AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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DOUBLECLICK INC | CLICK HOLDING CORP., | CLICK ACQUISITION CORP.

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Delaware Date: 4/25/2005
Industry: Advertising Law Firm: Simpson Thacher & Bartlett LLP; Wilmer Cutler Pickering Hale and Dorr LLP Sector: Services

AGREEMENT AND PLAN OF MERGER, Parties: doubleclick inc , click holding corp. , click acquisition corp.

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Exhibit 2.1

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

CLICK HOLDING CORP.,

CLICK ACQUISITION CORP.

AND

DOUBLECLICK INC.

DATED AS OF APRIL 23, 2005

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TABLE OF CONTENTS

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ARTICLE I THE MERGER............................................................................................. 1

1.1 Effective Time of the Merger.......................................................................... 1

1.2 Closing............................................................................................... 1

1.3 Effects of the Merger................................................................................. 2

1.4 Certificate of Incorporation.......................................................................... 2

1.5 By-laws............................................................................................... 2

1.6 Directors and Officers of the Surviving Corporation................................................... 2

ARTICLE II CONVERSION OF SECURITIES.............................................................................. 2

2.1 Conversion of Capital Stock........................................................................... 2

2.2 Exchange of Certificates.............................................................................. 3

2.3 Company Stock Options................................................................................. 5

2.4 Dissenting Shares..................................................................................... 6

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................ 6

3.1 Organization, Standing and Power...................................................................... 7

3.2 Capitalization........................................................................................ 8

3.3 Subsidiaries.......................................................................................... 9

3.4 Authority; No Conflict; Required Filings and Consents................................................. 11

3.5 SEC Filings; Financial Statements; Information Provided............................................... 13

3.6 No Undisclosed Liabilities............................................................................ 14

3.7 Absence of Certain Changes or Events.................................................................. 14

3.8 Taxes................................................................................................. 14

3.9 Owned and Leased Real Properties...................................................................... 17

3.10 Title to Tangible Personal Property................................................................... 17

3.11 Intellectual Property................................................................................. 17

3.12 Contracts............................................................................................. 19

3.13 Litigation............................................................................................ 20

3.14 Environmental Matters................................................................................. 21

3.15 Employee Benefit Plans................................................................................ 22

3.16 Compliance With Laws.................................................................................. 24

3.17 Permits............................................................................................... 24

3.18 Labor Matters......................................................................................... 25

3.19 Insurance............................................................................................. 25

3.20 Opinion of Financial Advisor.......................................................................... 25

3.21 Section 203 of the DGCL............................................................................... 25

3.22 Brokers; Fees......................................................................................... 25

3.23 Transactions with Affiliates.......................................................................... 26

3.24 Privacy and Security.................................................................................. 26

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE TRANSITORY SUBSIDIARY............................. 27

4.1 Organization, Standing and Power...................................................................... 27

4.2 Authority; No Conflict; Required Filings and Consents................................................. 27

4.3 Information Provided.................................................................................. 28

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4.4 Operations of the Buyer and the Transitory Subsidiary................................................. 29

4.5 Litigation............................................................................................ 29

4.6 Financing............................................................................................. 29

4.7 Management Arrangements............................................................................... 30

ARTICLE V CONDUCT OF BUSINESS.................................................................................... 30

5.1 Covenants of the Company.............................................................................. 30

5.2 Confidentiality....................................................................................... 34

5.3 Financing Commitments................................................................................. 34

5.4 Zero Coupon Notes..................................................................................... 36

ARTICLE VI ADDITIONAL AGREEMENTS................................................................................. 36

6.1 No Solicitation....................................................................................... 36

6.2 Proxy Statement....................................................................................... 40

6.3 Nasdaq Quotation...................................................................................... 40

6.4 Access to Information................................................................................. 40

6.5 Stockholders Meeting.................................................................................. 41

6.6 Legal Requirements.................................................................................... 41

6.7 Public Disclosure..................................................................................... 42

6.8 Indemnification....................................................................................... 43

6.9 Notification of Certain Matters....................................................................... 44

6.10 Exemption from Liability Under Section 16............................................................. 44

6.11 Employee Compensation................................................................................. 45

6.12 Accrued Personal, Sick or Vacation Time............................................................... 45

6.13 Service Credit........................................................................................ 45

6.14 No Benefit to Third Party............................................................................. 46

6.15 Resignations.......................................................................................... 46

ARTICLE VII CONDITIONS TO MERGER................................................................................. 46

7.1 Conditions to Each Party's Obligation To Effect the Merger............................................ 46

7.2 Additional Conditions to Obligations of the Buyer and the Transitory Subsidiary....................... 46

7.3 Additional Conditions to Obligations of the Company................................................... 47

ARTICLE VIII TERMINATION AND AMENDMENT........................................................................... 48

8.1 Termination........................................................................................... 48

8.2 Effect of Termination................................................................................. 49

8.3 Fees and Expenses..................................................................................... 50

8.4 Amendment............................................................................................. 51

8.5 Extension; Waiver..................................................................................... 51

ARTICLE IX MISCELLANEOUS......................................................................................... 51

9.1 Nonsurvival of Representations, Warranties and Agreements............................................. 51

9.2 Notices............................................................................................... 51

9.3 Entire Agreement...................................................................................... 52

9.4 No Third Party Beneficiaries.......................................................................... 52

9.5 Assignment............................................................................................ 53

9.6 Severability.......................................................................................... 53

9.7 Counterparts and Signature............................................................................ 53

9.8 Interpretation........................................................................................ 53

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9.9 Governing Law......................................................................................... 54

9.10 Remedies.............................................................................................. 54

9.11 Submission to Jurisdiction............................................................................ 54

9.12 WAIVER OF JURY TRIAL.................................................................................. 54

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Exhibit A - Company Certificate of Incorporation

Exhibit B - Transitory Subsidiary By-laws

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TABLE OF DEFINED TERMS

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Reference in

Terms Agreement

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Acquired Company Plan Section 3.15(a)

Acquisition Proposal Section 6.1(f)

Affiliate Section 3.2(c)

Agreement Preamble

Alternative Acquisition Agreement Section 6.1(b)(ii)

Antitrust Laws Section 6.6(b)

Antitrust Order Section 6.6(b)

Bankruptcy and Equity Exception Section 3.4(a)

Business Day Section 1.2

Buyer Preamble

Buyer Material Adverse Effect Section 4.1

Certificate Section 2.2(b)

Certificate of Merger Section 1.1

Change in the Company Recommendation Section 6.1(b)

Closing Section 1.2

Closing Date Section 1.2

Code Section 2.2(f)

Commitment Letters Section 4.3(a)

Company Preamble

Company Balance Sheet Section 3.5(b)

Company Board Section 3.4(a)

Company Charter Documents Section 3.1(b)

Company Common Stock Section 2.1(b)

Company Disclosure Schedule Article III

Company Employees Section 3.15(a)

Company Employee Plans Section 3.15(a)

Company Leases Section 3.9(b)

Company Material Adverse Effect Section 3.1(a)

Company Material Contract Section 3.12(a)

Company Meeting Section 3.4(d)

Company Permits Section 3.17

Company Preferred Stock Section 3.2(a)

Company Recommendation Section 6.2

Company SEC Reports Section 3.5(a)

Company Stock Options Section 2.3(a)(i)

Company Stock Plans Section 2.3(a)(i)

Company Stockholder Approval Section 3.4(a)

Company Voting Proposal Section 3.4(a)

Company Warrants Section 3.2(b)

Confidentiality Agreement Section 5.2

Continuing Employees Section 6.11

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Reference in

Terms Agreement

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Contract Section 3.4(b)

Costs Section 6.8(a)

Debt Commitment Letter Section 4.6(a)

DGCL Preamble

Dissenting Shares Section 2.4(a)

