AGREEMENT AND PLAN OF MERGER

EXHIBIT 2.1

Execution Version

AGREEMENT AND PLAN OF MERGER

between

COMPUTER SCIENCES CORPORATION,

and

FIRST CONSULTING GROUP, INC.

dated as of

OCTOBER 30, 2007

TABLE OF CONTENTS

		Page
ARTICLE I THE MERGER			1
Section 1.1 The Merger			1
Section 1.2 Effective Time			2
Section 1.3 Closing			2
Section 1.4 Directors and Officers of the Surviving Corporation			2
Section 1.5 Subsequent Actions			2
Section 1.6 Proxy Statement; Special Meeting			3
ARTICLE II CONVERSION OF SECURITIES			4
Section 2.1 Conversion of Capital Stock			4
Section 2.2 Surrender of Certificates			5
Section 2.3 Dissenting Shares			7
Section 2.4 Treatment of Company Options, Restricted Stock Awards and Stock Bonus Awards			7
Section 2.5 Additional Benefits Matters			8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY			9
Section 3.1 Organization			9
Section 3.2 Capitalization			10
Section 3.3 Authorization; Validity of Agreement; Company Action			11
Section 3.4 Board Approvals			11
Section 3.5 Consents and Approvals; No Violations			12
Section 3.6 Company SEC Documents and Financial Statements			12
Section 3.7 Internal Controls; Sarbanes-Oxley Act			13
Section 3.8 Absence of Certain Changes			14
Section 3.9 No Undisclosed Liabilities			16
Section 3.10 Litigation			16
Section 3.11 Employee Benefit Plans; ERISA			17
Section 3.12 Taxes			19
Section 3.13 Contracts			20
Section 3.14 Title to Properties; Encumbrances			22
Section 3.15 Intellectual Property			22
Section 3.16 Labor Matters			25
Section 3.17 Compliance with Laws; Permits			26
Section 3.18 Information in the Proxy Statement			27
Section 3.19 Opinion of Financial Advisor			27
Section 3.20 Insurance			27
Section 3.21 Environmental Laws and Regulations			28
Section 3.22 Related Party Transactions			28
Section 3.23 Brokers; Expenses			28

		Page
Section 3.24 Takeover Statutes; Rights Agreement			28
Section 3.25 No Other Representations or Warranties			29
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB			29
Section 4.1 Organization			29
Section 4.2 Authorization; Validity of Agreement; Necessary Action			29
Section 4.3 Consents and Approvals; No Violations			30
Section 4.4 Litigation			30
Section 4.5 Information in the Proxy Statement			30
Section 4.6 Ownership of Company Capital Stock			31
Section 4.7 Sufficient Funds			31
Section 4.8 Ownership and Operations of Merger Sub			31
Section 4.9 Brokers and Other Advisors			31
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER			31
Section 5.1 Interim Operations of the Company			31
Section 5.2 No Solicitation			34
ARTICLE VI ADDITIONAL AGREEMENTS			38
Section 6.1 Notification of Certain Matters			38
Section 6.2 Access; Confidentiality			38
Section 6.3 Consents and Approvals			38
Section 6.4 Publicity			40
Section 6.5 Directors’ and Officers’ Insurance and Indemnification			41
Section 6.6 State Takeover Laws			42
Section 6.7 Obligations of Merger Sub			42
Section 6.8 Employee Benefits Matters			42
ARTICLE VII CONDITIONS			44
Section 7.1 Conditions to Each Party’s Obligations to Effect the Merger			44
Section 7.2 Conditions to the Obligations of Parent and Merger Sub			44
Section 7.3 Conditions to the Obligations of the Company			45
ARTICLE VIII TERMINATION			45
Section 8.1 Termination			45
Section 8.2 Effect of Termination			47
ARTICLE IX MISCELLANEOUS			48
Section 9.1 Amendment and Modification; Waiver			48
Section 9.2 Non-survival of Representations and Warranties			49
Section 9.3 Expenses			49
Section 9.4 Notices			49

