liability under ERISA or any applicable\nlaw, except for such breaches, if any, which have not had and would not,\nindividual or in the aggregate, reasonably be expected to have, a Company\nMaterial Adverse Effect.\n\n              (g) There are no other trades or businesses (other than\nSubsidiaries of the Company), whether or not incorporated, which, together with\nthe Company, would be deemed to be a \"single employer\" within the meaning of\nCode Sections 414(b), (c) or (m).\n\n              (h) Except with respect to Taxes on benefits paid or provided, no\nTax has been waived or excused, has been paid or is owed by any person\n(including, but not limited to, any Plan, any Plan fiduciary or the Company)\nwith respect to the operations of, or any transactions with respect to, any Plan\nwhich would, individually or in the aggregate, reasonably be expected to have a\nCompany Material Adverse Effect. No action has been taken by the Company, nor\nhas there been\n\n\n                                       18\n   23\n\nany failure by the Company to take any action, nor is any action or failure to\ntake action contemplated by the Company (including all actions contemplated\nunder this Agreement), that would subject any person or entity to any liability\nor Tax imposed by the IRS or DOL in connection with any Plan, except for such\nliability or Tax that has not had and would not, individually or in the\naggregate, reasonably be expected to have a Company Material Adverse Effect. No\nreserve for any Taxes has been established with respect to any Plan by the\nCompany nor has any advice been given to the Company with respect to the need to\nestablish such a reserve, except for such reserves which would not, individually\nor in the aggregate, reasonably be expected to have a Company Material Adverse\nEffect.\n\n              (i) There are no (i) legal, administrative or other proceedings or\ngovernmental investigations or audits, or (ii) complaints to or by any\nGovernmental Entity, which are pending, anticipated or, to the Knowledge of the\nCompany, threatened, against any Plan or its assets, or against any Plan\nfiduciary or administrator, or against the Company or its officers or employees\nwith respect to any Plan which would, individually or in the aggregate,\nreasonably be expected to have a Company Material Adverse Effect.\n\n              (j) There are no leased employees, as defined in Section 414(n) of\nthe Code, providing services to the Company or its Subsidiaries, that must be\ntaken into account with respect to the requirements under Section 414(n)(3) of\nthe Code.\n\n              (k) Each Plan may be terminated directly or indirectly by Parent\nand the Company, in their sole discretion, at any time before or after the\nEffective Date in accordance with its terms, without causing the Parent or the\nCompany to incur any liability to any person, entity or government agency for\nany conduct, practice or omission of the Company which occurred prior to the\nEffective Date, except for (i) liabilities to, and the rights of, the employees\nthereunder accrued prior to the Effective Date, or if later, the time of\ntermination, (ii) continuation rights required by the Consolidated Omnibus\nBudget Reconciliation Act of 1985, as amended, or other applicable law, and\n(iii) liabilities which would not have a Company Material Adverse Effect.\n\n         3.16. Environmental Matters.\n\n              (a) The Company and its Subsidiaries (i) have been in compliance\nand are presently complying in all material respects with all applicable health,\nsafety and Environmental Laws (defined below), and (ii) have obtained all\nmaterial permits, licenses and authorizations which are required under all\napplicable health, safety and Environmental Laws and are in compliance in all\nmaterial respects with such permits, licenses and authorizations, except in each\ncase for such failure to comply or to obtain permits, licenses or authorizations\nthat would not, individually or in the aggregate, reasonably be expected to have\na Company Material Adverse Effect. To the Knowledge of the Company, (i) none of\nthe Leased Real Property (including without limitation soils and surface and\nground waters) are contaminated with any Hazardous Materials in quantities which\nrequire investigation or remediation under Environmental Laws, (ii) neither the\nCompany nor any of its Subsidiaries is liable for any off-site contamination,\nand (iii) there is no environmental matter which could reasonably be expected to\nexpose the Company or any of its Subsidiaries to a claim to clean-up any\nHazardous Materials or otherwise to remedy any pollution or damage at any of the\nproperties utilized in the Company's business under any Environmental Laws, that\nwould, with respect to any of (i), (ii) or (iii) above, be required to be\ndisclosed in the Company SEC Reports.\n\n\n                                       19\n   24\n\n              (b) For purposes of this Agreement, the term (i) \"Environmental\nLaws\" means all applicable United States federal, state, provincial, local and\nother foreign laws, rules, regulations, codes, ordinances, orders, decrees,\ndirectives, permits, licenses and judgments relating to pollution, contamination\nor protection of the environment (including, without limitation, all applicable\nUnited States federal, state, provincial, local and other foreign laws, rules,\nregulations, codes, ordinances, orders, decrees, directives, permits, licenses\nand judgments relating to Hazardous Materials in effect as of the date of this\nAgreement), and (ii) \"Hazardous Materials\" means any dangerous, toxic or\nhazardous pollutant, contaminant, chemical, waste, material or substance as\ndefined in or governed by any United States federal, state, provincial, local or\nother foreign law, statute, code, ordinance, regulation, rule or other\nrequirement relating to such substance or otherwise relating to the environment\nor human health or safety, including without limitation any waste, material,\nsubstance, pollutant or contaminant that might cause any injury to human health\nor safety or to the environment or might subject the Company or any of its\nSubsidiaries to any imposition of costs or liability under any Environmental\nLaw.\n\n         3.17. Insurance. The Company is adequately covered by insurance\npolicies currently in force with respect to its business and properties. Except\nas disclosed in Section 3.17 of the Company Disclosure Letter, there are no\nclaims outstanding under any insurance policy which could, individually or in\nthe aggregate, reasonably be expected to have a Company Material Adverse Effect\nand, to the Knowledge of the Company or any of its Subsidiaries, neither the\nCompany nor any of its Subsidiaries has failed to give any notice or to present\nany such claim with respect to its business under any such policy in due and\ntimely fashion, except where such failure would not, individually or in the\naggregate, reasonably be expected to have a Company Material Adverse Effect.\n\n         3.18. Foreign Corrupt Practices Act. Neither the Company nor any of its\nSubsidiaries (nor any person representing the Company or any of its\nSubsidiaries) has at any time during the last five years (a) made any payment in\nviolation of the Foreign Corrupt Practices Act or similar laws of other\ncountries where the Company engages in business, or (b) made any payment to any\nforeign, federal or state governmental officer or official, or other person\ncharged with similar public or quasi-public duties, other than payments required\nor permitted by the laws of the United States or any jurisdiction thereof.\n\n         3.19. Export Control Laws. The Company has conducted its export\ntransactions in accordance in all material respects with applicable provisions\nof United States export control laws and regulations, including but not limited\nto the Export Administration Act and implementing Export Administration\nRegulations.\n\n         3.20. Finders or Brokers. Except for such Persons as set forth in\nSection 3.20 of the Company Disclosure Letter, whose fees will be paid by the\nCompany, none of the Company, the Subsidiaries of the Company, the Board of\nDirectors of the Company (the \"Company Board\") or any member of the Company\nBoard has employed any agent, investment banker, broker, finder or intermediary\nin connection with the transactions contemplated hereby who might be entitled to\na fee or any commission in connection with the Merger or the other transactions\ncontemplated hereby.\n\n         3.21. Board Recommendation. The Company Board has, at a meeting of such\nCompany Board duly held on May 7, 2000, approved and adopted this Agreement, the\nMerger, the Company Option Agreement and the other transactions contemplated\nhereby and thereby, declared the advisability of the Merger and recommended that\nthe shareholders of the Company approve the\n\n\n                                       20\n   25\n\nMerger and the other transactions contemplated hereby, and has not as of the\ndate hereof rescinded or modified in any respect any of such actions.\n\n         3.22. Vote Required. The affirmative vote of the holders of a majority\nof the shares of Company Common Stock outstanding on the record date set for the\nCompany Shareholders Meeting (as defined in Section 3.26 hereof) is the only\nvote of the holders of any of the Company's capital stock necessary to approve\nthis Agreement and the transactions contemplated hereby.\n\n         3.23. Opinion of Financial Advisor. The Company has received the oral\nopinion of Goldman, Sachs &amp; Co. on the date of the meeting of the Company Board\nreferenced in Section 3.21 above, to the effect that, as of such date, the\nExchange Ratio is fair, from a financial point of view, to the holders of\nCompany Common Stock.\n\n         3.24. Tax Matters. Neither the Company nor, to its Knowledge, any of\nits affiliates has taken or agreed to take any action, or knows of any\ncircumstances, that (without regard to any action taken or agreed to be taken by\nParent or any of its affiliates) would prevent the business combination to be\neffected by the Merger from constituting a transaction qualifying as a\nreorganization within the meaning of Section 368 of the Code.\n\n         3.25. State Takeover Statutes; Rights Agreement. The Company Board has\ntaken all actions so that the restrictions contained in Section 302A.673 of the\nMBCA applicable to a \"business combination\" (as defined in Section 302A.673 of\nthe MBCA) will not apply to the execution, delivery of performance of this\nAgreement or the Company Option Agreement or the consummation of the Merger or\nthe other transactions contemplated by this Agreement or by the Company Option\nAgreement. The Company has taken all actions and completed all amendments, if\nany, necessary or appropriate so that (a) the Rights Agreement, dated as of\nNovember 10, 1998, as amended, between the Company and Norwest Bank Minnesota,\nN.A. (the \"Company Rights Agreement\"), is inapplicable to the transactions\ncontemplated by this Agreement or the Company Option Agreement, and (b) the\nexecution of this Agreement or the Company Option Agreement and the consummation\nof the transactions contemplated hereby or thereby, do not and will not (i)\nresult in Parent being an \"Acquiring Person\" (as such term is defined in the\nCompany Rights Agreement\"), (ii) result in the ability of any person to exercise\nany Rights under the Company Rights Agreement, (iii) enable or require the\n\"Rights\" (as such term is defined in the Company Rights Agreement) to separate\nfrom the shares of Company Common Stock to which they are attached or to be\ntriggered or become exercisable, or (iv) otherwise result in the occurrence of a\n\"Distribution Date\" or \"Shares Acquisition Date\" (as such terms are defined in\nthe Company Rights Agreement).\n\n         3.26. Registration Statement; Joint Proxy Statement\/Prospectus. The\ninformation supplied by the Company for inclusion in the registration statement\non Form S-4 (or such other or successor form as shall be appropriate) pursuant\nto which the shares of Parent Common Stock to be issued in the Merger will be\nregistered with the SEC (the \"Registration Statement\") shall not at the time the\nRegistration Statement (including any amendments or supplements thereto) is\ndeclared effective by the SEC contain any untrue statement of a material fact or\nomit to state any material fact required to be stated therein or necessary in\norder to make the statements therein, in light of the circumstances under which\nthey were made, not misleading. The information supplied by the Company for\ninclusion in the joint proxy statement\/prospectus to be sent to the shareholders\nof Company in connection with the meeting of Company's shareholders to consider\nthe Merger (the \"Company Shareholders Meeting\") and to the stockholders of\nParent in connection with the meeting of Parent's stockholders to consider the\nMerger (the \"Parent Stockholders Meeting\") (such joint proxy\n\n\n                                       21\n   26\n\nstatement\/prospectus as amended or supplemented is referred to herein as the\n\"Joint Proxy Statement\/Prospectus\") shall not, on the date the Joint Proxy\nStatement\/Prospectus is first mailed to Company's shareholders and the Parent\nstockholders, at the time of the Company Shareholders Meeting and the Parent\nStockholders Meeting and at the Effective Time, contain any statement which, at\nsuch time, is false or misleading with respect to any material fact, or omit to\nstate any material fact necessary in order to make the statements made therein,\nin light of the circumstances under which they are made, not false or\nmisleading; or omit to state any material fact necessary to correct any\nstatement in any earlier communication with respect to the solicitation of\nproxies for the Company Shareholders Meeting or the Parent Stockholders Meeting\nwhich has become false or misleading. If at any time prior to the Effective Time\nany event or information should be discovered by the Company which should be set\nforth in an amendment to the Registration Statement or a supplement to the Joint\nProxy Statement\/Prospectus, the Company shall promptly inform Parent.