Effective Time Section 1.1

Employee Benefit Plan Section 3.15(a)

Environmental Law Section 3.14(b)

Equity Commitment Letter Section 4.6(a)

Equity Participants Section 4.6(a)

ERISA Section 3.15(a)

ERISA Affiliate Section 3.15(a)

Exchange Act Section 3.3(a)

Exchange Agent Section 2.2(a)

Exchange Fund Section 2.2(a)

Foreign Benefit Plan Section 3.15(i)

GAAP Section 3.5(b)

Governmental Entity Section 3.4(c)

Hazardous Substance Section 3.14(c)

HSR Act Section 3.4(c)

Indebtedness Section 3.2(f)

Indemnified Parties Section 6.8(a)

Insurance Cap Section 6.8(c)

Intellectual Property Section 3.11(a)

Intellectual Property Licenses Section 3.11(b)

IRS Section 3.8(b)

Leases Section 3.9(b)

Liens Section 3.4(b)

Material Subsidiary Section 3.3(a)

Merger Preamble

Merger Consideration Section 2.1(c)

Notes Indenture Section 5.4

Option Consideration Section 2.3(b)

Outside Date Section 8.1(b)

Owned Real Property Section 3.9(a)

Pre-Closing Period Section 5.1

Privacy Rights Section 3.24(a)

Proxy Statement Section 3.5(c)

PSV Policies Section 6.12

Required Company Stockholder Vote Section 3.4(d)

Representatives Section 6.1(a)

SEC Section 3.3(a)

Securities Act Section 3.2(c)

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Reference in

Terms Agreement

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Senior Lenders Section 4.6(a)

Subsidiary Section 3.3(a)

Subsidiary Charter Documents Section 3.3(c)

Superior Proposal Section 6.1(f)

Surviving Corporation Section 1.3

Surviving Corporation Employee Plan Section 6.13

Tax Returns Section 3.8(a)

Taxes Section 3.8(a)

Transitory Subsidiary Preamble

2005 Annual Operating Plan Section 5.1(d)

Zero Coupon Notes Section 3.2(c)

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as

of April 23, 2005, by and among Click Holding Corp., a Delaware corporation

(the "Buyer"), Click Acquisition Corp., a Delaware corporation and a wholly

owned subsidiary of the Buyer (the "Transitory Subsidiary"), and DoubleClick

Inc., a Delaware corporation (the "Company").

WHEREAS, the Boards of Directors of the Buyer and the Company deem it

advisable and in the best interests of each corporation and their respective

stockholders that the Buyer acquire the Company in order to advance the

long-term business interests of the Buyer and the Company;

WHEREAS, the acquisition of the Company shall be effected through a merger

(the "Merger") of the Transitory Subsidiary with and into the Company in

accordance with the terms of this Agreement and the Delaware General Corporation

Law (the "DGCL"), as a result of which the Company shall become a wholly owned

subsidiary of the Buyer; and

WHEREAS, the respective Boards of Directors of the Buyer, the Transitory

Subsidiary and the Company deem it advisable and in the best interests of their

respective stockholders to consummate the Merger on the terms and conditions set

forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the respective

representations, warranties, covenants and agreements set forth below, and for

other good and valuable consideration, the receipt and sufficiency of which are

hereby acknowledged, the Buyer, the Transitory Subsidiary and the Company agree

as follows:

ARTICLE I

THE MERGER

1.1 Effective Time of the Merger. Subject to the provisions of this

Agreement, at or prior to the Closing, the Buyer and the Company shall jointly

prepare and cause to be filed with the Secretary of State of Delaware a

certificate of merger (the "Certificate of Merger") in such form as is required

by, and executed by the Company in accordance with, the relevant provisions of

the DGCL and shall make all other filings or recordings required under the DGCL.

The Merger shall become effective upon the filing of the Certificate of Merger

with the Secretary of State of Delaware or at such later time as is established

by the Buyer and the Company and set forth in the Certificate of Merger (the

"Effective Time").

1.2 Closing. The closing of the Merger (the "Closing") shall take place at

10:00 a.m., Eastern time, on a date to be specified by the Buyer and the Company

(the "Closing Date"), which shall be no later than the second Business Day after

satisfaction or waiver of the conditions set forth in Article VII (other than

delivery of items to be delivered at the Closing and other than satisfaction of

those conditions that by their nature are to be satisfied at the Closing, it

being understood that the occurrence of the Closing shall remain subject to the

delivery of such items and the satisfaction or waiver of such conditions at the

Closing), at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 399 Park

Avenue, New York, New York, unless another

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date, place or time is agreed to in writing by the Buyer and the Company. For

purposes of this Agreement, a "Business Day" shall be any day other than (a) a

Saturday or Sunday or (b) a day on which banking institutions located in New

York, New York are permitted or required by law, executive order or governmental

decree to remain closed.

1.3 Effects of the Merger. At the Effective Time, the separate existence

of the Transitory Subsidiary shall cease and the Transitory Subsidiary shall be

merged with and into the Company (the Company surviving the Merger is sometimes

referred to herein as the "Surviving Corporation"). The Merger shall have the

effects set forth in Section 259 of the DGCL.

1.4 Certificate of Incorporation. At the Effective Time, the Certificate

of Incorporation of the Company, as in effect immediately prior to the Effective

Time, shall be amended and restated to read in its entirety as set forth in

Exhibit A attached hereto and, as so amended and restated, shall be the

Certificate of Incorporation of the Surviving Corporation until thereafter

amended in accordance with the provisions thereof and as provided by applicable

law.

1.5 By-laws. At the Effective Time, the By-laws of the Transitory

Subsidiary, as in effect immediately prior to the Effective Time and as set

forth in Exhibit B attached hereto, shall become the By-laws of the Surviving

Corporation until thereafter amended as provided by applicable law, the

Certificate of Incorporation of the Surviving Corporation and such By-laws.

1.6 Directors and Officers of the Surviving Corporation.

(a) The directors of the Transitory Subsidiary immediately prior to

the Effective Time shall be the initial directors of the Surviving Corporation,

each to hold office in accordance with the Certificate of Incorporation and

By-laws of the Surviving Corporation.

(b) The officers of the Company immediately prior to the Effective

Time shall be the initial officers of the Surviving Corporation, each to hold

office in accordance with the Certificate of Incorporation and By-laws of the

Surviving Corporation.

ARTICLE II

CONVERSION OF SECURITIES

2.1 Conversion of Capital Stock. As of the Effective Time, by virtue of

the Merger and without any action on the part of the holder of any shares of the

capital stock of the Company or capital stock of the Transitory Subsidiary:

(a) Capital Stock of the Transitory Subsidiary. Each share of the

common stock, par value $0.01 per share, of the Transitory Subsidiary issued and

outstanding immediately prior to the Effective Time shall be converted into and

become one fully paid and nonassessable share of common stock, $0.01 par value

per share, of the Surviving Corporation.

(b) Cancellation of Treasury Stock and Buyer-Owned Stock. All shares

of common stock, $0.001 par value per share, of the Company ("Company Common

Stock") that

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are owned by the Company as treasury stock and any shares of Company Common

Stock owned by the Buyer, the Transitory Subsidiary or any other wholly owned

Subsidiary of the Buyer immediately prior to the Effective Time shall be

cancelled and shall cease to exist and no stock of the Buyer or other

consideration shall be delivered in exchange therefor.

Section 2.2, each share of Company Common Stock (other than (i) shares to be

cancelled in accordance with Section 2.1(b), (ii) shares owned by any wholly

owned Subsidiary of the Company which shall remain outstanding and (iii)

Dissenting Shares (as defined in Section 2.4(a) below)) issued and outstanding

immediately prior to the Effective Time shall be automatically converted into

the right to receive $8.50 in cash per share (the "Merger Consideration"). As of

the Effective Time, all such shares of Company Common Stock shall no longer be

outstanding and shall automatically be cancelled and shall cease to exist, and

each holder of a certificate representing any such shares of Company Common

Stock shall cease to have any rights with respect thereto, except the right to

receive the Merger Consideration pursuant to this Section 2.1(c) upon the

surrender of such certificate in accordance with Section 2.2, without interest.