		Page
Section 9.5 Certain Definitions			50
Section 9.6 Terms Defined Elsewhere			56
Section 9.7 Interpretation			58
Section 9.8 Counterparts			58
Section 9.9 Entire Agreement; No Third-Party Beneficiaries			58
Section 9.10 Severability			59
Section 9.11 Governing Law; Jurisdiction			59
Section 9.12 Waiver of Jury Trial			59
Section 9.13 Assignment			60
Section 9.14 Specific Performance			60

EXHIBITS

Exhibit A            Form of Certificate of Incorporation of the Surviving Corporation
Exhibit B            Form of Bylaws of the Surviving Corporation

iii

AGREEMENT AND PLAN OF MERGER

          This AGREEMENT AND PLAN OF MERGER (hereinafter referred to as this “ Agreement ”), dated October 30, 2007, is by and among Computer Sciences Corporation, a Nevada corporation (“ Parent ”), LB Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (“ Merger Sub ”), and First Consulting Group, Inc., a Delaware corporation (the “ Company ”).

          WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, the parties intend that Merger Sub will be merged with and into the Company with the Company as the Surviving Corporation (the “ Merger ”) in accordance with the General Corporation Law of the State of Delaware (the “ DGCL ”);

          WHEREAS, the Board of Directors of the Company (the “ Company Board of Directors ”) has unanimously, on the terms and subject to the conditions set forth herein, (i) determined that the Merger and other transactions contemplated by this Agreement are fair to and in the best interests of its stockholders, (ii) approved and declared advisable this Agreement, the Merger and the other transactions contemplated hereby and (iii) determined to recommend that the Company’s stockholders adopt this Agreement and approve the Merger; and

          WHEREAS, the Board of Directors of Parent, Merger Sub and the Company have, on the terms and subject to the conditions set forth herein, unanimously approved and declared advisable this Agreement, the Merger and the other transactions contemplated hereby.

          NOW, THEREFORE, in consideration of the mutual covenants and premises contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties to this Agreement agree as follows:

ARTICLE I

THE MERGER

          Section 1.1 The Merger

          (a) Subject to the terms and conditions of this Agreement, and in accordance with the DGCL, at the Effective Time, the Company and Merger Sub shall consummate the Merger pursuant to which (i) Merger Sub shall be merged with and into the Company and the separate corporate existence of Merger Sub shall thereupon cease, (ii) the Company shall be the surviving corporation in the Merger and shall continue to be governed by the DGCL and (iii) the separate corporate existence of the Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger. The corporation surviving the Merger is sometimes hereinafter referred to as the “ Surviving Corporation .” The Merger shall have the effects set forth in Section 259 of the DGCL.

          (b) At the Effective Time, the certificate of incorporation of the Surviving Corporation shall, by virtue of the Merger, be amended so as to read in its entirety in the form set forth as Exhibit A hereto until thereafter changed or amended as provided therein or by applicable Law. At the Effective Time, the bylaws of the Surviving Corporation shall be amended so as to read in their entirety in the form set forth in Exhibit B hereto until thereafter changed or amended as provided therein or by applicable Law.

          Section 1.2 Effective Time . Parent, Merger Sub and the Company shall cause an appropriate certificate of merger or other appropriate documents (the “ Certificate of Merger ”) to be executed and filed on the Closing Date (or on such other date as Parent and the Company may agree) with the Secretary of State of the State of Delaware 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 at the time such Certificate of Merger shall have been duly filed with, and accepted by, the Secretary of State of the State of Delaware or such later date and time as is agreed upon by the parties and specified in the Certificate of Merger, such date and time hereinafter referred to as the “ Effective Time .”