\nNotwithstanding the foregoing, the Company makes no representation, warranty or\ncovenant with respect to any information supplied by Parent or Merger Sub which\nis contained in any of the foregoing documents.\n\n                                   ARTICLE IV\n             REPRESENTATIONS AND WARRANTIES OF MERGER SUB AND PARENT\n\n         Merger Sub and Parent jointly and severally represent and warrant to\nthe Company that the statements contained in this Article IV are true and\ncorrect:\n\n         4.1. Organization and Qualification. Parent is a corporation duly\nincorporated, validly existing and in good standing under the laws of the State\nof Delaware, with the corporate power and authority to own, lease and operate\nits properties and to carry on its business as now being conducted. Merger Sub\nis a corporation validly existing and in good standing under the laws of the\nState of Minnesota. Each of Merger Sub and Parent is duly qualified or licensed\nto carry on its business as it is now being conducted, and is qualified to\nconduct business, in each jurisdiction where the character of its properties\nowned or leased or the nature of its activities makes such qualification\nnecessary, except for failures to be so qualified that would not, individually\nor in the aggregate, have, or would not reasonably be expected to have, a Parent\nMaterial Adverse Effect (as defined below). Neither Parent nor Merger Sub is in\nviolation of any of the provisions of its Charter Document or its Governing\nDocument. As used in this Agreement, the term \"Parent Material Adverse Effect\"\nmeans any change, effect, event or condition that (i) has a material adverse\neffect on the assets, business or financial condition of Parent and its\nSubsidiaries, taken as a whole, or (ii) would prevent or materially delay Merger\nSub's or Parent's ability to consummate the transactions contemplated hereby.\n\n         4.2. Capitalization. The authorized capital stock of Parent consists of\n150,000,000 shares of Parent Common Stock, $.001 par value per share, and\n1,000,000 shares of preferred stock, $.001 par value per share (of which 200,000\nshares are designated Series A Junior Participating Preferred Stock (the \"Parent\nPreferred Stock\"). As of the close of business on May 5, 2000 (the \"Parent\nMeasurement Date\"), (a) 74,292,949 shares of Parent Common Stock were issued and\noutstanding, (b) no shares of Parent Preferred Stock were issued and\noutstanding, (c) 12,855,999 shares of Parent Common Stock were reserved for\nissuance under the stock-based benefit plans of the Parent (the \"Parent Stock\nPlans\"), (d) options to purchase 5,881,970 shares of Parent Common Stock in the\naggregate had been granted and remained outstanding under the Parent Stock\nPlans, and (e) except for the options, rights to acquire shares of Parent Common\nStock under Parent's 1998 Employee Stock Purchase Plan (the \"Parent ESPP\") and\nrights to acquire shares of Parent Common Stock\n\n\n                                       22\n   27\n\npursuant to the Rights Agreement, dated as of June 4, 1996, as amended, between\nParent and Harris Trust Company of California (the \"Parent SRP Plan\"), there\nwere no outstanding Parental Rights (as defined below). Since the Parent\nMeasurement Date, no additional shares of Parent Common Stock have been issued\nand are outstanding, except pursuant to the exercise of options and the Parent\nESPP, and no Parental Rights have been granted (other than additional Parent SRP\nRights issued upon the issuance of shares of Parent Common Stock). All issued\nand outstanding shares of Parent Common Stock are duly authorized, validly\nissued, fully paid, nonassessable and free of preemptive rights created by the\nGeneral Corporation Law of the State of Delaware (\"DGCL\") or Parent's Charter\nDocument or Governing Document, or any other agreement with the Company. There\nare not at the date of this Agreement any existing options, warrants, calls,\nsubscriptions, convertible securities or other rights which obligate Parent or\nany of its Subsidiaries to issue, exchange, transfer or sell any shares of\ncapital stock of Parent or any of its Subsidiaries, other than shares of Parent\nCommon Stock issuable under the Parent Stock Plans and the Parent ESPP, or\nawards granted pursuant thereto, and other than Parent SRP Rights issued upon\nthe issuance of additional shares of Parent Common Stock (collectively,\n\"Parental Rights\").\n\n         4.3. Authority Relative to this Agreement. Each of Parent and Merger\nSub has the requisite corporate power and authority to execute and deliver, and\nto perform its obligations under, this Agreement and the Company Option\nAgreement and, subject to obtaining the necessary approval of its stockholders,\nto consummate the Merger and the other provisions contemplated hereby and\nthereby under applicable law. The execution and delivery by Parent and Merger\nSub of this Agreement and the Company Option Agreement, and the consummation of\nthe Merger and the transactions contemplated hereby and thereby, have been duly\nand validly authorized by the Board of Directors of Parent and Merger Sub and no\nother corporate proceedings on the part of Parent or Merger Sub are necessary to\nauthorize this Agreement or the Company Option Agreement or to consummate the\nMerger or other transactions contemplated hereby and thereby (other than\napproval by the Parent's stockholders required by applicable law). This\nAgreement and the Company Option Agreement have been duly and validly executed\nand delivered by Parent and Merger Sub and, assuming the due authorization,\nexecution and delivery of this Agreement and the Company Option Agreement by the\nCompany, is a valid and binding obligation of Parent and Merger Sub, enforceable\nagainst them in accordance with its terms, except to the extent that its\nenforceability may be limited by applicable bankruptcy, insolvency,\nreorganization, moratorium or other laws affecting the enforcement of creditors\nrights generally or by general equitable principles. The shares of Parent Common\nStock to be issued by Parent pursuant to the Merger, as well as the Parent\nOptions and the shares of Parent Common Stock to be issued upon exercise\nthereof: (i) have been duly authorized, and, when issued in accordance with the\nterms of the Merger and this Agreement (or the applicable option agreements),\nwill be validly issued, fully paid and nonassessable and will not be subject to\npreemptive rights, (ii) will, when issued in accordance with the terms of the\nMerger and this Agreement (or the applicable option agreements), be registered\nunder the Securities Act, and registered or exempt from registration under\napplicable United States \"Blue Sky\" laws, (iii) will, when issued in accordance\nwith the terms of the Merger and this Agreement (or the applicable option\nagreements), be listed on the Nasdaq National Market and (iv) will be issued\nfree and clear of any Liens.\n\n         4.4. No Conflicts; Required Filings and Consents.\n\n              (a) Neither the execution, delivery or performance of this\nAgreement by Merger Sub or Parent, nor the consummation of the transactions\ncontemplated hereby, nor compliance by Merger Sub or Parent with any provision\nhereof will (i) violate, conflict with or result in a breach of\n\n\n                                       23\n   28\n\nany provision of the Charter Documents or Governing Documents of Merger Sub or\nParent, (ii) cause a default or give rise to any right of termination,\ncancellation or acceleration or loss of a material benefit under, or result in\nthe creation of any lien, charge or other encumbrance upon any of the properties\nor assets of Merger Sub or Parent under any of the terms, conditions or\nprovisions of any note, license, bond, deed of trust, mortgage or indenture, or\nany other material instrument, obligation or agreement to which Merger Sub or\nParent is a party or by which its properties or assets may be bound or (iii)\nviolate any law, judgment, ruling, order, writ, injunction, decree, statute,\nrule or regulation applicable to Merger Sub or Parent or binding upon any of its\nproperties, except for, in the case of clauses (ii) and (iii), such defaults or\nviolations which would not, individually or in the aggregate, reasonably be\nexpected to have a Parent Material Adverse Effect.\n\n              (b) No filing or registration with or notification to and no\npermit, authorization, consent or approval of any Governmental Entity is\nrequired to be obtained, made or given by Merger Sub or Parent in connection\nwith the execution and delivery of this Agreement or the consummation by Merger\nSub of the Merger or other transactions contemplated hereby except (i) (A) in\nconnection with the applicable requirements of the HSR Act, (B) the filing of a\nRegistration Statement (defined in Section 3.26 hereof) with the SEC, in\naccordance with the Securities Act, as further described in Section 3.26 hereof\nor (C) such consents, approvals, orders, authorizations, registrations,\ndeclarations and filings as may be required under applicable state securities\nlaws and the laws of any country other than the United States, or (ii) where the\nfailure to obtain any such consents, approvals, authorizations or permits, or to\nmake such filings or notifications, would not, individually or in the aggregate,\nreasonably be expected to have a Parent Material Adverse Effect.\n\n         4.5. SEC Filings; Financial Statements.\n\n              (a) Parent has filed all forms, reports, schedules, statements and\nother documents required to be filed by it since January 1, 1997 to the date\nhereof (collectively, as supplemented and amended since the time of filing, the\n\"Parent SEC Reports\") with the SEC. The Parent SEC Reports (i) were prepared in\nall material respects with all applicable requirements of the Securities Act and\nthe Exchange Act, as the case may be, and (ii) did not at the time they were\nfiled contain any untrue statement of a material fact or omit to state any\nmaterial fact required to be stated therein or necessary in order to make the\nstatements therein, in light of the circumstances under which they were made,\nnot misleading. The representation in clause (ii) of the preceding sentence does\nnot apply to any misstatement or omission in any Parent SEC Report filed prior\nto the date of this Agreement which was superseded by a subsequent Parent SEC\nReport filed prior to the date of this Agreement.\n\n              (b) The audited consolidated financial statements and unaudited\nconsolidated interim financial statements of Parent and its Subsidiaries\nincluded or incorporated by reference in such Parent SEC Reports have been\nprepared in accordance with United States generally accepted accounting\nprinciples applied on a consistent basis during the periods involved (except as\nmay otherwise be indicated in the notes thereto) and present fairly, in all\nmaterial respects, the financial position and results of operations and cash\nflows of Parent and its Subsidiaries on a consolidated basis at the respective\ndates and for the respective periods indicated (except, in the case of all such\nfinancial statements that are interim financial statements, for normal year-end\nadjustments).\n\n              (c) Neither Parent nor any of its Subsidiaries has any liabilities\nor obligations of any nature, whether absolute, accrued, unmatured, contingent\nor otherwise, whether due or to become due, known or unknown, or any unsatisfied\njudgments or any leases of personalty or realty\n\n\n                                       24\n   29\n\nor unusual or extraordinary commitments that are required to be disclosed under\nUnited States generally accepted accounting principles, except (i) as set forth\nin the Parent SEC Reports, (ii) the liabilities recorded on Parent's\nconsolidated balance sheet at December 26, 1999 included in the financial\nstatements referred in Section 4.5(a) hereof and the notes thereto, (iii)\nliabilities or obligations incurred since December 26, 1999 (whether or not\nincurred in the ordinary course of business and consistent with past practice)\nthat would not, individually or in the aggregate, reasonably be expected to have\na Parent Material Adverse Effect, or (iv) liabilities that would not be required\nby United States generally accepted accounting principles to be disclosed in\nfinancial statements or in the notes thereto and that would not, individually or\nin the aggregate, reasonably be expected to have a Parent Material Adverse\nEffect.