(d) Adjustments to Merger Consideration. The Merger Consideration

shall be adjusted to reflect fully the effect of any reclassification, stock

split, reverse split, stock dividend (including any dividend or distribution of

securities convertible into Company Common Stock), reorganization,

recapitalization or other like change with respect to Company Common Stock

occurring (or for which a record date is established) after the date hereof and

prior to the Effective Time.

2.2 Exchange of Certificates. The procedures for exchanging certificates

representing shares of Company Common Stock for the Merger Consideration

pursuant to the Merger are as follows:

(a) Exchange Agent. At or prior to the Effective Time (or with

respect to the Merger Consideration expected to be funded out of cash, cash

equivalents and marketable securities of the Company, as promptly as practicable

thereafter), the Buyer (or with respect to Merger Consideration expected to be

funded out of such cash, cash equivalents and marketable securities of the

Company, the Company) shall deposit with American Stock Transfer & Trust Company

or another bank or trust company mutually acceptable to the Buyer and the

Company (the "Exchange Agent"), for the benefit of the holders of shares of

Company Common Stock outstanding immediately prior to the Effective Time, for

payment through the Exchange Agent in accordance with this Section 2.2, cash in

an amount sufficient to make payment of the Merger Consideration pursuant to

Section 2.1(c) in exchange for all of the outstanding shares of Company Common

Stock (the "Exchange Fund").

(b) Exchange Procedures. Promptly after the Effective Time, the

Buyer shall cause the Exchange Agent to mail to each holder of record of a

certificate which immediately prior to the Effective Time represented

outstanding shares of Company Common Stock (each, a "Certificate") (i) a letter

of transmittal in customary form and (ii) instructions for effecting the

surrender of the Certificates in exchange for the Merger Consideration payable

with respect

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thereto. Upon surrender of a Certificate for cancellation to the Exchange Agent,

together with such letter of transmittal, duly executed, the holder of such

Certificate shall be entitled to receive in exchange therefor the Merger

Consideration that such holder has the right to receive pursuant to the

provisions of this Article II, and the Certificate so surrendered shall

immediately be cancelled. In the event of a transfer of ownership of Company

Common Stock which is not registered in the transfer records of the Company, the

Merger Consideration may be paid to a person other than the person in whose name

the Certificate so surrendered is registered, if such Certificate is presented

to the Exchange Agent, accompanied by all documents required to evidence and

effect such transfer and by evidence that any applicable stock transfer taxes

have been paid. Until surrendered as contemplated by this Section 2.2, each

Certificate shall be deemed at any time after the Effective Time to represent

only the right to receive upon such surrender the Merger Consideration as

contemplated by this Section 2.2.

Consideration paid upon the surrender for exchange of Certificates evidencing

shares of Company Common Stock in accordance with the terms hereof shall be

deemed to have been paid in satisfaction of all rights pertaining to such shares

of Company Common Stock, and from and after the Effective Time there shall be no

further registration of transfers on the stock transfer books of the Surviving

Corporation of the shares of Company Common Stock which were outstanding

immediately prior to the Effective Time. If, after the Effective Time,

Certificates are presented to the Surviving Corporation or the Exchange Agent

for any reason, they shall be cancelled and exchanged as provided in this

Article II.

(d) Termination of Exchange Fund. Any portion of the Exchange Fund

which remains undistributed to the holders of Company Common Stock for one year

after the Effective Time shall be delivered to the Buyer, upon demand, and any

holder of Company Common Stock who has not previously complied with this Section

2.2 shall look only to the Buyer (subject to abandoned property, escheat and

similar laws) for payment of its claim for Merger Consideration without

interest.

(e) No Liability. To the extent permitted by applicable law, none of

the Buyer, the Transitory Subsidiary, the Company, the Surviving Corporation or

the Exchange Agent shall be liable to any holder of shares of Company Common

Stock delivered to a public official pursuant to any applicable abandoned

property, escheat or similar law.

(f) Withholding Rights. Each of the Buyer and the Surviving

Corporation shall be entitled to deduct and withhold from the consideration

otherwise payable pursuant to this Agreement to any holder of shares of Company

Common Stock such amounts as it is required to deduct and withhold with respect

to the making of such payment under the Internal Revenue Code of 1986, as

amended (the "Code"), or any other applicable state, local or foreign tax law.

To the extent that amounts are so withheld by the Surviving Corporation or the

Buyer, as the case may be, such withheld amounts (i) shall be remitted by the

Buyer or the Surviving Corporation, as the case may be, to the applicable

Governmental Entity, and (ii) shall be treated for all purposes of this

Agreement as having been paid to the holder of the shares of Company Common

Stock in respect of which such deduction and withholding was made by the

Surviving Corporation or the Buyer, as the case may be.

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(g) Lost Certificates. If any Certificate shall have been lost,

stolen or destroyed, upon the making of an affidavit of that fact by the person

claiming such Certificate to be lost, stolen or destroyed, the Exchange Agent

shall issue in exchange for such lost, stolen or destroyed Certificate the

Merger Consideration deliverable in respect thereof pursuant to this Agreement.

(h) Stock Transfer Books. At the close of business, New York City

time, on the day the Effective Time occurs, the stock transfer books of the

Company shall be closed and there shall be no further registration of transfers

of shares thereafter on the records of the Company. From and after the Effective

Time, the holders of Certificates representing shares of Company Common Stock

outstanding immediately prior to the Effective Time shall cease to have any

rights with respect to such shares, except as otherwise provided in this

Agreement or by applicable law. On or after the Effective Time, any Certificates

presented to the Exchange Agent or the Buyer for any reason shall be canceled

against delivery of the Merger Consideration to which the holders thereof are

entitled pursuant to Section 2.1(c).

2.3 Company Stock Options.

(a) The Company shall take such action as shall be required:

(i) to cause the vesting of any unvested options to purchase

Company Common Stock ("Company Stock Options") granted under any stock option

plans or other equity-related plans of the Company (the "Company Stock Plans")

to be accelerated in full effective immediately prior to the Effective Time;

(ii) to effectuate the cancellation, as of the Effective Time,

of all Company Stock Options outstanding immediately prior to the Effective Time

(without regard to the exercise price of such Company Stock Options); and

(iii) to cause each outstanding Company Stock Option to

represent on the first Business Day following the Effective Time solely the

right to receive, in accordance with this Section 2.3, a lump sum cash payment

in the amount of the Option Consideration (as defined below), if any, with

respect to such Company Stock Option to no longer represent the right to

purchase Company Common Stock or any other equity security of the Company, the

Buyer, the Surviving Corporation or any other person or any other consideration.

(b) Each holder of a Company Stock Option shall receive from the

Buyer, in respect and in consideration of each Company Stock Option so

cancelled, on the first Business Day following the Effective Time, an amount

(net of applicable taxes) equal to the product of (i) the excess, if any, of (A)

the Merger Consideration per share of Company Common Stock over (B) the exercise

price per share of Company Common Stock subject to such Company Stock Option,

multiplied by (ii) the total number of shares of Company Common Stock subject to

such Company Stock Option (whether or not then vested or exercisable), without

any interest thereon (the "Option Consideration"). In the event that the

exercise price of any Company Stock Option is equal to or greater than the

Merger Consideration, such Company Stock Option shall be cancelled and have no

further force or effect.