          Section 1.3 Closing . The closing of the Merger (the “ Closing ”) will take place at 10:00 a.m., California time, on a date to be specified by the parties hereto (the “ Closing Date ”), such date to be no later than the second business day after satisfaction or waiver of all of the conditions set forth in Article VII, at the offices of Latham & Watkins LLP, 650 Town Center Drive, 20th floor, Costa Mesa, California 92626, unless another time, date or place is agreed to in writing by the parties hereto.

          Section 1.4 Directors and Officers of the Surviving Corporation . The directors of Merger Sub immediately prior to the Effective Time shall, from and after the Effective Time, be appointed as the directors of the Surviving Corporation, and the officers of the Company immediately prior to the Effective Time, from and after the Effective Time, shall continue as the officers of the Surviving Corporation, in each case until their respective successors shall have been duly elected, designated or qualified, or until their earlier death, resignation or removal in accordance with the Surviving Corporation’s certificate of incorporation and bylaws.

          Section 1.5 Subsequent Actions . If at any time after the Effective Time the Surviving Corporation shall determine, in its sole discretion, or shall be advised, that any deeds, bills of sale, instruments of conveyance, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of either of the Company or Merger Sub acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger or otherwise to carry out this Agreement, then the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf of either the Company or Merger Sub, all such deeds, bills of sale, instruments of conveyance, assignments and assurances and to take and do, in the name and on behalf of each of such corporations or otherwise, all such other actions and things as may be

necessary or desirable to vest, perfect or confirm any and all right, title or interest in, to and under such rights, properties or assets in the Surviving Corporation or otherwise to carry out this Agreement.

          Section 1.6 Proxy Statement; Special Meeting .

          (a) As promptly as practicable after the date of this Agreement, the Company shall prepare and file with the Securities and Exchange Commission (the “ SEC ”) a proxy statement for the Special Meeting (together with any amendments thereof or supplements thereto and any other required proxy materials, the “ Proxy Statement ”) relating to the Merger and this Agreement in preliminary form as required by the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “ Exchange Act ”), and shall use all reasonable efforts to have the Proxy Statement cleared by the SEC; provided , that Parent, Merger Sub and their counsel shall be given a reasonable opportunity to review and comment on the Proxy Statement before it is filed with the SEC and the Company shall give due consideration to all reasonable additions, deletions or changes suggested thereto by Parent, Merger Sub and their counsel. Subject to Section 5.2(d), the Company shall include in the Proxy Statement the recommendation of the Company Board of Directors that stockholders of the Company vote in favor of the adoption of this Agreement and approval of the Merger in accordance with the DGCL. The Company shall use its reasonable best efforts to obtain and furnish the information required to be included by the SEC in the Proxy Statement and, after consultation with Merger Sub, respond promptly to any comments made by the SEC with respect to the Proxy Statement. The Company shall provide Parent, Merger Sub and their counsel with copies of any written comments, and shall inform them of any oral comments, that the Company or its counsel may receive from time to time from the SEC or its staff with respect to the Proxy Statement promptly after the Company’s receipt of such comments, and any written or oral responses thereto. Parent, Merger Sub and their counsel shall be given a reasonable opportunity to review and comment on any such written responses and the Company shall give due consideration to all reasonable additions, deletions or changes suggested thereto by Parent, Merger Sub and their counsel. Prior to and during the Special Meeting, the Company, on the one hand, and Parent and Merger Sub, on the other hand, agree to promptly correct any information provided by it for use in the Proxy Statement if and to the extent that it shall have become false or misleading in any material respect or as otherwise required by applicable Law. The Company further agrees to cause the Proxy Statement, as so corrected (if applicable), to be filed with the SEC and, if any such correction is made following the mailing of the Proxy Statement as provided in Section 1.6(b), mailed to holders of Shares, in each case as and to the extent required by the Exchange Act or the SEC (or its staff).