\n\n         4.6. Absence of Changes or Events. Except as set forth in the Parent\nSEC Reports, since December 26, 1999 through the date of this Agreement, Parent\nand its Subsidiaries have not incurred any liability or obligation that has\nresulted or would reasonably likely be expected to result in a Parent Material\nAdverse Effect, and there has not been any change in the business, financial\ncondition or results of operations of Parent or any of its Subsidiaries which\nhas had, or is reasonably expected to have, individually or in the aggregate, a\nParent Material Adverse Effect, and Parent and its Subsidiaries have conducted\ntheir respective businesses in the ordinary course consistent with their past\npractices.\n\n         4.7. Litigation. Except as disclosed in the Parent SEC Reports, there\nis no (i) claim, action, suit or proceeding pending or, to the Knowledge of\nParent, threatened against or relating to Parent or any of its Subsidiaries, or\n(ii) outstanding Orders, or application, request or motion therefor, in a\nproceeding to which Parent, any Subsidiary of Parent or any of their respective\nassets was or is a party except actions, suits, proceedings or Orders that,\nindividually or in the aggregate, has not had or would not reasonably be\nexpected to have a Parent Material Adverse Effect, and neither Parent nor any\nSubsidiary is in default in any material respect with respect to any such Order.\n\n         4.8. Compliance with Law. All activities of Merger Sub and Parent have\nbeen, and are currently being, conducted in compliance in all material respects\nwith all applicable United States federal, state and local and other foreign\nlaws, ordinances, regulations, interpretations, judgments, decrees, injunctions,\npermits, licenses, certificates, governmental requirements, Orders and other\nsimilar items of any court or other Governmental Entity or any nongovernmental\nself-regulatory agency, and no notice has been received by Parent of any claims\nfiled against either Merger Sub or Parent alleging a violation of any such laws,\nregulations or other requirements which would be required to be disclosed in the\nParent SEC Reports. Merger Sub and Parent have all permits, licenses and\nfranchises from Governmental Entities required to conduct their businesses as\nnow being conducted, except for such permits, licenses and franchises the\nabsence of which would not, individually or in the aggregate, reasonably be\nexpected to have a Parent Material Adverse Effect.\n\n         4.9. Finders or Brokers. Except for SG Cowen Securities, whose fees\nwill be paid by Parent, none of Parent, Merger Sub, the other Subsidiaries of\nParent, the Boards of Directors of Parent and Merger Sub or any member of such\nBoards of Directors has employed any agent, investment banker, broker, finder or\nintermediary in connection with the transactions contemplated hereby who might\nbe entitled to a fee or any commission in connection with the Merger or the\nother transactions contemplated hereby.\n\n         4.10. Tax Matters. Neither Parent nor, to its Knowledge, any of its\naffiliates has taken or agreed to take any action, or knows of any\ncircumstances, that (without regard to any action taken or\n\n\n                                       25\n   30\n\nagreed to be taken by the Company or any of its affiliates) would prevent the\nbusiness combination to be effected by the Merger from constituting a\ntransaction qualifying as a reorganization within the meaning of Section 368 of\nthe Code.\n\n         4.11. Registration Statement; Joint Proxy Statement\/Prospectus. The\ninformation supplied by Parent and Merger Sub for inclusion in the Joint Proxy\nStatement\/Prospectus shall not, at the time the Registration Statement\n(including any amendments or supplements thereto) is declared effective by the\nSEC, contain any untrue statement of a material fact or omit to state any\nmaterial fact necessary in order to make the statements therein, in light of the\ncircumstances under which they were made, not misleading. The information\nsupplied by Parent for inclusion in the Joint Proxy Statement\/Prospectus shall\nnot, on the date the Joint Proxy Statement\/Prospectus is first mailed to the\nCompany's shareholders and the Parent stockholders, at the time of the Company\nShareholders Meeting and the Parent Stockholders Meeting and at the Effective\nTime, contain any statement which, at such time, is false or misleading with\nrespect to any material fact, or omit to state any material fact necessary in\norder to make the statements therein, in light of the circumstances under which\nit is made, not false or misleading; or omit to state any material fact\nnecessary to correct any statement in any earlier communication with respect to\nthe solicitation of proxies for the Company Shareholders Meeting or the Parent\nStockholders Meeting which has become false or misleading. If at any time prior\nto the Effective Time any event or information should be discovered by Parent or\nMerger Sub which should be set forth in an amendment to the Registration\nStatement or a supplement to the Joint Proxy Statement\/Prospectus, Parent or\nMerger Sub will promptly inform the Company. Notwithstanding the foregoing,\nParent and Merger Sub make no representation, warranty or covenant with respect\nto any information supplied by the Company which is contained in any of the\nforegoing documents.\n\n                                   ARTICLE V\n                            COVENANTS AND AGREEMENTS\n\n         5.1. Conduct of Business of the Company Pending the Merger. Except as\ncontemplated by this Agreement or as expressly agreed to in writing by Parent,\nduring the period from the date of this Agreement to the earlier of (i) the\ntermination of this Agreement or (ii) the Effective Time, each of the Company\nand its Subsidiaries will conduct their respective operations according to its\nordinary course of business consistent with past practice, and will use\ncommercially reasonable best efforts consistent with past practice and policies\nto preserve intact its business organization, to keep available the services of\nits officers and employees and to maintain satisfactory relationships with\nsuppliers, distributors, customers and others having business relationships with\nit and will take no action which would adversely affect the ability of the\nparties to consummate the transactions contemplated by this Agreement, or the\ntiming thereof. Without limiting the generality of the foregoing, and except as\notherwise expressly provided in this Agreement, prior to the Effective Time, the\nCompany will not nor will it permit any of its Subsidiaries to, without the\nprior written consent of Parent:\n\n              (a) amend any of its Charter Documents or Governing Documents;\n\n              (b) authorize for issuance, issue, sell, deliver, grant any\noptions, warrants, stock appreciation rights, or stock issuance rights for, or\notherwise agree or commit to issue, sell, deliver, pledge, dispose of or\notherwise encumber any shares of any class of its capital stock or any\nsecurities convertible into shares of any class of its capital stock, except (i)\npursuant to and in accordance with the terms of Company Options outstanding on\nthe Company Measurement Date or granted pursuant\n\n\n                                       26\n   31\n\nto clause (iv) below, (ii) pursuant to the ESPP (to the extent shares of Company\nCommon Stock have been paid for with payroll deductions), (iii) pursuant to and\nin accordance with the terms of Company Warrants outstanding on the Company\nMeasurement Date, or (iv) the grant of Company Options consistent with past\npractices to new employees, which Company Options will represent the right to\nacquire no more than 20,000 shares of Company Common Stock per new employee;\nprovided however, that the current form of agreement under the Company Stock\nOption Plans shall be amended to no longer include any provisions providing for\nacceleration of vesting upon a change of control, and any other form used by the\nCompany shall be in a form reasonably acceptable to Parent;\n\n              (c) subdivide, cancel, consolidate or reclassify any shares of its\ncapital stock, issue or authorize the issuance of any other securities in\nrespect of, in lieu of or in substitution for shares of its capital stock,\ndeclare, set aside or pay any dividend or other distribution (whether in cash,\nshares or property or any combination thereof) in respect of its capital stock\nor purchase, redeem or otherwise acquire any shares of its own capital stock or\nof any of its Subsidiaries, except as otherwise expressly provided in this\nAgreement;\n\n              (d) (i) incur or assume any long-term or short-term debt or issue\nany debt securities except for borrowings under existing lines of credit in the\nordinary course of business consistent with past practice; (ii) assume,\nguarantee, endorse or otherwise become liable or responsible (whether directly,\ncontingently or otherwise) for the material obligations of any other person\n(other than Subsidiaries of the Company); or (iii) make any material loans,\nadvances or capital contributions to, or investments in, any other person (other\nthan to Subsidiaries of the Company);\n\n              (e) except as otherwise expressly contemplated by this Agreement,\n(i) increase in any manner the compensation of (A) any employee who is not an\nofficer of the Company or any Subsidiary (a \"NonExecutive Employee\"), except in\nthe ordinary course of business consistent with past practice or (B) any of its\ndirectors or officers, except in the ordinary course of business, consistent\nwith past practice, after consultation with Parent, (ii) pay or agree to pay any\npension, retirement allowance or other employee benefit not required, or enter\ninto, amend or agree to enter into or amend any agreement or arrangement with\nany such director or officer or employee, whether past or present, relating to\nany such pension, retirement allowance or other employee benefit, except as\nrequired to comply with law or under currently existing agreements, plans or\narrangements or with respect to NonExecutive Employees, in the ordinary course\nof business consistent with past practice; (iii) grant any rights to receive any\nseverance or termination pay to, or enter into or amend any employment or\nseverance agreement with, any employee or any of its directors or officers,\nexcept as required by applicable law or with respect to severance or termination\npay to NonExecutive Employees in the ordinary course of business, consistent\nwith past practices; or (iv) except as may be required to comply with applicable\nlaw, become obligated (other than pursuant to any new or renewed collective\nbargaining agreement) under any new pension plan, welfare plan, multiemployer\nplan, employee benefit plan, benefit arrangement, or similar plan or\narrangement, which was not in existence on the date hereof, including any bonus,\nincentive, deferred compensation, share purchase, share option, share\nappreciation right, group insurance, severance pay, retirement or other benefit\nplan, agreement or arrangement, or employment or consulting agreement with or\nfor the benefit of any person, or amend any of such plans or any of such\nagreements in existence on the date hereof; provided, however, that this clause\n(iv) shall not prohibit the Company from renewing any such plan, agreement or\narrangement already in existence on terms no more favorable to the parties to\nsuch plan, agreement or arrangement;\n\n\n                                       27\n   32\n\n              (f) except as otherwise expressly contemplated by this Agreement,\nenter into, amend in any material respect or terminate any Company Material\nContracts other than in the ordinary course of business consistent with past\npractice;\n\n              (g) sell, lease, license, mortgage or dispose of any of its\nproperties or assets, other than (i) transactions in the ordinary course of\nbusiness consistent with past practice, (ii) sales of assets, for the fair\nmarket value thereof, which sales do not individually or in the aggregate exceed\n$500,000 or (iii) as may be required or contemplated by this Agreement;\n\n              (h) except as otherwise contemplated by the Merger, acquire or\nagree to acquire by merging or consolidating with, or by purchasing a\nsubstantial portion of the assets of or equity in, or by any other manner, any\nbusiness or any corporation, limited liability company, partnership, association\nor other business organization or division thereof or otherwise acquire or agree\nto acquire any assets, other than the acquisition of assets that is in the\nordinary course of business consistent with past practice and which are\ncontemplated within the budget previously provided in writing by the Company to\nthe Parent without the prior written consent of Parent, which consent will not\nbe unreasonably withheld;\n\n              (i) alter (through merger, liquidation, reorganization,\nrestructuring or in any fashion) the corporate structure or ownership