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Agreement, the Company shall mail to each person who is a holder of Company

Stock Options a letter describing the treatment of and payment for such Company

Stock Options pursuant to this Section 2.3 and providing instructions for use in

obtaining payment for such Company Stock Options.

2.4 Dissenting Shares.

(a) Notwithstanding anything to the contrary contained in this

Agreement, shares of Company Common Stock held by a holder who is entitled to

demand and has made a demand for appraisal of such shares of Company Common

Stock in accordance with the DGCL and has not voted in favor of the adoption of

the Merger Agreement (any such shares being referred to as "Dissenting Shares"

until such time as such holder fails to perfect or otherwise loses such holder's

appraisal rights under the DGCL with respect to such shares) shall not be

converted into or represent the right to receive Merger Consideration in

accordance with Section 2.1, but shall be entitled only to such rights as are

granted by the DGCL to a holder of Dissenting Shares.

(b) If any Dissenting Shares shall lose their status as such

(through failure to perfect or otherwise), then, as of the later of the

Effective Time or the date of loss of such status, such shares shall

automatically be converted into and shall represent only the right to receive

Merger Consideration in accordance with Section 2.1, without interest thereon,

upon surrender of the Certificates representing such shares.

written demand for appraisal received by the Company prior to the Effective Time

pursuant to the DGCL, any withdrawal of any such demand and any other demand,

notice or instrument delivered to the Company prior to the Effective Time

pursuant to the DGCL that relate to such demand; and (ii) the opportunity to

participate in and direct all negotiations and proceedings with respect to any

such demand, notice or instrument. The Company shall not make any payment or

settlement offer prior to the Effective Time with respect to any such demand,

notice or instrument unless the Buyer shall have given its written consent to

such payment or settlement offer.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Buyer and the Transitory

Subsidiary that the statements contained in this Article III are true and

correct, except as set forth in the disclosure schedule delivered by the Company

to the Buyer and the Transitory Subsidiary and dated as of the date of this

Agreement (the "Company Disclosure Schedule"). The Company Disclosure Schedule

shall be arranged in sections and paragraphs corresponding to the numbered and

lettered sections and paragraphs contained in this Article III, and the

disclosure in any Section or paragraph shall qualify (a) the corresponding

Section or paragraph in this Article III and (b) the

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other sections and paragraphs in this Article III to the extent that it is

readily apparent from a reading of such disclosure that it also qualifies or

applies to such other sections and paragraphs.

3.1 Organization, Standing and Power.

(a) The Company (i) is a corporation duly organized, validly

existing and in good standing under the laws of the jurisdiction of its

incorporation, (ii) has all requisite corporate power and authority to own,

lease and operate its properties and assets and to carry on its business as now

being conducted and (iii) is duly qualified to do business and, where applicable

as a legal concept, is in good standing as a foreign corporation in each

jurisdiction in which the character of the properties it owns, operates or

leases or the nature of its activities makes such qualification necessary,

except (with respect to clause (iii) only) for such failures to be so qualified

or in good standing, individually or in the aggregate, that are not reasonably

likely to result in a Company Material Adverse Effect. For purposes of this

Agreement, the term "Company Material Adverse Effect" means any material adverse

change, event, circumstance or development with respect to, or material adverse

effect on, the business, condition (financial or otherwise) or results of

operations of the Company and its Subsidiaries, taken as a whole, or any event

that would reasonably be expected to prevent the consummation of the

transactions consummated hereby; provided, however, that none of the following,

to the extent occurring after the date hereof, shall constitute, or shall be

considered in determining whether there has occurred, a Company Material Adverse

Effect:

(i) changes that are the result of economic factors affecting

the national or world economy or acts of war or terrorism, except to the extent

that such changes have a materially disproportionate effect on the Company and

its Subsidiaries relative to other similarly situated participants in the

industries or markets in which they operate;

(ii) changes that are the result of factors generally

affecting the industries or markets in which the Company operates, except to the

extent that such changes have a materially disproportionate effect on the

Company and its Subsidiaries relative to other similarly situated participants

in the industries or markets in which they operate;

(iii) changes in law, rule or regulations or generally

accepted accounting principles or the interpretation thereof;

(iv) any action taken pursuant to or in accordance with this

Agreement (including, without limitation, Section 6.6) or at the request of the

Buyer;

(v) any fees or expenses reasonably incurred in connection

with the transactions contemplated by this Agreement;

(vi) any failure by the Company to meet any published

estimates of revenues or earnings for any period ending on or after the date of

this Agreement and prior to the Closing (it being understood that the facts and

circumstances giving rise to such failure may be deemed to constitute and shall

be taken into account in determining whether there has been a Company Material

Adverse Effect); and

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(vii) a decline in the price of the Company Common Stock on

The NASDAQ National Market (it being understood that the facts and circumstances

giving rise to such decline may be deemed to constitute and shall be taken into

account in determining whether there has been a Company Material Adverse

Effect).

(b) The Company has delivered or made available to the Buyer: (i) a

true and correct copy of the Certificate of Incorporation and Bylaws of the

Company, each as amended to date (together, the "Company Charter Documents"),

and each such instrument is in full force and effect and no other organizational

documents are applicable to or binding upon the Company. The Company is not in

violation in any material respect of any of the provisions of the Company

Charter Documents.

3.2 Capitalization.

(a) The authorized capital stock of the Company as of the date of

this Agreement consists of 400,000,000 shares of Company Common Stock and

5,000,000 shares of preferred stock, $0.001 par value per share ("Company

Preferred Stock"). As of April 22, 2005, (i) 126,115,021 shares of Company

Common Stock were issued and outstanding, (ii) 14,864,755 shares of Company

Common Stock were held in the treasury of the Company, (iii) no shares of

Company Preferred Stock were issued or outstanding and (iv) 16,662,979 shares of

Company Common Stock were reserved for issuance under the Company Stock Plans.

From April 22, 2005 until the date of this Agreement, no shares of Company

Common Stock or Company Preferred Stock have been issued, except for shares of

Company Common Stock pursuant to the exercise of Company Stock Options.

(b) Section 3.2(b) of the Company Disclosure Schedule sets forth a

complete and accurate list, as of the date hereof, of: (i) all Company Stock

Plans, indicating for each Company Stock Plan, as of such date, the number of

shares of Company Common Stock issued under such Plan, the number of shares of

Company Common Stock subject to outstanding options under such Plan and the

number of shares of Company Common Stock reserved for future issuance under such

Plan; (ii) all outstanding Company Stock Options, indicating with respect to

each such Company Stock Option the name of the holder thereof, the Company Stock

Plan under which it was granted, the number of shares of Company Common Stock

subject to such Company Stock Option, the exercise price, the date of grant, and

the vesting schedule thereof; and (iii) all outstanding warrants exercisable for

Company Common Stock ("Company Warrants"), indicating with respect to each

Company Warrant, the name of the holder thereof, the number of shares of Company

Common Stock subject to such outstanding warrant, the exercise price, the date

of the grant and the vesting schedule thereof.

Subordinated Notes due 2023 (the "Zero Coupon Notes"), (ii) the Company Warrants

and the Company Stock Options as set forth on Section 3.2(b) of the Company

Disclosure Schedule and (iii) as reserved for future grants under Company Stock

Plans, as of the date of this Agreement, (A) there are no equity securities of

any class of the Company, or any security exchangeable into or exercisable for

such equity securities, issued, reserved for issuance or outstanding and (B)

there are no options, warrants, equity securities, calls, rights, commitments or

Contracts obligating the

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Company or any of its Subsidiaries to issue, exchange, transfer, deliver or

sell, or cause to be issued, exchanged, transferred, delivered or sold,

additional shares of capital stock or other equity interests of the Company or

any security or rights convertible into or exchangeable or exercisable for any

such shares or other equity interests, or obligating the Company or any of its

Subsidiaries to grant, extend, accelerate the vesting of, otherwise modify or

amend or enter into any such option, warrant, equity security, call, right,

commitment or agreement. The Company does not have any outstanding stock

appreciation rights, phantom stock, performance based rights or similar rights

or obligations. Neither the Company nor any of its Affiliates is a party to or

is bound by any agreements or understandings with respect to the voting

(including voting trusts and proxies) or sale or transfer (including agreements

imposing transfer restrictions) of any shares of capital stock or other equity

interests of the Company. For purposes of this Agreement, the term "Affiliate"

when used with respect to any party shall mean any person who is an "affiliate"

of that party within the meaning of Rule 405 promulgated under the Securities

Act of 1933, as amended (the "Securities Act"). Except as contemplated by this

Agreement, there are no registration rights, and there is no rights agreement,

"poison pill," anti-takeover plan or other similar Contract with respect to any

equity security of any class of the Company.