          (b) The Company, acting through the Company Board of Directors, shall, in accordance with and subject to the requirements of applicable Law:

          (i) as promptly as reasonably practicable after the Proxy Statement is cleared by the SEC for mailing to the Company’s stockholders, (A) duly set a record date for, call and give notice of a special meeting of its

stockholders (the “ Special Meeting ”) for the purpose of considering and taking action upon this Agreement (with the record date and meeting date set in consultation with Parent), and (B) convene and hold the Special Meeting;

          (ii) cause the definitive Proxy Statement to be mailed to its stockholders;

          (iii) except in the case of a Company Change in Recommendation specifically permitted by Section 5.2(d), (A) recommend to its stockholders that they adopt this Agreement and approve the Merger, and (B) include such recommendation in the Proxy Statement; and

          (iv) subject to Section 5.2(d), use its reasonable best efforts to (A) solicit from its stockholders proxies in favor of the adoption of this Agreement and approval of the Merger and (B) secure any approval of stockholders of the Company that is required by the DGCL and any other applicable Law to effect the Merger.

ARTICLE II

CONVERSION OF SECURITIES

          Section 2.1 Conversion of Capital Stock . At the Effective Time, by virtue of the Merger and without any action on the part of the holders of any securities of the Company or common stock, par value $0.001 per share, of Merger Sub (the “ Merger Sub Common Stock ”):

          (a) Merger Sub Common Stock . Each issued and outstanding share of Merger Sub Common Stock shall be converted into and become one fully paid and nonassessable share of common stock of the Surviving Corporation.

          (b) Cancellation of Treasury Stock and Parent-Owned Stock . All Shares that are owned by the Company and any Shares owned by Parent, Merger Sub or any of their respective Subsidiaries shall be cancelled and shall cease to exist, and no consideration shall be delivered in exchange therefor.

          (c) Conversion of Common Stock . Each issued and outstanding Share (other than Shares to be cancelled in accordance with Section 2.1(b) and other than Dissenting Shares) shall be converted into the right to receive $13.00, payable to the holder thereof in cash, without interest (the “ Merger Consideration ”). From and after the Effective Time, all such Shares shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a Share shall cease to have any rights with respect thereto (including the associated Rights), except the right to receive the Merger Consideration therefor upon the surrender of such Share in accordance with Section 2.2, without interest thereon.

          (d) Adjustment to Merger Consideration . The Merger Consideration shall be adjusted appropriately to reflect the effect of any stock split, reverse stock split,

stock dividend (including any dividend or distribution of securities convertible into Common Stock), cash dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Common Stock occurring on or after the date hereof and prior to the Effective Time.

          Section 2.2 Surrender of Certificates .

          (a) Paying Agent . Merger Sub shall designate a bank or trust company to act as the payment agent in connection with the Merger (the “ Paying Agent ”). Prior to or at the Effective Time, Parent or Merger Sub shall deposit, or cause to be deposited, with the Paying Agent the aggregate Merger Consideration with respect to Shares converted into the right to receive the Merger Consideration pursuant to Section 2.1(c). Such funds shall be invested by the Paying Agent as directed by Parent, in its sole discretion, pending payment thereof by the Paying Agent to the holders of the Shares. Earnings from such investments shall be the sole and exclusive property of Parent, and no part of such earnings shall accrue to the benefit of holders of Shares.

          (b) Procedures for Surrender . Promptly after the Effective Time, the Paying Agent shall mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding Shares (the “ Certificates ”) or non-certificate Shares represented by book-entry (“ Book-Entry Shares ”) and whose Shares were converted pursuant to Section 2.1 into the right to receive the Merger Consideration (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent and shall be in such form and have such other provisions as Parent may reasonably specify) and (ii) instructions for effecting the surrender of the Certificates or Book-Entry Shares in exchange for payment of the Merger Consideration. Upon surrender of a Certificate or Book-Entry Share for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly executed, the holder of such Certificate or Book-Entry Share shall be entitled to receive in exchange therefor the Merger Consideration for each Share formerly represented by such Certificate or Book-Entry Share and the Certificate so surrendered or book-entry shall forthwith be cancelled. If payment of the Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition precedent of payment that (A) the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and (B) the Person requesting such payment shall have paid any transfer and other similar Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Surviving Corporation that such Tax either has been paid or is not required to be 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 the Merger Consideration in cash as contemplated by this Section 2.2, without interest thereon.