of the\nCompany or any Subsidiary;\n\n              (j) authorize or commit to make any material capital expenditures\nnot within the budget previously provided in writing by the Company to Parent\nwithout the prior written consent of Parent, which consent shall not be\nunreasonably withheld;\n\n              (k) make any change in the accounting methods or accounting\npractices followed by the Company, except as required by generally accepted\naccounting principles or applicable law;\n\n              (l) make any election under any applicable Tax laws which would,\nindividually or in the aggregate, have a Company Material Adverse Effect;\n\n              (m) take any action that (without regard to any action taken or\nagreed to be taken by Parent or any of its Affiliates) would prevent Parent from\naccounting for the business combination to be effected by the Merger as a\npooling-of-interests;\n\n              (n) settle any action, suit, claim, investigation or proceeding\n(legal, administrative or arbitrative) requiring a payment by the Company or its\nSubsidiaries in excess of $200,000 without the consent of Parent, which consent\nshall not be unreasonably withheld or delayed;\n\n              (o) pay, discharge or satisfy any claims, liabilities or\nobligations (absolute, accrued, asserted or unasserted, contingent or\notherwise), other than the payment, discharge or satisfaction, in the ordinary\ncourse of business consistent with past practice or in accordance with their\nterms, of claims, liabilities or obligations reflected or reserved against in,\nor contemplated by, the most recent financial statements (or the notes thereto)\nof the Company included in the Company SEC Reports or incurred in the ordinary\ncourse of business consistent with past practice; or\n\n\n                                       28\n   33\n\n              (p) agree or enter into any contract, agreement, commitment or\narrangement to do any of the foregoing; provided, however, that nothing\ncontained herein shall limit the ability of Parent to exercise its rights under\nthe Company Option Agreement.\n\n         5.2. Preparation of Registration Statement; Joint Proxy\nStatement\/Prospectus; Blue Sky Laws. As promptly as practicable and no later\nthan 20 business days after the date hereof, Parent and the Company shall\nprepare, and Parent shall file with the SEC, the Registration Statement, in\nwhich the Joint Proxy Statement\/Prospectus will be included as part thereof.\nParent and the Company shall use all commercially reasonable best efforts to\nhave such Registration Statement declared effective under the Securities Act as\npromptly as practicable after filing. The Joint Proxy Statement\/Prospectus will,\nwhen prepared pursuant to this Section 5.2 and mailed to the Company's\nshareholders, comply in all material respects with the applicable requirements\nof the Exchange Act and the Securities Act. The Joint Proxy Statement\/Prospectus\nshall be reviewed and approved by Parent and Parent's counsel prior to the\nmailing of such Joint Proxy Statement\/Prospectus to the Company's shareholders.\nParent shall also take any action required to be taken under any applicable\nprovincial or state securities laws (including \"Blue Sky\" laws) in connection\nwith the issuance of the Parent Common Stock in the Merger; provided, however,\nthat neither Parent nor the Company shall be required to register or qualify as\na foreign corporation or to take any action that would subject it to service of\nprocess in any jurisdiction where any such entity is not now so subject, except\nas to matters and transactions arising solely from the offer and sale of Parent\nCommon Stock or the Parent Options.\n\n         5.3. Company Shareholder and Parent Stockholder Meetings.\n\n              (a) The Company shall, promptly after the date hereof, take all\naction necessary in accordance with the MBCA and its Articles of Incorporation\nand Bylaws to convene the Company Shareholders Meeting within 45 days of the\nRegistration Statement being declared effective by the SEC, whether or not the\nCompany Board determines at any time after the date hereof that the Merger is no\nlonger advisable. The adoption of the Merger by the shareholders of the Company\nshall be recommended by the Company Board unless, in the good faith judgment of\nthe Company Board, after consultation with outside counsel, taking such action\nwould be inconsistent with its fiduciary obligations under applicable law. The\nCompany Shareholders Meeting will be convened, held and conducted, and any\nproxies will be solicited, in compliance with the MCBA and applicable securities\nlaws. The Company shall consult with Parent regarding the date of the Company\nShareholders Meeting. Subject to Section 5.2 and Section 5.6 hereof, the Company\nshall use commercially reasonable best efforts to solicit from shareholders of\nthe Company proxies in favor of the Merger and shall take all other commercially\nreasonable actions necessary or advisable to secure the vote or consent of\nshareholders required to effect the Merger.\n\n              (b) Parent shall, promptly after the date hereof, take all action\nnecessary in accordance with the DGCL and its Certificate of Incorporation and\nBylaws to convene the Parent Stockholders Meeting within 45 days of the\nRegistration Statement being declared effective by the SEC, whether or not the\nParent Board determines at any time after the date hereof that the Merger is no\nlonger advisable. The approval by the stockholders of the Parent of the\ntransactions contemplated by this Agreement shall be recommended by the Parent\nBoard unless, in the good faith judgment of the Parent Board, after consultation\nwith outside counsel, taking such action would be inconsistent with its\nfiduciary obligations under applicable law. The Parent Stockholders Meeting will\nbe convened, held and conducted, and any proxies will be solicited, in\ncompliance with the DGCL and applicable securities laws. Parent shall consult\nwith the Company regarding the date of the Parent\n\n\n                                       29\n   34\n\nStockholders Meeting. Subject to Section 5.2 and Section 5.6 hereof, Parent\nshall use commercially reasonable best efforts to solicit from stockholders of\nParent proxies in favor of the Merger and shall take all other commercially\nreasonable actions necessary or advisable to secure the vote or consent of\nstockholders required to effect the Merger.\n\n         5.4. Additional Agreements, Cooperation.\n\n              (a) Subject to the terms and conditions herein provided, each of\nthe parties hereto agrees to use its commercially reasonable best efforts to\ntake, or cause to be taken, all action and to do, or cause to be done, all\nthings necessary, proper or advisable to consummate and make effective as\npromptly as practicable the transactions contemplated by this Agreement, and to\ncooperate, subject to compliance with applicable law, with each other in\nconnection with the foregoing, including using its commercially reasonable best\nefforts (i) to obtain all necessary waivers, consents and approvals from other\nparties to loan agreements, material leases and other material contracts, (ii)\nto obtain all necessary consents, approvals and authorizations as are required\nto be obtained under any United States federal or state, foreign law or\nregulations, (iii) to defend all lawsuits or other legal proceedings challenging\nthis Agreement or the Company Option Agreement or the consummation of the\ntransactions contemplated hereby or thereby, (iv) to lift or rescind any\ninjunction or restraining order or other order adversely affecting the ability\nof the parties to consummate the transactions contemplated hereby, (v) to effect\nall necessary registrations and filings and submissions of information requested\nby Governmental Entities, and (vi) to fulfill all conditions to this Agreement.\n\n              (b) Each of the parties hereto agrees, subject to compliance with\napplicable law, to furnish to each other party hereto such necessary information\nand reasonable assistance as such other party may request in connection with its\npreparation of necessary filings or submissions to any regulatory or\ngovernmental agency or authority, including, without limitation, any filing\nnecessary under the provisions of the HSR Act, the Exchange Act, the Securities\nAct or any other United States federal or state, or foreign statute or\nregulation. Each party hereto shall promptly inform each other party of any\nmaterial communication from the U.S. Federal Trade Commission or any other\ngovernment or governmental authority regarding any of the transactions\ncontemplated hereby.\n\n         5.5. Publicity. Except as otherwise required by law or the rules of any\napplicable securities exchange or the Nasdaq National Market, so long as this\nAgreement is in effect, Parent and the Company will not, and will not permit any\nof their respective affiliates or representatives to, issue or cause the\npublication of any press release or make any other public announcement with\nrespect to the transactions contemplated by this Agreement without the consent\nof the other party, which consent shall not be unreasonably withheld or delayed.\nParent and the Company will cooperate with each other in the development and\ndistribution of all press releases and other public announcements with respect\nto this Agreement and the transactions contemplated hereby, and will furnish the\nother with drafts of any such releases and announcements as far in advance as\npossible.\n\n         5.6. No Solicitation.\n\n              (a) Immediately upon execution of this Agreement, the Company\nshall (and shall cause its officers, directors, employees, investment bankers,\nattorneys and other agents or representatives to) cease all discussions,\nnegotiations, responses to inquiries (except as set forth in the proviso to this\nsentence) and other communications relating to any potential business\ncombination with all third parties who, prior to the date hereof, may have\nexpressed or otherwise indicated any interest in pursuing an Acquisition\nProposal (as hereinafter defined) with the Company;\n\n\n                                       30\n   35\n\nprovided that, this Section 5.6(a) shall not prohibit activities permitted by\nSection 5.6(b) in response to an inquiry initiated after the date hereof.\n\n              (b) Prior to termination of this Agreement pursuant to Article VII\nhereof, the Company and its Subsidiaries shall not, nor shall the Company\nauthorize or permit any officers, directors or employees of, or any investment\nbankers, attorneys or other agents or representatives retained by or acting on\nbehalf of, the Company or any of its Subsidiaries to, (i) initiate, solicit or\nencourage, directly or indirectly, any inquiries or the making of any proposal\nthat constitutes an Acquisition Proposal, (ii) engage or participate in\nnegotiations or discussions with, or furnish any information or data to, or take\nany other action to, facilitate any inquiries or making any proposal by, any\nthird party relating to an Acquisition Proposal, (iii) enter into any agreement\nwith respect to any Acquisition Proposal or approve an Acquisition Proposal, or\n(iv) make or authorize any statement, recommendation or solicitation in support\nof any possible Acquisition Proposal. Notwithstanding anything to the contrary\ncontained in this Section 5.6 or in any other provision of this Agreement, prior\nto the Company Shareholders Meeting, the Company Board may participate in\ndiscussions or negotiations with or furnish information to any third party\nmaking an unsolicited Acquisition Proposal (a \"Potential Acquiror\") or approve\nor recommend an unsolicited Acquisition Proposal if (A) a majority of the\ndisinterested directors of the Company Board determines in good faith, after\nconsultation with its independent financial advisor, that a Potential Acquiror\nhas submitted to the Company a written Acquisition Proposal which sets forth a\nprice or range of values to be paid by the Potential Acquiror and which, if\nconsummated, would be more favorable to the Company's shareholders, from a\nfinancial point of view, than the Merger (a \"Superior Proposal\"), (B) the\nCompany Board has determined in good faith, based on consultation with\nindependent financial advisor, that such Potential Acquiror is financially\ncapable of consummating such Superior Proposal, and (C) a majority of the\ndisinterested directors of the Company Board determines in good faith, after\nreceiving advice from reputable outside legal counsel experienced in such\nmatters (and the parties hereto agree that the law firm of Dorsey &amp; Whitney LLP\nis so experienced), that the failure to participate in such discussions or\nnegotiations or to furnish such information or to approve or recommend such\nunsolicited Acquisition Proposal is inconsistent with the Company Board's\nfiduciary duties under applicable law. In the event that the Company shall\nreceive any Acquisition Proposal, it shall promptly (and in no event later than\n48 hours after receipt thereof) furnish to Parent the identity of the recipient\nof the Acquisition Proposal and of the Potential Acquiror, the terms of such\nAcquisition Proposal, copies of such Acquisition Proposal and all information\nrequested by the Potential Acquiror, and shall further promptly inform Parent in\nwriting as to the fact such information is to be provided after compliance with\nthe terms of the preceding sentence. Notwithstanding the foregoing, the Company\nshall not provide any non-public information to any such Potential Acquiror\nunless (1) it has prior to the date thereof provided such information to Parent\nand Merger Sub, and (2) the Company provides such non-public information\npursuant to a nondisclosure agreement with terms that are at least as\nrestrictive as those pursuant to the Confidential Information and Non-Disclosure\nAgreement (the \"Reciprocal Confidentiality Agreement\"), dated March 6, 2000,\nbetween Parent and the Company. Nothing contained herein shall prevent the\nCompany from complying with Rules 14d-9 and 14e-2 promulgated under the Exchange\nAct with regard to an Acquisition Proposal or making any disclosure to the\nCompany's shareholders if, in the good faith judgment of the Company Board,\nafter receiving advice from reputable outside legal counsel experienced in such\nmatters (and the parties hereto agree that the law firm of Dorsey &amp; Whitney LLP\nis so experienced), such disclosure is required by applicable law. Without\nlimiting the foregoing, the Company understands and agrees that any violation of\nthe restrictions set forth in this Section 5.6(b) by the Company or any of its\nSubsidiaries, or by any director or officer of the Company or any of its\nSubsidiaries or any financial advisor, attorney or\n\n\n                                       31\n   36\n\nother advisor or representative of the Company or any of its Subsidiaries,\nwhether or not such person is purporting to act on behalf of the Company or any\nof its Subsidiaries or otherwise, shall be deemed to be a breach of this Section\n5.6(b) sufficient to enable Parent to terminate this Agreement pursuant to\nSection 7.1(d)(i) hereof.