(d) All outstanding shares of Company Common Stock are, and all

shares of Company Common Stock subject to issuance as specified in Section

3.2(b) above, upon issuance on the terms and conditions specified in the

instruments pursuant to which they are issuable, will be, duly authorized,

validly issued, fully paid and nonassessable and not subject to or issued in

violation of any purchase option, call option, right of first refusal,

preemptive right, subscription right or any similar right under any provision of

the DGCL, the Company Charter Documents or any agreement to which the Company is

a party or is otherwise bound.

(e) There are no obligations, commitments or arrangements,

contingent or otherwise, of the Company, any of its Subsidiaries or any of its

Affiliates to repurchase, redeem or otherwise acquire any shares of Company

Common Stock or the capital stock of the Company, any of its Subsidiaries or any

of its Affiliates.

(f) Section 3.2(f) of the Company Disclosure Schedule sets forth a

complete and correct list, as of the date of this Agreement, of each Contract

pursuant to which any Indebtedness (as defined below) of the Company or its

Subsidiaries is outstanding or may be incurred or guaranteed in an amount in

excess of $250,000, together with the amount outstanding thereunder as of the

date of this Agreement. "Indebtedness" means (i) indebtedness for borrowed

money, whether secured or unsecured, (ii) obligations under conditional or

installment sale or other title retention agreement or arrangement relating to

purchased property, (iii) capitalized lease obligations and (iv) guarantees of

any of the foregoing of another person. No event has occurred which either

entitles, or could entitle (with or without notice or lapse of time or both) the

holder of any Indebtedness described in Section 3.2(f) of the Company Disclosure

Schedule to accelerate, or which does accelerate, the maturity of any such

Indebtedness.

3.3 Subsidiaries.

(a) Section 3.3(a) of the Company Disclosure Schedule sets forth, as

of the date of this Agreement, for each Material Subsidiary of the Company: (i)

its name; (ii) the

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jurisdiction of organization; and (iii) the number of its outstanding shares of

capital stock and the record and beneficial owner thereof (or a statement that

the Company or a Material Subsidiary owns all of the outstanding shares of

capital stock of such Material Subsidiary). For purposes of this Agreement, (i)

the term "Subsidiary" means, with respect to any party, any corporation,

partnership, trust, limited liability company or other non-corporate business

enterprise in which such party (or another Subsidiary of such party) holds stock

or other ownership interests representing (A) more that 50% of the voting power

of all outstanding stock or ownership interests of such entity, (B) the right to

receive more than 50% of the net assets of such entity available for

distribution to the holders of outstanding stock or ownership interests upon a

liquidation or dissolution of such entity or (C) a general or managing

partnership interest in such entity, and (ii) the term "Material Subsidiary"

means, with respect to the Company, any subsidiary listed on Exhibit 21.1 to the

Annual Report on Form 10-K filed by the Company with the Securities and Exchange

Commission (the "SEC") on March 16, 2005 pursuant to the Securities Exchange Act

of 1934, as amended (the "Exchange Act").

(b) Each Material Subsidiary of the Company is a corporation,

partnership or other entity duly organized, validly existing and in good

standing (to the extent such concepts are applicable) under the laws of the

jurisdiction of its incorporation or organization, has all requisite corporate

or other power and authority to own, lease and operate its properties and assets

and to carry on its business as now being conducted and as proposed to be

conducted, and is duly qualified to do business and is in good standing as a

foreign corporation or entity (to the extent such concepts are applicable) in

each jurisdiction where the character of its properties owned, operated or

leased or the nature of its activities makes such qualification necessary,

except for such failures to be so organized, validly existing or in good

standing, to have such power and authority or to be so qualified or in good

standing that, individually or in the aggregate, are not reasonably likely to

result in a Company Material Adverse Effect. All of the outstanding shares of

capital stock and other equity securities or interests of each Material

Subsidiary of the Company are duly authorized, validly issued, fully paid,

nonassessable and free of preemptive rights and all such shares (other than

directors' qualifying shares in the case of non-U.S. Subsidiaries, all of which

the Company has the power to cause to be transferred for no or nominal

consideration to the Company or the Company's designee) are owned, of record and

beneficially, by the Company or another of its Subsidiaries free and clear of

all security interests, liens, claims, pledges, agreements, limitations in the

Company's voting rights, charges or other encumbrances. There are no outstanding

or authorized options, warrants, rights, agreements or commitments to which the

Company or any of its Subsidiaries is a party or which are binding on any of

them providing for the issuance, disposition or acquisition of any capital stock

of any Material Subsidiary of the Company. There are no outstanding stock

appreciation, phantom stock or similar rights with respect to any Material

Subsidiary of the Company. There are no voting trusts, proxies or other

agreements or understandings with respect to the voting of any capital stock of

any Material Subsidiary of the Company.

accurate copies of the charter, by-laws or other organizational documents of

each Material Subsidiary of the Company (the "Subsidiary Charter Documents"),

and each such instrument is in full force and effect and no other organizational

documents are applicable to or binding upon such

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<PAGE>

Subsidiaries. None of the Subsidiaries is in violation in any material respect

of any of the provisions of its Subsidiary Charter Documents.

(d) The Company does not control directly or indirectly or have any

direct or indirect equity participation or similar interest in any corporation,

partnership, limited liability company, joint venture, trust or other business

association or entity which is not a Subsidiary of the Company, other than

securities in a publicly traded company held for investment by the Company or

any of its Subsidiaries and consisting of less than 5% of the outstanding

capital stock of such company.

3.4 Authority; No Conflict; Required Filings and Consents.

(a) The Company has all requisite corporate power and authority to

enter into this Agreement and, subject to the adoption of this Agreement (the

"Company Voting Proposal") by the Company's stockholders under the DGCL (the

"Company Stockholder Approval"), to perform its obligations and consummate the

transactions contemplated by this Agreement. Without limiting the generality of

the foregoing, the Board of Directors of the Company (the "Company Board"), at a

meeting duly called and held, with all directors present voting in favor, (i)

determined that the Merger is fair and in the best interests of the Company and

its stockholders, (ii) approved and adopted this Agreement and declared its

advisability in accordance with the provisions of the DGCL, and (iii) directed

that this Agreement be submitted to the stockholders of the Company for their

adoption and resolved to recommend that the stockholders of the Company vote in

favor of the adoption of this Agreement. The execution, delivery and performance

of this Agreement and the consummation of the transactions contemplated by this

Agreement by the Company have been duly authorized by all necessary corporate

action on the part of the Company, subject only to the required receipt of the

Company Stockholder Approval. This Agreement has been duly executed and

delivered by the Company and constitutes the valid and binding obligation of the

Company, enforceable against the Company in accordance with its terms, subject

to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and

similar laws of general applicability relating to or affecting creditors' rights

and to general equity principles (the "Bankruptcy and Equity Exception").