          (c) Transfer Books; No Further Ownership Rights in Shares . At the Effective Time, the stock transfer books of the Company shall be closed and thereafter

there shall be no further registration of transfers of Shares on the records of the Company. From and after the Effective Time, the holders of Certificates outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Shares except as otherwise provided for herein or by applicable Law. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be cancelled and exchanged as provided in this Article II.

          (d) Termination of Fund; No Liability . At any time following twelve months after the Effective Time, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) made available to the Paying Agent and not disbursed (or for which no disbursement is pending subject only to the Paying Agent’s routine administrative procedures) to holders of Certificates or Book-Entry Shares, and thereafter such holders shall be entitled to look only to the Surviving Corporation and Parent (subject to abandoned property, escheat or other similar Laws) as general creditors thereof with respect to the Merger Consideration payable upon due surrender of their Certificates and compliance with the procedures in Section 2.2(b), without any interest thereon. Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying Agent shall be liable to any holder of a Certificate or Book-Entry Shares for Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

          (e) Withholding Rights . Parent, Merger Sub, the Surviving Corporation and the Paying Agent, as the case may be, shall be entitled to deduct and withhold from the Merger Consideration otherwise payable pursuant to this Agreement to any holder of Shares, or to a Person other than the Person in whose name the surrendered Certificate is registered at the direction of the Person in whose name the surrendered Certificate is registered, such amounts that Parent, Merger Sub, the Surviving Corporation or the Paying Agent are required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “ Code ”), the rules and Treasury Regulations promulgated thereunder or any provision of applicable state, local or foreign Law, including with respect to stock transfer Taxes payable by the seller. To the extent that amounts are so withheld by Parent, Merger Sub, the Surviving Corporation or the Paying Agent, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Shares, or to such Person other than the Person in whose name the surrendered Certificate is registered at the direction of the Person in whose name the surrendered Certificate is registered, in respect of which such deduction and withholding was made by Parent, Merger Sub, the Surviving Corporation or the Paying Agent.

          (f) Lost, Stolen or Destroyed Certificates . In the event that any Certificates shall have been lost, stolen or destroyed, the Paying Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, the Merger Consideration payable in respect thereof pursuant to Section 2.1 hereof; provided , however , that Parent may, in its discretion and as a condition precedent to the payment of such Merger Consideration, require the owners of such lost, stolen or destroyed Certificates to deliver a bond in such sum as it

may reasonably direct as indemnity against any claim that may be made against Parent, the Surviving Corporation or the Paying Agent with respect to the Certificates alleged to have been lost, stolen or destroyed.

          Section 2.3 Dissenting Shares .

          (a) Notwithstanding anything in this Agreement to the contrary, Shares outstanding immediately prior to the Effective Time and held by a holder who is entitled to demand and properly demands appraisal of such Shares (“ Dissenting Shares ”) pursuant to, and who complies in all respects with, Section 262 of the DGCL (the “ Appraisal Rights ”) shall be entitled to payment of the fair value of such Dissenting Shares in accordance with the Appraisal Rights; provided , however , that if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to dissent under the Appraisal Rights, then the right of such holder to be paid the fair value of such holder’s Dissenting Shares shall cease and such Dissenting Shares shall be deemed to have been converted as of the Effective Time into, and to have become exchangeable solely for the right to receive the Merger Consideration, without interest.

          (b) The Company shall serve prompt notice to Parent of any demands received by the Company for appraisal rights of any Shares, and Parent shall have the right to participate in and direct all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, without the prior written consent of Parent, make any payment with respect to, or settle or compromise or offer to settle or compromise, any such demand, or agree to do any of the foregoing.