\n\n              (c) In addition to the foregoing, the Company shall not enter into\nany agreement concerning an Acquisition Proposal for a period of not less than\nthree business days after the Parent's receipt of a copy of the Acquisition\nProposal.\n\n              (d) For the purposes of this Agreement, \"Acquisition Proposal\"\nshall mean any proposal, whether in writing or otherwise, made by any person\nother than Parent and its Subsidiaries to acquire \"beneficial ownership\" (as\ndefined under Rule 13(d) of the Exchange Act) of 20% or more of the assets of,\nor 20% or more of the outstanding capital stock of any of the Company or its\nSubsidiaries pursuant to a merger, consolidation, exchange of shares or other\nbusiness combination, sale of shares of capital stock, sales of assets, tender\noffer or exchange offer or similar transaction involving the Company or its\nSubsidiaries.\n\n         5.7. Access to Information. From the date of this Agreement until the\nEffective Time, and upon reasonable notice, the Company will give Parent and its\nauthorized representatives (including counsel, other consultants, accountants\nand auditors) reasonable access during normal business hours to all facilities,\npersonnel and operations and to all books and records of it and its\nSubsidiaries, will permit Parent to make such inspections as it may reasonably\nrequire, will cause its officers and those of its Subsidiaries to furnish Parent\nwith such financial and operating data and other information with respect to its\nbusiness and properties as Parent may from time to time reasonably request and\nconfer with Parent to keep it reasonably informed with respect to operational\nand other business matters relating to the Company and its Subsidiaries and the\nstatus of satisfaction of conditions to the Closing, other than information that\nmay not be disclosed under applicable law or in violation of an agreement or if\nsuch disclosure would result in a waiver of the attorney-client privilege;\nprovided, however, that in any such event the parties shall cooperate in good\nfaith to obtain waivers of such prohibitions or implement alternative methods of\ndisclosure of material information. All information obtained by Parent pursuant\nto this Section 5.7 shall be kept confidential in accordance with the Reciprocal\nConfidentiality Agreement.\n\n         5.8. Notification of Certain Matters. The Company or Parent, as the\ncase may be, shall promptly notify the other of (a) its obtaining of Knowledge\nas to the matters set forth in clauses (i), (ii) and (iii) below, or (b) the\noccurrence, or failure to occur, of any event, which occurrence or failure to\noccur would be likely to cause (i) any representation or warranty contained in\nthis Agreement to be untrue or inaccurate in any material respect at any time\nfrom the date hereof to the Effective Time, (ii) any material failure of the\nCompany or Parent, as the case may be, or of any officer, director, employee or\nagent thereof, to comply with or satisfy any covenant, condition or agreement to\nbe complied with or satisfied by it under this Agreement or (iii) the\ninstitution of any claim, suit, action or proceeding arising out of or related\nto the Merger or the transactions contemplated hereby; provided, however, that\nno such notification shall affect the representations or warranties of the\nparties or the conditions to the obligations of the parties hereunder.\n\n         5.9. Resignation of Officers and Directors. At or prior to the\nEffective Time, the Company shall deliver to Parent the resignations of such\nofficers and directors of the Company and shall use its commercially reasonable\nbest efforts to deliver to Parent the resignations of such officers and\ndirectors of its Subsidiaries (in each case, in their capacities as officers and\ndirectors, but not as\n\n\n                                       32\n   37\n\nemployees if any of such persons are employees of the Company or any Subsidiary)\nas Parent shall specify, which resignations shall be effective at the Effective\nTime.\n\n         5.10. Indemnification.\n\n              (a) As of the Effective Time and for a period of six years\nfollowing the Effective Time, Parent will indemnify and hold harmless from and\nagainst all claims, damages, losses, obligations or liabilities (\"Losses\") any\npersons who were directors or officers of the Company or any Subsidiary prior to\nthe Effective Time (the \"Indemnified Persons\") to the fullest extent such person\ncould have been indemnified for such Losses under applicable law, under the\nGoverning Documents of the Company or any Subsidiary or under the\nindemnification agreements listed on Schedule 5.10 in effect immediately prior\nto the date hereof, with respect to any act or failure to act by any such\nIndemnified Person at or prior to the Effective Time (including, without\nlimitation, the transactions contemplated by this Agreement).\n\n              (b) Any determination required to be made with respect to whether\nan Indemnified Person's conduct complies with the standards set forth under the\nMBCA or other applicable law shall be made by independent counsel selected by\nParent and reasonably acceptable to the Indemnified Persons. Parent shall pay\nsuch counsel's fees and expenses so long as the Indemnified Persons do not\nchallenge any such determination by such independent counsel).\n\n              (c) In the event that Parent or any of its successors or assigns\n(i) consolidates with, merges or otherwise enters a business combination into or\nwith any other person, and Parent or such successor or assign is not the\ncontinuing or surviving corporation or entity of such consolidation, merger or\nbusiness combination, or (ii) transfers all or substantially all of its\nproperties and assets to any person, then, and in each case, proper provision\nshall be made so that such person or the continuing or surviving corporation\nassumes the obligations set forth in this Section 5.10 and none of the actions\ndescribed in clauses (i) and (ii) above shall be consummated until such\nprovision is made.\n\n              (d) Parent shall maintain in effect for not less than six years\nfrom the Effective Time the current policies of directors' and officers'\nliability insurance maintained by the Company (provided that Parent may\nsubstitute therefor policies of at least comparable coverage containing terms\nand conditions which are no less advantageous to the Indemnified Parties in all\nmaterial respects so long as no lapse in coverage occurs as a result of such\nsubstitution) with respect to all matters (including, without limitation,\nextended reporting endorsements (tail coverage) on fiduciary liability with\nrespect to all senior officers and directors of the Company), including the\ntransactions contemplated hereby, occurring prior to, and including the\nEffective Time; provided that, in the event that any claim for any losses is\nasserted or made within such six-year period, such insurance shall be continued\nin respect of any such Claim until final disposition of any and all such Claims;\nand provided, further, that Parent shall not be obligated to make annual premium\npayments for such insurance to the extent such premiums exceed 150% of the\npremiums paid as of the date hereof by the Company or any Subsidiary for such\ninsurance. In such case, Parent shall purchase as much coverage as possible for\n150% of the premiums paid as of the date hereof for such insurance, which\ncoverage shall be at least as favorable in all material respects as that\nprovided by Parent to its directors.\n\n              (e) In the event any claim, action, suit, proceeding or\ninvestigation (a \"Claim\") for which indemnification is provided under this\nSection 5.10 is brought against an Indemnified\n\n\n                                       33\n   38\n\nPerson (whether arising before or after the Effective Time) after the Effective\nTime Parent shall, consistent with the terms of any directors' and officers'\nliability insurance policy defend such Indemnified Person from such claim with\ncounsel reasonably acceptable to such Indemnified Person; provided, however,\nthat in the event Parent fails to provide a defense to such Claim or it would be\ninappropriate due to conflicts of interests that counsel for Parent also\nrepresent such Indemnified Person, (i) such Indemnified Person may retain\nseparate counsel reasonably acceptable to Parent, (ii) the indemnifying party\nshall pay all reasonable fees and expenses of such counsel for such Indemnified\nPerson as statements therefor are received, and (iii) the indemnifying party\nwill use all commercially reasonable best efforts to assist in the defense of\nany such matter, provided that the indemnifying party shall not be liable for\nany settlement of any Claim without its written consent, which consent shall not\nbe unreasonably withheld, and provided further, however, that not more than one\nsuch separate counsel may be retained for all Indemnified Persons at the expense\nof the indemnifying party (unless, and to the extent that, the joint\nrepresentation of all Indemnified Persons poses an actual conflict of interest).\nAny Indemnified Person desiring to claim indemnification under this Section\n5.10, upon learning of any Claim, shall notify the indemnifying party (but the\nfailure to so notify shall not relieve the indemnifying party from any liability\nwhich it may have under this Section 5.10 except to the extent such failure\nmaterially prejudices such indemnifying party).\n\n              (f) This Section 5.10 is intended to benefit the Indemnified\nPersons, shall be enforceable by each Indemnified Person and his or her heirs\nand representatives.\n\n         5.11. Shareholder Litigation. The Company shall give Parent the\nreasonable opportunity to participate in the defense of any shareholder\nlitigation against or in the name of the Company and\/or its respective directors\nrelating to the transactions contemplated by this Agreement.\n\n         5.12. Employee Benefit Plans.\n\n              (a) 401(k) Plan. Company shall take the following steps with\nrespect to the Ancor Communications, Incorporated Salary Savings Plan (401(k)\nPlan): at least three days prior to the Effective Time, the Company shall\nterminate the 401(k) Plan pursuant to written resolutions, the form and\nsubstance of which shall be satisfactory to Parent. Individuals employed by the\nCompany at the Effective Time (\"Company Employees\") shall be allowed to\nparticipate in Parent's 401(k) plan effective as of the first payroll following\nthe Effective Time; and all service with the Company shall be considered service\nwith Parent for purposes of determining eligibility, vesting, and benefit\naccrual (i.e., any matching contributions) under Parent's 401(k) plan. As soon\nas administratively feasible after assets are distributed from the 401(k) Plan,\nCompany Employees shall be offered an opportunity to roll their 401(k) Plan\naccount balances into Parent's 401(k) Plan.\n\n              (b) Welfare Plans. Company Employees shall be eligible to\nparticipate in Parent's disability plans, group life insurance plan, medical\nplan, dental plan, and Section 125 cafeteria plan as soon as administratively\nfeasible after the Effective Time but in no event later than January 1, 2001.