(b) The execution and delivery of this Agreement by the Company do

not, and the consummation by the Company of the transactions contemplated by

this Agreement shall not, (i) conflict with, or result in any violation or

breach of, any provision of the Company Charter Documents or the Subsidiary

Charter Documents, (ii) conflict with, or result in any violation or breach of,

or constitute (with or without notice or lapse of time, or both) a default (or

give rise to a right of termination, cancellation, modification or acceleration

of any obligation or loss of any material benefit) under, require a consent or

waiver under, constitute a change in control under, require the payment of a

penalty or increased fees under or result in the imposition of any mortgage,

right of first refusal, claim, license, limitation in voting rights, security

interest, pledge, lien, charge or encumbrance ("Liens") on the Company's or any

of its Subsidiaries' assets under, any of the terms, conditions or provisions of

any lease, license, contract, subcontract, indenture, note, option or other

agreement, instrument or obligation, written or oral, to which the Company or

any of its Subsidiaries is a party or by which any of them or any of their

properties or assets may be bound (each, a "Contract"), or (iii) subject to

obtaining the

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<PAGE>

Company Stockholder Approval and compliance with the requirements specified in

clauses (i) through (vi) of Section 3.4(c), conflict with or violate any permit,

concession, franchise, license, judgment, injunction, order, writ, decree,

statute, law, ordinance, rule, or regulation applicable to the Company or any of

its Subsidiaries or any of its or their respective properties or assets, except

in the case of clauses (ii) and (iii) of this Section 3.4(b) for any such

conflicts, violations, breaches, defaults, terminations, cancellations,

modifications, accelerations, losses, penalties, increased fees or Liens, and

for any consents or waivers not obtained, that, individually or in the

aggregate, are not reasonably likely to result in a Company Material Adverse

Effect.

certification, concession, franchise or authorization of, or registration,

declaration, notice or filing with, any federal, state or local, U.S. or foreign

court, arbitrational tribunal, administrative agency or commission or other

governmental or regulatory authority, agency or instrumentality (a "Governmental

Entity") or any stock market or stock exchange on which shares of Company Common

Stock are listed for trading is required by or with respect to the Company or

any of its Subsidiaries in connection with the execution, delivery and

performance of this Agreement by the Company or the consummation by the Company

of the transactions contemplated by this Agreement, except for (i) the

pre-merger notification requirements under the Hart-Scott-Rodino Antitrust

Improvements Act of 1976, as amended (the "HSR Act") and applicable foreign

antitrust or merger control laws, (ii) the filing of the Certificate of Merger

with the Delaware Secretary of State and appropriate corresponding documents

with the appropriate authorities of other states in which the Company is

qualified as a foreign corporation to transact business in order to continue

such qualification, (iii) the filing of the Proxy Statement with the SEC in

accordance with the Exchange Act, (iv) the filing of such reports, schedules or

materials under Section 13 of or Rule 14a-12 under the Exchange Act as may be

required in connection with this Agreement and the transactions contemplated

hereby, and (v) such consents, approvals, orders, authorizations, registrations,

declarations and filings as may be required under applicable state securities

laws, and (vi) such other consents, approvals, licenses, permits, orders,

authorizations, registrations, declarations, notices and filings which, if not

obtained or made, would not be, individually or in the aggregate, reasonably

likely to result in a Company Material Adverse Effect.

(d) The affirmative vote for approval and adoption of the Company

Voting Proposal by the holders of a majority in voting power of the outstanding

shares of Company Common Stock on the record date for the meeting of the

Company's stockholders (the "Company Meeting") to consider the Company Voting

Proposal (the "Required Company Stockholder Vote") is the only vote of the

holders of any class or series of the Company's capital stock or other

securities necessary for the approval and adoption of this Agreement and for the

consummation by the Company of the other transactions contemplated by this

Agreement. There are no bonds, Contracts, debentures, warrants, options, series

of capital stock, notes or other Indebtedness of the Company or its Subsidiaries

having the right to vote (or, except for the Company's Zero Coupon Notes and the

Company Warrants, convertible into, or exercisable or exchangeable for,

securities having the right to vote) on any matters on which stockholders of the

Company or its Subsidiaries may vote.

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<PAGE>

3.5 SEC Filings; Financial Statements; Information Provided.

(a) The Company has filed all registration statements, forms,

reports and other documents required to be filed by the Company with the SEC

since January 1, 2002. All such registration statements, forms, reports and

other documents (including those that the Company may file after the date hereof

until the Closing) are referred to herein as the "Company SEC Reports." The

Company SEC Reports (i) were or will be filed on a timely basis, (ii) at the

time filed, complied, or will comply when filed, as to form in all material

respects with the applicable requirements of the Securities Act and the Exchange

Act, as the case may be, and the rules and regulations of the SEC thereunder

applicable to such Company SEC Reports, and (iii) did not or will not at the

time they were or are filed contain any untrue statement of a material fact or

omit to state a material fact required to be stated in such Company SEC Reports

or necessary in order to make the statements in such Company SEC Reports, in the

light of the circumstances under which they were made, not misleading. No

Subsidiary of the Company is subject to the reporting requirements of Section

13(a) or Section 15(d) of the Exchange Act.

(b) Each of the consolidated financial statements (including, in

each case, any related notes and schedules) contained or to be contained in the

Company SEC Reports at the time filed (i) complied or will comply as to form in

all material respects with applicable accounting requirements and the published

rules and regulations of the SEC with respect thereto, (ii) were or will be

prepared in accordance with United States generally accepted accounting

principles ("GAAP") applied on a consistent basis throughout the periods

involved (except as may be indicated in the notes to such financial statements

or, in the case of unaudited interim financial statements, as permitted by the

SEC on Form 10-Q under the Exchange Act), and (iii) fairly presented or will

fairly present in all material respects the consolidated financial position of

the Company and its Subsidiaries as of the dates indicated and the consolidated

results of its operations and cash flows for the periods indicated, except that

the unaudited interim financial statements were or are subject to normal and

recurring year-end adjustments. All of the Subsidiaries of the Company are

consolidated for accounting purposes. The consolidated, audited balance sheet of

the Company as of December 31, 2004 is referred to herein as the "Company

Balance Sheet."

behalf of the Buyer for inclusion in the proxy statement to be sent to the

stockholders of the Company in connection with the Company Meeting (the "Proxy

Statement"), the Proxy Statement and any other soliciting materials of the

Company shall not, on the date the Proxy Statement or such materials are first

mailed to stockholders of the Company, at the time of the Company Meeting or at

the Effective Time, contain any statement which, at such time and in light of

the circumstances under which it shall be made, is false or misleading with

respect to any material fact, or omits to state any material fact necessary in

order to make the statements therein not false or misleading; or omit to state

any material fact necessary to correct any statement in any earlier

communication with respect to the solicitation of proxies for the Company

Meeting which has become false or misleading. If at any time prior to the

Company Meeting any fact or event relating to the Company or any of its

Affiliates which should be set forth in a supplement to the

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Proxy Statement should be discovered by the Company or should occur, the Company

shall, promptly after becoming aware thereof, inform the Buyer of such fact or

event.

(d) The Company maintains disclosure controls and procedures

required by Rule 13a-15 or 15d-15 under the Exchange Act. Such disclosure

controls and procedures are designed to ensure that all material information

concerning the Company is made known on a timely basis to the individuals

responsible for the preparation of the Company's filings with the SEC and other

public disclosure documents. The Company has disclosed, based on its most recent

evaluations, to the Company's outside auditors and the audit committee of the

Board of Directors of the Company (A) all significant deficiencies and material

weaknesses in the design or operation of internal control over financial

reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are known to

the Company and reasonably likely to adversely affect the Company's ability to

record, process, summarize and report financial data and (B) any fraud, whether

or not material, known to the Company that involves management or other

employees who have a significant role in the Company's internal control over

financial reporting. The Company is in compliance with the applicable listing

and other rules and regulations of The NASDAQ National Market.