          Section 2.4 Treatment of Company Options, Restricted Stock Awards and Stock Bonus Awards .

          (a) Subject to the consummation of the Merger, the Company and the Board of Directors of the Company (or the appropriate committee thereof): (i) shall cause, effective as of immediately prior to the Effective Time, the vesting and exercisability of each then outstanding Company Option held by any Person then performing services as an employee, director or consultant of the Company or any Company Subsidiary immediately prior to the Effective Time to be fully accelerated, and (ii) shall cause, effective as of the Effective Time, each then outstanding Company Option to be canceled and terminated as of the Effective Time (if not exercised prior to the Effective Time) and the holder thereof to become entitled to receive an amount of cash, if any, from the Company equal to the product of (i) the excess, if any, of the Merger Consideration over the exercise price per Share of such Company Option, and (ii) the number of Shares subject to the exercisable portion of such Company Option (such amount being hereinafter referred to as the “ Option Consideration ”). The Option Consideration shall be paid by the Surviving Corporation as soon as practicable following the Effective Time.

          (b) Subject to the consummation of the Merger, the Company and Board of Directors of the Company (or, if appropriate, any committee thereof) shall cause, effective as of immediately prior to the Effective Time, the vesting of each outstanding

restricted Share subject to a restricted stock award or stock bonus award granted under the Company Stock Plans held by any Person then performing services as an employee, director or consultant of the Company or any Company Subsidiary immediately prior to the Effective Time to be fully accelerated and the contractual restrictions thereon (including, without limitation, any contractual forfeiture, repurchase and transferability restrictions) to terminate.

          (c) Prior to the Effective Time, the Company and the Board of Directors of the Company (or the appropriate committee thereof) shall take such steps, if any, as may be required to provide that, with respect to each Section 16 Affiliate (as defined below), (i) the transactions contemplated by this Section 2.4, and (ii) any other dispositions of Company equity securities (including derivative securities), shall be exempt under Rule 16b-3 promulgated under the Exchange Act in accordance with the terms and conditions set forth in that certain No-Action Letter, dated January 12, 1999 (CCH Fed. Sec. L. Rep. 77.515). For purposes of this Agreement, “ Section 16 Affiliate ” shall mean each individual who immediately prior to the Effective Time is a director or officer of the Company subject to Section 16(b) of the Exchange Act.

          (d) The Company shall take all corporate actions necessary to effectuate the treatment of Company Options, and restricted Shares subject to any restricted stock award or stock bonus award, contemplated by this Section 2.4 and to ensure that (i) all awards issued and outstanding under the Company Stock Plans immediately prior to the Effective Time shall be cancelled as of the Effective Time, and (ii) neither any holder of Company Options and restricted Shares subject to any restricted stock award or stock bonus award granted under the Company Stock Plans, nor any other participant in any Company Stock Plan shall, from and after the Effective Time, have any right thereunder to acquire any securities of the Company, the Surviving Corporation, Parent, or any of their respective Subsidiaries or to receive any payment or benefit with respect to any award previously granted under the Company Stock Plans, except as provided in this Section 2.4.

          (e) As soon as practicable after the Effective Time, Parent shall deliver to the holders of the Company Options and the restricted Shares subject to any restricted stock award or stock bonus award granted under the Company Stock Plans appropriate notices setting forth such holders’ rights pursuant to the Company Stock Plans and this Agreement.