\nPrior to such time, Company Employees shall remain eligible for Company's\nwelfare plans, as applicable, and such plans will not be amended or changed in\nany material respect by Parent or Company. Parent shall include service and\nprior earnings with the Company for purposes of determining eligibility,\nparticipation, and benefit accrual under its short term disability plan, group\nlife insurance plan medical plan, dental plan, and Section 125 cafeteria plan.\nParent shall include such service for purposes of determining benefit\neligibility or participation in Parent's disability plans; however, such\nparticipation shall be subject to any applicable preexisting condition\nexclusions.\n\n\n                                       34\n   39\n\n              (c) Vacation and PTO. Company Employees shall be eligible to\nparticipate in Parent's vacation or PTO policy, as applicable, as soon as\nadministratively feasible after the Effective Time but in no event later than\nJanuary 1, 2001. Prior to such date Company Employees shall remain eligible for\nCompany's vacation pay or sick pay policies, as applicable, and such plans or\npolicies will not be amended or changed in any material respect by Parent or\nCompany. Parent shall include service with the Company for purposes of\ndetermining eligibility, participation, and calculation of vacation pay, sick\npay, or paid time off (PTO) under Parent's vacation or PTO policy, as\napplicable. Subject to the terms of the Company plans or policies, each Company\nEmployee will be entitled to carry over all vacation days and sick leave accrued\nbut unused as of the Effective Time.\n\n              (d) Executive Incentive Program. The Company's Executive Incentive\nProgram shall be kept in place until December 31, 2000, after which time Company\nEmployees may be eligible to participate in any incentive program established by\nParent from time to time.\n\n         5.13. Determination of Optionholders and Warrantholders. At least ten\nbusiness days before the Effective Time, the Company shall provide Parent with a\ntrue and complete list, as of such date, of (a) the holders of Company Options\nand Company Warrants, (b) the number of shares of Company Common Stock subject\nto Company Options and Company Warrants held by each such optionholder and\nwarrantholder and (c) the address of each such optionholder and warrantholder as\nset forth in the books and records of the Company or any Subsidiary, following\nupon which there shall be no additional grants of Company Options without\nParent's prior consent. From the date such list is provided to Parent until the\nEffective Time, the Company shall provide a daily option activity report to\nParent containing such information as Parent shall reasonably request.\n\n         5.14. Preparation of Tax Returns. The Company shall file (or cause to\nbe filed) at its own expense, on or prior to the due date thereof, all Returns\nrequired to be filed on or before the Closing Date. The Company shall provide\nParent with a copy of appropriate workpapers, schedules, drafts and final copies\nof each foreign and domestic, federal, provincial and state income Tax return or\nelection of the Company (including returns of all Employee Benefit Plans) at\nleast ten days before filing such return or election and shall consult with\nParent with respect thereto prior to such filing.\n\n         5.15. Pooling Affiliates.\n\n              (a) Promptly following the date of this Agreement, the Company\nshall deliver to Parent a list of names and addresses of those persons who are\naffiliates within the meaning of Rule 145 of the rules and regulations\npromulgated under the Securities Act or otherwise applicable SEC accounting\nreleases with respect to the Company (the \"Company Pooling Affiliates\"). The\nCompany shall provide Parent such information and documents as Parent shall\nreasonably request for purposes of reviewing such list. The Company shall\ndeliver to Parent, on or prior to the Closing, an affiliate letter in the form\nattached hereto as Exhibit D, executed by each of the Company Pooling Affiliates\nidentified in the foregoing list. Parent shall be entitled to place legends as\nspecified in such affiliate letters on the certificates evidencing any of the\nParent Common Stock to be received by such Company Pooling Affiliates pursuant\nto the terms of this Agreement, and to issue appropriate stop transfer\ninstructions to the transfer agent for the Parent Common Stock, consistent with\nthe terms of such letters.\n\n              (b) Parent shall procure, on or prior to the Effective Time, an\naffiliate letter in the form attached hereto as Exhibit E, executed by\nappropriate affiliates of Parent.\n\n\n                                       35\n   40\n\n              (c) For so long as resales of shares of Parent Common Stock issued\npursuant to the Merger are subject to the resale restrictions set forth in Rule\n145 under the Securities Act, Parent will use good faith efforts to comply with\nRule 144(c)(1) under the Securities Act.\n\n         5.16. Pooling Actions. Between the date of this Agreement and the\nEffective Time, the parties will each take all actions necessary for Parent to\naccount for the business combination to be effected by the Merger as a pooling\nof interests.\n\n         5.17. Tax-Free Reorganization. Parent and the Company shall each use\nall commercially reasonable best efforts to cause the Merger to qualify as a\nreorganization within the meaning of Section 368(a) of the Code. Neither Parent\nnor the Company shall take or fail to take, or cause any third party to take or\nfail to take, any action that would cause the Merger to fail to qualify as a\n\"reorganization\" within the meaning of Section 368(a) of the Code.\n\n         5.18. SEC Filings; Compliance. The Company and Parent shall each cause\nthe forms, reports, schedules, statements and other documents required to be\nfiled with the SEC by the Company and Parent, respectively, between the date of\nthis Agreement and the Effective Time (with respect to either the Company or\nParent, the \"New SEC Reports\") to be prepared in all material respects with all\napplicable requirements of the Securities Act and the Exchange Act, as the case\nmay be, and such New SEC Reports will not at the time they are filed contain any\nuntrue statement of a material fact or omit to state any material fact required\nto be stated therein or necessary in order to make the statements therein, in\nlight of the circumstances under which they are made, not misleading.\n\n         5.19. Listing of Additional Shares. Prior to the Effective Time, Parent\nshall file with the Nasdaq National Market a Notification Form for Listing of\nAdditional Shares with respect to the shares of Parent Common Stock to be issued\nin the Merger.\n\n         5.20. Rights Agreement. Prior to the Effective Time, the Company Board\nshall not take any action in contravention of the actions required by Section\n3.25 of this Agreement.\n\n                                   ARTICLE VI\n                              CONDITIONS TO CLOSING\n\n         6.1. Conditions to Each Party's Obligation to Effect the Merger. The\nrespective obligation of each party to effect the Merger is subject to the\nsatisfaction or waiver on or prior to the Effective Date of the following\nconditions:\n\n              (a) Company Shareholder and Parent Stockholder Approval. This\nAgreement and the Merger shall have been approved and adopted by the requisite\nvote of (i) the shareholders of the Company under the MBCA and the Company's\nCharter Document and Governing Documents and (ii) the stockholders of Parent\nunder the DGCL and the Parent's Charter Document and Governing Document.\n\n              (b) Governmental Action; No Injunction or Restraints. No action or\nproceeding shall be instituted by any Governmental Entity seeking to prevent\nconsummation of the Merger, asserting the illegality of the Merger or this\nAgreement or seeking damages (in an amount or to the extent that, if they were\nincurred or paid by the Company, would constitute a Company Material Adverse\nEffect) directly arising out of the transactions contemplated hereby which\ncontinues to be\n\n\n                                       36\n   41\n\noutstanding. No judgment, order, decree, statute, law, ordinance, rule or\nregulation entered, enacted, promulgated, enforced or issued by any court or\nother Governmental Entity of competent jurisdiction or other legal restraint or\nprohibition shall be in effect (i) imposing or seeking to impose sanctions,\ndamages or liabilities (in an amount or to the extent that, if they were\nincurred or paid by the Company, would constitute a Company Material Adverse\nEffect) directly arising out of the Merger on the Company or any of its officers\nor directors; or (ii) preventing the consummation of the Merger.\n\n              (c) Governmental Consents. All necessary authorizations, consents,\norders or approvals of, or declarations or filings with, or expiration or waiver\nof waiting periods imposed by, any Governmental Entity of any applicable\njurisdiction required for the consummation of the transactions contemplated by\nthis Agreement shall have been filed, expired or obtained, as to which the\nfailure to obtain, make or occur would have the effect of making the Merger or\nthis Agreement or any of the transactions contemplated hereby illegal or which,\nindividually or in the aggregate, would have a Parent Material Adverse Effect\n(assuming the Merger had taken place), including, but not limited to: the\nexpiration or termination of the applicable waiting period, or any extensions\nthereof, pursuant to the HSR Act.\n\n         6.2. Conditions to Obligations of Parent. The obligation of Parent to\neffect the Merger is further subject to satisfaction or waiver of the following\nconditions:\n\n              (a) Representations and Warranties. The representations and\nwarranties of the Company set forth herein shall be true and correct both when\nmade and at and as of the Effective Date, as if made at and as of such time\n(except to the extent expressly made as of an earlier date, in which case as of\nsuch date), except where the failure of such representations and warranties to\nbe so true and correct (without giving effect to any limitation as to\nmateriality or material adverse effect set forth therein) does not have, and\nwould not, individually or in the aggregate, reasonably be expected to have, a\nCompany Material Adverse Effect.\n\n              (b) Performance of Obligations of the Company. The Company shall\nhave performed in all material respects all obligations required to be performed\nby it under this Agreement at or prior to the Effective Date.\n\n              (c) No Injunctions or Restraints. No final judgment, order,\ndecree, statute, law, ordinance, rule or regulation entered, enacted,\npromulgated, enforced or issued by any court or other Governmental Entity of\ncompetent jurisdiction or other legal restraint or prohibition shall be in\neffect (i) imposing material limitations on the ability of Parent to acquire or\nhold or to exercise full rights of ownership of any securities of the Company;\n(ii) imposing material limitations on the ability of Parent or its Affiliates to\ncombine and operate the business and assets of the Company; (iii) imposing other\nmaterial sanctions, damages, or liabilities directly arising out of the Merger\non Parent or any of its officers or directors; or (iv) requiring divestiture by\nParent of any significant portion of the business, assets or property of the\nCompany or of Parent.\n\n              (d) Delivery of Closing Documents. At or prior to the Effective\nTime, the Company shall have delivered to Parent all of the following:\n\n                  (i) a certificate of the President and the Chief Financial\n         Officer of the Company, dated as of the Effective Date, stating that\n         the conditions precedent set forth in Sections 6.2(a), (b) and (c)\n         hereof have been satisfied; and\n\n\n                                       37\n   42\n\n                  (ii) a copy of (A) the Articles of Incorporation of the\n         Company, dated as of a recent date, certified by the Secretary of State\n         of the State of Minnesota, (B) the Bylaws of the Company and (C) the\n         resolutions of the Company Board and shareholders authorizing the\n         Merger and the other transactions contemplated by this Agreement,\n         certified by the Secretary of the Company.\n\n              (e) Pooling Letters. The Company shall have received a letter from\nKPMG LLP addressed to the Company and dated as of the Effective Date, stating\nthat based on KPMG LLP's familiarity with the Company that the Company will\nqualify as a party to a pooling of interests transaction under Opinion 16, and\nParent shall have received a letter of KPMG LLP, addressed to the Parent and\ndated as of the Effective Date, stating that, in reliance on the letter\ndescribed in this paragraph (f) and based on its familiarity with Parent, the\nMerger will qualify as a pooling-of-interests transaction under Opinion 16,\nunless the failure to so qualify is solely as a result of any action taken by\nParent or Merger Sub on or after the date hereof and prior to the Effective\nDate.