(e) The Company has made available to the Buyer a complete and

correct copy of any exhibits, annexes, attachments, supplements, amendments or

modifications that have not been filed with the SEC to all exhibits to the

Annual Report on Form 10-K filed by the Company with the SEC on March 16, 2005

that have requested by the Buyer.

3.6 No Undisclosed Liabilities. Except as disclosed in the Company SEC

Reports filed prior to the date of this Agreement or in the Company Balance

Sheet, the Company and its Subsidiaries do not have any liabilities (whether

accrued, absolute, contingent or otherwise), except for liabilities (i) incurred

in connection with the transactions contemplated hereby, (ii) incurred in the

ordinary course of business consistent with past practice or (iii) that,

individually or in the aggregate, are not reasonably likely to result in a

Company Material Adverse Effect.

3.7 Absence of Certain Changes or Events. Between the date of the Company

Balance Sheet and the date of this Agreement, except as disclosed in the Company

SEC Reports, (i) the Company and its Subsidiaries have conducted their

respective businesses only in the ordinary course of business consistent with

past practice and (ii) neither the Company nor any of its Subsidiaries has taken

any action which, if taken after the date hereof, would require the consent of

the Buyer under Section 5.1 of this Agreement. Since the date of the Company

Balance Sheet, there has not been any change, event, circumstance or development

that, individually or in the aggregate, has had or is reasonably likely to

result in a Company Material Adverse Effect.

3.8 Taxes.

(a) The Company and each of its Subsidiaries have timely filed all

Tax Returns that they were required to file, and all such Tax Returns were

correct and complete, except for any failure to file or errors or omissions

that, individually or in the aggregate, are not reasonably likely to result in a

Company Material Adverse Effect. The Company and each of its

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Subsidiaries have paid on a timely basis all Taxes due and payable (whether or

not shown on any such Tax Returns). The unpaid Taxes of the Company and its

Subsidiaries for Tax periods through the date of the Company Balance Sheet do

not exceed the accruals and reserves for Taxes set forth on the Company Balance

Sheet exclusive of any accruals and reserves for "deferred taxes" or similar

items that reflect timing differences between Tax and financial accounting

principles. All liabilities for Taxes that arose since the date of the Company

Balance Sheet arose in the ordinary course of business. All Taxes that the

Company or any of its Subsidiaries is or was required by law to withhold or

collect have been duly withheld or collected and, to the extent required, have

been paid to the proper Governmental Entity, except for any such Taxes with

respect to which the failure to withhold, collect or pay is not, individually or

in the aggregate, reasonably likely to result in a Company Material Adverse

Effect. There are no liens or encumbrances with respect to Taxes upon any of the

assets or property of the Company or its Subsidiaries, other than liens for

Taxes not yet due and payable. For purposes of this Agreement, (i) "Taxes" means

all taxes, charges, fees, levies or other similar assessments or liabilities,

including income, gross receipts, ad valorem, premium, value-added, excise, real

property, personal property, sales, use, services, license alternative or add-on

minimum, transfer, withholding, employment, payroll and franchise taxes imposed

by the United States of America or any state, local or foreign government, or

any agency thereof, or other political subdivision of the United States or any

such government, and any interest, fines, penalties, assessments or additions to

tax resulting from, attributable to or incurred in connection with any tax or

any contest or dispute thereof and (ii) "Tax Returns" means all reports,

returns, declarations, statements or other information required to be supplied

to a taxing authority in connection with Taxes, including, without limitation,

any information return, claim for refund, amended return or declaration of

estimated Tax.

(b) There are no deficiencies for any amount of Taxes claimed,

proposed or assessed by any taxing or other Governmental Entity in writing that

have not been fully paid, settled or accrued for. The Company has made available

to the Buyer correct and complete copies of all federal income Tax Returns,

examination reports and statements of deficiencies assessed against or agreed to

by the Company since January 1, 2002. The federal income Tax Returns of the

Company and each of its Subsidiaries have been audited by the Internal Revenue

Service (the "IRS") or are closed by the applicable statute of limitations for

all taxable years through the taxable year specified in Section 3.8(b) of the

Company Disclosure Schedule. The Company has made available to the Buyer correct

and complete copies of all other Tax Returns of the Company and its Subsidiaries

together with all related examination reports and statements of deficiency for

all periods from and after January 1, 2002. No examination or audit of any Tax

Return of the Company or any of its Subsidiaries by any Governmental Entity is

currently in progress or, to the knowledge of the Company, threatened or

contemplated. Neither the Company nor any of its Subsidiaries has been informed

by any Governmental Entity that the Governmental Entity believes that the

Company or any of its Subsidiaries was required to file any Tax Return that was

not filed. Neither the Company nor any of its Subsidiaries has waived any

statute of limitations with respect to Taxes or agreed to an extension of time

with respect to a Tax assessment or deficiency.

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any payments, is obligated to make any payments, or is a party to any agreement

that could obligate it to make any payments that will be treated as an "excess

parachute payment" under Section 280G of the Code; or (ii) has any actual or

potential liability for any Taxes of any person (other than the Company and its

Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar

provision of law in any jurisdiction), or as a transferee or successor, by

contract or otherwise.

(d) Neither the Company nor any of its Subsidiaries (i) is or has

ever been a member of a group of corporations with which it has filed (or been

required to file) consolidated, combined or unitary Tax Returns, other than a

group of which only the Company and its Subsidiaries are or were members or (ii)

is a party to or bound by any Tax indemnity, Tax sharing or Tax allocation

agreement.

(e) Neither the Company nor any of its Subsidiaries (i) is required

to make any payments in connection with transactions or events contemplated by

this Agreement or (ii) is a party to an agreement that would require it to make

any payments, in each case that would not be fully deductible by reason of

Section 162(m) of the Code.

(f) Neither the Company nor any of its Subsidiaries has been either

a "distributing corporation" or a "controlled corporation" in a distribution

occurring during the last five years in which the parties to such distribution

treated the distribution as one to which Section 355 of the Code is applicable.

(g) Neither the Company nor any of its Subsidiaries has agreed or is

required to make any adjustments for any taxable period, or portion thereof,

ending after the Closing Date pursuant to Section 481(a) of the Code or any

similar provision of state, local or foreign law by reason of a change in

accounting method initiated by it or any other relevant party and neither the

Company nor any of its Subsidiaries has any knowledge that the IRS has proposed

any such adjustment or change in accounting method, nor has any application

pending with any Governmental Entity requesting permission for any changes in

accounting methods that relate to the business or assets of the Company or any

of its Subsidiaries.

(h) The Company will not be required to include any item of income

in, or exclude any item of deduction from, taxable income for any taxable

period, or portion thereof, ending after the Closing Date as a result of any (i)

"closing agreement" as described in Section 7121 of the Code (or any

corresponding or similar provision of state, local or foreign income Tax law)

executed on or prior to the Closing Date, (ii) intercompany transaction or

excess loss account described in the Treasury Regulations under Section 1502 of

the Code (or any corresponding or similar provision of state, local or foreign

income Tax law), (iii) installment sale or open transaction disposition made on

or prior to the Closing Date, (iv) prepaid amount received on or prior to the

Closing Date or (v) other action taken prior to the Closing Date.

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3.9 Owned and Leased Real Properties.

(a) Section 3.9(a) of the Company Disclosure Schedule sets forth a

complete and accurate list as of the date of this Agreement of (i) the addresses

of all real property owned by the Company or any Subsidiary (the "Owned Real

Property"), (ii) the record owner of such Owned Real Property, and (iii) all

loans secured by mortgages encumbering the Owned Real Property. Legal

descriptions of such Owned Real Property and the most recent title reports or

policies (if any) with respect to each of the Owned Real Properties have

previously been made available to Buyer. The Company or its Subsidiaries are the

sole owners of good, valid, fee simple and marketable title to the Owned Real

Properties, including without limitation, all buildings, structures, fixtures

and improvements located thereon in each case free and clear of any Liens other

than those that are not, individually or in the aggregate, reasonably likely to

result in a Company Material Adverse Effect.