\n\n              (f) Company Affiliate Letters. Parent shall have received all of\nthe letters described in Section 5.15(a) hereof executed by each of the Company\nPooling Affiliates.\n\n              (g) Dissenting Shares. The aggregate amount of Dissenting Shares\n(as defined in Section 2.1(g) hereof) shall not exceed five percent of the total\nnumber of shares of Company Common Stock, on a fully diluted, as-converted basis\n(i.e., assuming issuance of all shares of Common Stock issuable upon the\nexercise or conversion of all securities outstanding immediately prior to the\nEffective Time which are convertible into or exercisable for shares of Company\nCommon Stock, whether or not vested), issued and outstanding immediately prior\nto the Effective Time.\n\n         6.3. Conditions to Obligations of the Company. The obligation of the\nCompany to effect the Merger is further subject to satisfaction or waiver of the\nfollowing conditions:\n\n              (a) Representations and Warranties. The representations and\nwarranties of Parent and Merger Sub set forth herein shall be true and correct\nboth when made and at and as of the Effective Date, as if made at and as of such\ntime (except to the extent expressly made as of an earlier date, in which case\nas of such date), except where the failure of such representations and\nwarranties to be so true and correct (without giving effect to any limitation as\nto materiality or material adverse effect set forth therein) does not have, and\nwould not, individually or in the aggregate, reasonably be expected to have a\nParent Material Adverse Effect.\n\n              (b) Performance of Obligations of Parent. Parent shall have\nperformed in all material respects all obligations required to be performed by\nit under this Agreement at or prior to the Effective Date.\n\n              (c) Delivery of Closing Documents. At or prior to the Effective\nTime, the Parent shall have delivered to the Company a certificate of the\nPresident and the Chief Financial Officer of Parent, dated as of the Effective\nDate, stating that the conditions precedent set forth in Sections 6.3(a) and (b)\nhereof have been satisfied.\n\n              (d) Tax Opinion. The Company shall have received an opinion from\nDorsey &amp; Whitney LLP, counsel to the Company, dated as of the Effective Time,\nsubstantially to the effect that, on the basis of the facts, representations and\nassumptions set forth in such opinion which are consistent with the state of\nfacts existing at the Effective Time, the Merger will be treated for Federal\n\n\n                                       38\n   43\n\nincome tax purposes as a reorganization within the meaning of Section 368(a) of\nthe Code and that accordingly:\n\n                  (i) No gain or loss will be recognized by the Company as a\n         result of the Merger;\n\n                  (ii) No gain or loss will be recognized by the shareholders of\n         the Company who exchange Company Common Stock for Parent Common Stock\n         pursuant to the Merger (except with respect to cash received in lieu of\n         a fractional shares);\n\n                  (iii) The tax basis of the Parent Common Stock received by the\n         stockholders who exchange all of their Company Common Stock in the\n         Merger will be the same as the tax basis of the Company Stock\n         surrendered in exchange therefor; and\n\n                  (iv) The holding period of the Parent Common Stock received by\n         a shareholder of the Company pursuant to the Merger will include the\n         period during which the Company Common Stock surrendered therefor was\n         held, provided the Company Common Stock is a capital asset in the hands\n         of the shareholder of the Company at the time of the Merger.\n\n         In rendering such opinion, such counsel may require and rely upon\nrepresentations and covenants including those contained in certificates of\nofficers of Parent, the Company and others. The foregoing notwithstanding, if\nDorsey &amp; Whitney LLP does not render such opinion, this condition shall\nnonetheless be deemed satisfied if Stradling Yocca Carlson &amp; Rauth renders such\nopinion to the Company (it being agreed that Parent and the Company shall each\nprovide reasonable cooperation, including making reasonable representations, to\nDorsey &amp; Whitney LLP or Stradling Yocca Carlson &amp; Rauth, as the case may be, to\nenable them to render such opinion).\n\n                                  ARTICLE VII\n                                   TERMINATION\n\n         7.1. Termination. This Agreement may be terminated at any time prior to\nthe Effective Time, whether before or after approval of the Merger by the\nCompany's shareholders or the Parent's stockholders:\n\n              (a) by mutual written consent of the Company and Parent (on behalf\nof Parent and Merger Sub);\n\n              (b) by either the Company or Parent (on behalf of Parent and\nMerger Sub):\n\n                  (i) if the Merger shall not have been completed by November\n         30, 2000; provided, however, that the right to terminate this Agreement\n         pursuant to this Section 7.1(b)(i) shall not be available to any party\n         whose failure to perform any of its obligations under this Agreement\n         results in the failure of the Merger to be consummated by such time;\n\n                  (ii) if shareholder approval shall not have been obtained at\n         the Company Shareholders Meeting duly convened therefor or at any\n         adjournment or postponement thereof; provided, however, that the right\n         to terminate this Agreement pursuant to this\n\n\n                                       39\n   44\n\n         Section 7.1(b)(ii) shall not be available to any party whose failure to\n         perform any of its obligations under this Agreement results in the\n         failure to obtain shareholder approval.\n\n                  (iii) if stockholder approval shall not have been obtained at\n         the Parent Stockholders Meeting duly convened therefor or at any\n         adjournment or postponement thereof; provided, however, that the right\n         to terminate this Agreement pursuant to this Section 7.1(b)(iii) shall\n         not be available to any party whose failure to perform any of its\n         obligations under this Agreement results in the failure to obtain\n         stockholder approval.\n\n                  (iv) if any restraint having any of the effects set forth in\n         Section 6.1(b) or Section 6.2(c) hereof shall be in effect and shall\n         have become final and nonappealable; provided, however, that the right\n         to terminate this Agreement pursuant to this Section 7.1(b)(iv) shall\n         not be available to any party whose failure to perform any of its\n         obligations under this Agreement results in such restraint to continue\n         in effect; or\n\n                  (v) if the Company enters into a merger, acquisition or other\n         agreement (including an agreement in principle) or understanding to\n         effect a Superior Proposal or the Company Board or a committee thereof\n         resolves to do so; provided, however, that the Company may not\n         terminate this Agreement pursuant to this Section 7.1(b)(v) unless (a)\n         the Company has delivered to Parent and Merger Sub a written notice of\n         the Company's intent to enter into such an agreement to effect such\n         Acquisition Proposal, which notice shall include, without limitation,\n         the material terms and conditions of the Acquisition Proposal and the\n         identity of the Person making the Acquisition Proposal, (b) three\n         business days have elapsed following delivery to Parent and Merger Sub\n         of such written notice by the Company and (c) during such\n         three-business-day period, the Company has cooperated with Parent and\n         Merger Sub to allow Parent and Merger Sub within such\n         three-business-day period to propose amendments to the terms of this\n         Agreement to be at least as favorable as the Superior Proposal;\n         provided, further, that the Company may not terminate this Agreement\n         pursuant to this Section 7.1(b)(v) unless, at the end of such\n         three-business-day-period, the Company Board continues reasonably to\n         believe that the Acquisition Proposal constitutes a Superior Proposal;\n\n              (c) by the Company\n\n                  (i) if Parent or Merger Sub shall have breached any of its\n         representations and warranties contained in Article IV hereof which\n         breach has had or is reasonably likely to have a Parent Material\n         Adverse Effect or Parent or Merger Sub shall have breached or failed to\n         perform in any material respect any of its covenants or other\n         agreements contained in this Agreement, in each case, which breach or\n         failure to perform has not been cured by Parent or Merger Sub within\n         thirty days following receipt of notice thereof from the Company;\n\n                  (ii) if (a) the Parent Board or any committee thereof shall\n         have withdrawn or modified in a manner adverse to the Company its\n         approval or recommendation of this Agreement, or (b) the Parent Board\n         or any committee thereof shall have resolved to take any of the\n         foregoing actions; or\n\n\n                                       40\n   45\n\n              (d) by Parent (on behalf of Parent and Merger Sub):\n\n                  (i) if the Company shall have breached any of its\n         representations and warranties contained in Article III hereof which\n         breach has had or is reasonably likely to have a Company Material\n         Adverse Effect or the Company shall have breached or failed to perform\n         in any material respect any of its covenants or other agreements\n         contained in this Agreement, in each case (other than a breach of\n         Section 5.6(b) hereof, as to which no materiality requirement and no\n         cure period shall apply), which breach or failure to perform has not\n         been cured by the Company within thirty days following receipt of\n         notice thereof from Parent; or\n\n                  (ii) if (a) the Company Board or any committee thereof shall\n         have withdrawn or modified in a manner adverse to Parent its approval\n         or recommendation of the Merger or this Agreement, or approved or\n         recommended an Acquisition Proposal, or (b) the Company Board or any\n         committee thereof shall have resolved to take any of the foregoing\n         actions.\n\n         7.2. Effect of Termination. The termination of this Agreement pursuant\nto the terms of Section 7.1 hereof shall become effective upon delivery to the\nother party of written notice thereof. In the event of the termination of this\nAgreement pursuant to the foregoing provisions of this Article VII, there shall\nbe no obligation or liability on the part of any party hereto (except as\nprovided in Section 7.3 hereof) or its shareholders or directors or officers in\nrespect thereof, except for agreements which survive the termination of this\nAgreement, except for liability that Parent or Merger Sub or the Company might\nhave to the other party or parties arising from a breach of this Agreement due\nto termination of this Agreement in accordance with Sections 7.1(c)(i) or\n7.1(d)(i) or due to the fraudulent or willful misconduct of such party, and\nexcept that the termination of the Company Option Agreement shall be governed by\nits terms.\n\n         7.3. Fees and Expenses.\n\n              (a) Except as provided in this Section 7.3, whether or not the\nMerger is consummated, the Company, on the one hand, and Parent and Merger Sub,\non the other, shall bear their respective expenses incurred in connection with\nthe Merger, including, without limitation, the preparation, execution and\nperformance of this Agreement and the transactions contemplated hereby, and all\nfees and expenses of investment bankers, finders, brokers, agents,\nrepresentatives, counsel and accountants, except that the registration and\nfiling fees incurred in connection with the filing under the HSR Act and the\nRegistration Statement and Joint Proxy Statement\/Prospectus shall be shared\nequally by the Company and Parent.\n\n              (b) Notwithstanding any provision in this Agreement to the\ncontrary, if this Agreement is terminated as a result of a breach of this\nAgreement in accordance with Sections 7.1(c)(i) or 7.1(d)(i), then the\nnonbreaching party shall be entitled to receive from the breaching party damages\nresulting from such breach, including without limitation, all out-of-pocket fees\nand expenses incurred or paid by or on behalf of the nonbreaching party or any\nAffiliate of the nonbreaching party in connection with this Agreement, the\nMerger and transactions contemplated herein, including all fees and expenses of\ncounsel, investment banking firm, accountants and consultants; provided,\nhowever, that no payments for damages shall be payable to any party pursuant to\nthis Section 7.3(b) if a Termination Fee is paid to such party pursuant to\nSection 7.3(c) or 7.3(d) below.