(b) Section 3.9(b) of the Company Disclosure Schedule sets forth a

complete and accurate list as of the date of this Agreement of all real property

leased, subleased or licensed by the Company or any of its Subsidiaries

(collectively, the "Leases") other than (i) property subject to a Lease that is

terminable by the Company or any of its Subsidiaries on no more than thirty (30)

days notice without liability or financial obligation to the Company or (ii)

property subject to a Lease for which the payment by the Company is less than

$10,000 per month (collectively "Company Leases") and the location of the

premises. Neither the Company nor any of its Subsidiaries nor, to the Company's

knowledge, any other party to any Company Lease is in default under any of the

Company Leases, except where the existence of such defaults, individually or in

the aggregate, is not reasonably likely to result in a Company Material Adverse

Effect, and each Company Lease is valid and binding and is enforceable by the

Company and its Subsidiaries in accordance with its respective terms, except for

such failures to be valid, binding or enforceable, individually or in the

aggregate, is not reasonably likely to result in a Company Material Adverse

Effect. Neither the Company nor any of its Subsidiaries leases, subleases or

licenses any real property to any person other than the Company and its

Subsidiaries. The Company has made available to the Buyer complete and accurate

copies of all Company Leases.

3.10 Title to Tangible Personal Property. The Company and its Material

Subsidiaries have legal and valid title to, or a valid and enforceable right to

use, all of the tangible personal properties and assets used or held for use by

the Company and its Subsidiaries in connection with the conduct of the business

of the Company and its Subsidiaries, except for such defects or failures that,

individually or in the aggregate, are not reasonably likely to result in a

Company Material Adverse Effect. All such tangible personal properties and

assets, other than properties and assets in which the Company or any of its

Subsidiaries has a leasehold interest, are free and clear of all Liens, except

for such Liens that, individually or in the aggregate, are not reasonably likely

to result in a Company Material Adverse Effect.

3.11 Intellectual Property.

(a) To the knowledge of the Company, the Company and its Material

Subsidiaries own, license, sublicense or otherwise possess legally enforceable

rights to use all Intellectual Property necessary to conduct the business of the

Company and its Subsidiaries as

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currently conducted (in each case excluding generally commercially available,

off-the-shelf software programs), the absence of which, individually or in the

aggregate, is not reasonably likely to result in a Company Material Adverse

Effect. For purposes of this Agreement, the term "Intellectual Property" means

all intellectual property, including without limitation, all (i) patents,

inventions, trademarks, service marks, trade names, domain names, copyrights,

designs and trade secrets, (ii) applications for and registrations of such

patents, trademarks, service marks, trade names, domain names, copyrights and

designs, (iii) lists (including customer lists), databases, processes, formulae,

methods, schematics, technology, know-how, computer software programs and

related documentation, and (iv) other tangible or intangible proprietary or

confidential information and materials.

(b) The execution and delivery of this Agreement by the Company and

the consummation by the Company of the Merger will not result in the breach of,

or create on behalf of any third party the right to terminate or modify, or

result in the payment of any additional fees under, (i) any license, sublicense,

consent or other agreement relating to any Intellectual Property owned by the

Company that is material to the business of the Company and its Subsidiaries

taken as a whole, or (ii) any Intellectual Property Licenses (as defined below).

Section 3.11(b)(i) of the Company Disclosure Schedule sets forth a complete and

accurate list of all registrations and applications for registration of

Intellectual Property owned by the Company or its Subsidiaries, and Section

3.11(b)(ii) of the Company Disclosure Schedule sets forth a complete and

accurate list of all licenses, sublicenses and other agreements as to which the

Company or any of its Subsidiaries is a party and pursuant to which the Company

or any of its Subsidiaries is authorized to use any third party Intellectual

Property that is material to the business of the Company and its Subsidiaries,

taken as a whole, excluding non-exclusive, generally commercially available,

off-the-shelf software programs (collectively, "Intellectual Property

Licenses").

for trademarks, service marks and copyrights which are held by the Company or

any of its Subsidiaries and which are material to the business of the Company

and its Subsidiaries, taken as a whole, are subsisting and have not expired or

been cancelled or abandoned. To the knowledge of the Company, no third party is

infringing, violating or misappropriating any of the Company Intellectual

Property, except for infringements, violations or misappropriations that,

individually or in the aggregate, are not reasonably likely to result in a

Company Material Adverse Effect.

(d) To the knowledge of the Company, the conduct of the business of

the Company and its Subsidiaries as currently conducted does not infringe,

violate or constitute a misappropriation of any Intellectual Property of any

third party, except for such infringements, violations and misappropriations

that, individually or in the aggregate, are not reasonably likely to result in a

Company Material Adverse Effect.

(e) The Company takes commercially reasonable steps to protect and

preserve its rights in any proprietary Intellectual Property (including

executing confidentiality, and intellectual property assignment agreements with

current executive officers and current employees and contractors that have a

material role in the development of the Company's products and Intellectual

Property).

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3.12 Contracts.

(a) For purposes of this Agreement, "Company Material Contract"

shall mean:

(i) any "material contract" (as such term is defined in Item

601(b)(10) of Regulation S-K of the SEC) with respect to the Company and its

Subsidiaries;

(ii) any employment, consulting or other Contract with (x) any

member of the Company's Board of Directors, (y) any executive officer of the

Company or (z) any other employee of the Company earning an annual salary equal

to or in excess of $200,000, other than those that are terminable by the Company

or any of its Subsidiaries on no more than thirty (30) days notice without

liability or financial obligation to the Company;

(iii) any Contract containing any covenant (A) limiting in any

respect the right of the Company or any of its Subsidiaries to engage in any

line of business or compete with any person in any line of business or to

compete with any party, (B) granting any exclusive rights to make, sell or

distribute the Company's products, or (C) otherwise prohibiting or limiting the

right of the Company and its Subsidiaries to sell or distribute any products or

services;

(iv) any Contract (i) relating to the disposition or

acquisition by the Company or any of its Subsidiaries with obligations remaining

to be performed or liabilities continuing after the date of this Agreement of

any business or any material amount of assets not in the ordinary course of

business or (ii) pursuant to which the Company or any of its Subsidiaries has

any material ownership interest in any other person or other business enterprise

other than the Material Subsidiaries;

(v) any Contract to provide source code into any escrow or to

any third party (under any circumstances) for any product or technology that is

material to the Company and its Subsidiaries taken as a whole;

(vi) any Contract to license any third party to reproduce any

of the Company's Intellectual Property products, services or technology or any

Contract to sell or distribute any of the Company's Intellectual Property

products, services or technology, except (A) agreements with sales

representatives or other resellers in the ordinary course of business, or (B)

agreements allowing internal backup copies made or to be made by end-user

customers in the ordinary course of business;

(vii) any mortgages, indentures, guarantees, loans or credit

agreements, security agreements, promissory notes or other Contracts relating to

the borrowing of money, extension of credit or other Indebtedness, other than

accounts receivables and payables in the ordinary course of business;

(viii) any settlement agreement entered into within three (3)

years prior to the date of this Agreement, other than (I) releases immaterial in

nature or amount entered into with former employees or independent contractors

of the Company in the ordinary course of

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business in connection with the routine cessation of such employee's or

independent contractor's employment with the Company or (II) settlement

agreements for cash only (which has been paid) and does not exceed $250,000 as

to such settlement;

(ix) any Contract under which the Company or any Subsidiaries

has licensed its Intellect

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