\n\n\n                                       41\n   46\n\n              (c) Notwithstanding any other provision in this Agreement to the\ncontrary, if (x) this Agreement is terminated by the Company or Parent at a time\nwhen Parent or the Company is entitled to terminate this Agreement pursuant to\nSection 7.1(b)(ii) (except if, immediately prior to the Company Shareholder\nMeeting, an event or condition exists that would result in a Parent Material\nAdverse Effect or 7.1(d)(i) and, concurrently with or within twelve months after\nsuch a termination, the Company shall enter into an agreement, or binding\narrangement or understanding with respect to an Acquisition Proposal (which\nshall include, for this purpose, the commencement by a third party of a tender\noffer or exchange offer or similar transaction directly with the Company's\nshareholders) with a third party (collectively, a \"Third Party Deal\") or (y)\nthis Agreement is terminated pursuant to Section 7.1(b)(v), or 7.1(d)(ii)\n(except, in the case of 7.1(d)(ii) only, if the Company Board's withdrawal or\nmodification of its approval or recommendation of this Agreement or the Merger\noccurs after the occurrence of a Parent Material Adverse Effect), then, in each\ncase, the Company shall (in lieu of any obligation under this Agreement and as\nliquidated damages and not as a penalty or forfeiture) pay to Parent U.S.\n55,000,000 (the \"Parent Termination Fee\") in cash. Such payment shall be made\npromptly, but in no event later than the second business day following: (i) in\nthe case of clause (x) relating to a termination pursuant to Section 7.1(d)(i)\nas a result of a breach of Section 5.6, the later to occur of such termination\nand the entry of such Third Party Deal; (ii) in the case of clause (x) other\nthan as set forth in the immediately preceding clause (i), the later to occur of\nsuch termination and the consummation of such Third Party Deal; and (iii) in the\ncase of clause (y) such termination.\n\n              (d) Notwithstanding any other provision in this Agreement to the\ncontrary, if (x) this Agreement is terminated by the Company or Parent at a time\nwhen Parent or the Company is entitled to terminate this Agreement pursuant to\nSection 7.1(b)(iii) (except if immediately prior to the Parent Stockholder\nMeeting, an event or condition exists that would result in a Company Material\nAdverse Effect), or (y) this Agreement is terminated by the Company pursuant to\nSection 7.1(c)(ii) (except if the Parent Board's withdrawal or modification of\nits approval or recommendation of this Agreement occurs after a Company Material\nAdverse Effect), then, in each case Parent shall (in lieu of any obligation\nunder this Agreement and as liquidated damages and not as a penalty or\nforfeiture) pay to the Company $55,000,000 (the \"Company Termination Fee\") in\ncash, such payment to be made promptly, but in no event later than the second\nbusiness day following such termination.\n\n              (e) The parties acknowledge that the agreements contained in\nSections 7.3(b), (c) and (d) hereof are an integral part of the transactions\ncontemplated by this Agreement, and that, without these agreements, Parent and\nMerger Sub on the one hand, and the Company on the other, would not enter into\nthis Agreement. Accordingly, if the Company fails promptly to pay the amounts\ndue pursuant to Sections 7.3(b) and\/or (c) hereof, or if Parent fails promptly\nto pay the amounts due pursuant to Section 7.3(b) and\/or (d) hereof, (i) the\nparty failing to so pay shall pay interest on such amounts at the prime rate\nannounced by Silicon Valley Bank, Irvine, California, in effect on the date the\nTermination Fee (or fees and expenses) were required to be paid, and (ii) if, in\norder to obtain such payment, a party commences a suit or takes other action\nwhich results in a judgment or other binding determination against the nonpaying\nparty for the fees and expenses in Sections 7.3(b), 7.3(c) or 7.3(d) hereof, the\nnonpaying party shall also pay to the party entitled to receive payment its\ncosts and expenses (including reasonable attorneys' fees) in connection with\nsuch suit, together with interest payable under the preceding clause (i).\n\n\n                                       42\n   47\n\n                                  ARTICLE VIII\n                                  MISCELLANEOUS\n\n         8.1. Nonsurvival of Representations and Warranties. None of the\nrepresentations and warranties in this Agreement or in any instrument delivered\npursuant to this Agreement shall survive the Effective Time. This Section 8.1\nshall not limit any covenant or agreement of the parties which by its terms\ncontemplates performance after the Effective Time.\n\n         8.2. Waiver. At any time prior to the Effective Date, any party hereto\nmay (a) extend the time for the performance of any of the obligations or other\nacts of any other party hereto, (b) waive any inaccuracies in the\nrepresentations and warranties of the other party contained herein or in any\ndocument delivered pursuant hereto, and (c) waive compliance with any of the\nagreements of any other party or with any conditions to its own obligations\ncontained herein. Any agreement on the part of a party hereto to any such\nextension or waiver shall be valid only if set forth in an instrument in writing\nduly authorized by and signed on behalf of such party.\n\n         8.3. Attorneys' Fees. Should suit be brought to enforce or interpret\nany part of this Agreement, the prevailing party will be entitled to recover, as\nan element of the costs of suit and not as damages, reasonable attorneys' fees\nto be fixed by the court (including, without limitation, costs, expenses and\nfees on any appeal).\n\n         8.4. Notices.\n\n              (a) Any notice or communication to any party hereto shall be duly\ngiven if in writing and delivered in person or mailed by first class mail and\nairmail, if overseas (registered or return receipt requested), facsimile (with\nreceipt electronically acknowledged) or overnight air courier guaranteeing next\nday delivery, to such other party's address.\n\n                  If to Parent:\n\n                  QLogic Corporation\n                  26600 Laguna Hills Drive\n                  Aliso Viejo, CA 92656\n                  Telephone No.: (949) 389-6000\n                  Facsimile No.: (949) 389-6488\n                  Attention:  H.K. Desai\n\n                  with a copy to:\n\n                  Stradling Yocca Carlson &amp; Rauth\n                  660 Newport Center Drive, Suite 1600\n                  Newport Beach, CA 92660\n                  Telephone No.: (949) 725-4000\n                  Facsimile No.: (949) 725-4100\n                  Attention: Nick E. Yocca, Esq.\n\n\n                                       43\n   48\n\n                  If to the Company:\n\n                  Ancor Communications, Incorporated\n                  6321 Bury Drive, Suite 13\n                  Eden Prairie, Minnesota  55346-1739\n                  Telephone No.: (952) 932-4000\n                  Facsimile No.: (952) 932-4037\n                  Attention: Ken Hendrickson\n\n                  with copies to:\n\n                  Dorsey &amp; Whitney LLP\n                  220 South Sixth Street\n                  Minneapolis, Minnesota 55402\n                  Telephone No.: (612) 340-2600\n                  Facsimile No.: (612) 340-8738\n                  Attention:  William B. Payne\n\n              (b) All notices and communications will be deemed to have been\nduly given: at the time delivered by hand, if personally delivered; three\nbusiness days after being deposited in the mail, if mailed; when sent, if sent\nby facsimile; and one business day after timely delivery to the courier, if sent\nby overnight air courier guaranteeing next day delivery.\n\n         8.5. Counterparts. This Agreement may be executed via facsimile in two\nor more counterparts, each of which shall be deemed an original, but all of\nwhich together shall constitute one and the same instrument.\n\n         8.6. Interpretation; Construction. The language used in this Agreement\nand the other agreements contemplated hereby shall be deemed to be the language\nchosen by the parties to express their mutual intent, and no rule of strict\nconstruction shall be applied against any party. The headings of articles and\nsections herein are for convenience of reference, do not constitute a part of\nthis Agreement, and shall not be deemed to limit or affect any of the provisions\nhereof. As used in this Agreement, \"Person\" means any individual, corporation,\nlimited liability company, limited or general partnership, joint venture,\nassociation, joint stock company, trust, unincorporated organization or other\nentity; \"Knowledge\" means the actual knowledge of a director or any executive\nofficer of the applicable party or any of its Subsidiaries, as such knowledge\nhas been obtained or would have been obtained after reasonable inquiry by such\nperson in the normal conduct of the business; and all amounts shall be deemed to\nbe stated in U.S. dollars, unless specifically referenced otherwise.\n\n         8.7. Amendment. This Agreement may be amended by the parties at any\ntime before or after any required approval of matters presented in connection\nwith the Merger by the shareholders of the Company or the stockholders of\nParent; provided, however, that after any such approval, there shall not be made\nany amendment that by law requires further approval by the shareholders of the\nCompany or the stockholders of Parent without obtaining such further approval.\nThis Agreement may not be amended except by an instrument in writing signed on\nbehalf of each of the parties.\n\n         8.8. No Third Party Beneficiaries. Except for the provisions of Section\n5.10 hereof (which is intended to be for the benefit of the persons referred to\ntherein, and may be enforced by\n\n\n                                       44\n   49\n\nsuch persons) nothing in this Agreement shall confer any rights upon any person\nor entity which is not a party or permitted assignee of a party to this\nAgreement.\n\n         8.9. Governing Law. This Agreement shall be governed by, and construed\nin accordance with, the laws of the State of Delaware. Each party hereby\nirrevocably waives the right to any jury trial in connection with any action or\nproceeding brought or maintained in connection with this Agreement.\n\n         8.10. Entire Agreement. This Agreement (together with the Exhibits and\nthe Company Disclosure Letter, and the other documents delivered pursuant hereto\nor contemplated hereby) constitutes the entire agreement between the parties\nwith respect to the subject matter hereof and supersedes all other prior\nagreements and understandings, both written and oral, between the parties with\nrespect to the subject matter hereof, in each case other than the Company Option\nAgreement and the Reciprocal Confidentiality Agreement.\n\n         8.11. Validity. The invalidity or unenforceability of any provision of\nthis Agreement shall not affect the validity or enforceability of any other\nprovisions of this Agreement, which shall remain in full force and effect. Upon\nsuch determination that any term or other provision is invalid, illegal or\nincapable of being enforced, the parties shall negotiate in good faith to modify\nthis Agreement so as to effect the original intent of the parties as closely as\npossible in an acceptable manner to the end that transactions contemplated\nhereby are fulfilled to the extent possible.\n\n\n                                       45\n   50\n\n         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be\nexecuted by their duly authorized officers all as of the day and year first\nabove written.\n\n                               QLOGIC CORPORATION\n\n\n                               By: \/s\/ H.K. Desai\n                                   ---------------------------------------------\n                                   H.K. Desai, President and\n                                   Chief Executive Officer\n\n\n                               AMINO ACQUISITION CORP.\n\n\n                               By: \/s\/ H.K. Desai\n                                   ---------------------------------------------\n                                   H.K. Desai, President\n\n\n                               ANCOR COMMUNICATIONS, INCORPORATED\n\n\n                               By: \/s\/ Ken Hendrickson\n                                   ---------------------------------------------\n                                   Ken Hendrickson, Chief Executive Officer\n\n\n                                       46\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6701,8613],"corporate_contracts_industries":[9509,9512],"corporate_contracts_types":[9622,9626],"class_list":["post-43107","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-ancor-communications-inc","corporate_contracts_companies-qlogic-corp","corporate_contracts_industries-technology__networking","corporate_contracts_industries-technology__semiconductors","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\/43107","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=43107"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43107"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43107"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}