          Section 2.5 Additional Benefits Matters . Promptly following the date hereof, the Company shall take all necessary actions, including obtaining any required consents from holders of outstanding Company Options and the restricted Shares subject to a restricted stock award or a stock bonus award granted under the Company Stock Plans that are necessary to effect the transactions described in Section 2.4 above pursuant to the terms of the applicable Company Stock Plans and agreements evidencing the Company Options and the restricted stock awards and the stock bonus awards. All amounts payable pursuant to Section 2.4 shall be paid without interest. Any payments made pursuant to Section 2.4 shall be net of all applicable withholding Taxes that Parent, Merger Sub, the Surviving Corporation and/or the Paying Agent, as the case may be,

shall be required to deduct and withhold from such payments under the Code, the rules and regulations promulgated thereunder or any provision of applicable Law. To the extent that amounts are so deducted and withheld by Parent, Merger Sub, the Surviving Corporation or the Paying Agent, such amounts shall be treated for all purposes of this Agreement as having been paid in respect of which such deduction and withholding was made by Parent, Merger Sub, the Surviving Corporation or the Paying Agent.

ARTICLE III

REPRESENTATIONS AND
WARRANTIES OF THE COMPANY

          Except as set forth in the corresponding section or subsection of the Company’s disclosure schedule delivered to Parent immediately prior to the execution of this Agreement (the “ Company Disclosure Schedule ”), the Company represents and warrants to Parent and Merger Sub as set forth in this Article III. Each disclosure set forth in the Company Disclosure Schedule shall qualify or modify each of the representations and warranties set forth in this Article III to the extent the applicability of the disclosure to such other section is reasonably apparent from the text of the disclosure made.

          Section 3.1 Organization .

          (a) The Company and each of the Company Subsidiaries is a corporation or other legal entity duly organized, validly existing and in good standing (with respect to jurisdictions which recognize such concept) under the Laws of the jurisdiction in which it is organized and has the requisite corporate or other power, as the case may be, and authority to conduct its business as now being conducted, except for those jurisdictions where the failure to be so qualified, licensed or in good standing would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company and each of the Company Subsidiaries is duly qualified or licensed to do business and is in good standing (with respect to jurisdictions which recognize such concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, except for those jurisdictions where the failure to be so qualified or licensed or to be in good standing would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has delivered to or made available to Parent and Merger Sub prior to the execution of this Agreement true and complete copies of any amendments to the Company’s certificate of incorporation and the Company’s bylaws (the “ Company Governing Documents ”) not filed as of the date hereof with the SEC. The Company is in compliance in all material respects with the terms of the Company Governing Documents and each Company Subsidiary is in compliance in all material respects with the terms of its certificate of incorporation and bylaws (or similar governing documents or operating agreements). The Company has made available to Parent and Merger Sub true and complete copies of the minutes (or, in the case of draft minutes, the most recent drafts thereof as of the date of this Agreement)

of all meetings of the Company’s stockholders, the Company Board of Directors and each committee of the Company Board of Directors held since January 1, 2005.

          (b) Subsidiaries . All outstanding shares of capital stock of, or other Equity Interests in, each Company Subsidiary have been validly issued and are fully paid and nonassessable and are owned directly or indirectly by the Company, free and clear of any Liens, other than Permitted Liens. Other than the Company Subsidiaries, the Company does not directly or indirectly beneficially own any Equity Interests in any other Person.

          Section 3.2 Capitalization .

          (a) The authorized capital stock of the Company consists of (i) 50,000,000 shares of common stock, par value $0.001 per share (the “ Common Stock ”), (ii) 9,500,000 shares of preferred stock, par value $0.001 per share (the “ Preferred Stock ”), and (iii) 500,000 shares of series A junior participating preferred stock, par value $0.001 per share (the “ Junior Preferred Stock ”). As of October 26, 2007, (A) 27,149,761 shares of Common Stock were issued and outstanding, (B) no shares of Preferred Stock or Junior Preferred Stock were issued and outstanding, (C) no shares of Common Stock were issued and held in the treasury of the Company or otherwise owned by the Company, and (D) 3,594,956 shares of Common Stock were reserved for issuance pursuant to the Company Stock Plans. All of the outstanding shares of the Company’s capital stock are, and all Shares which may be issued pursuant to the exercise of outstanding Company Options will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and non-assessable. There are no bonds, debentures, notes or other indebtedness having voting rights (or convertible into securities having such rights) (“ Voting Debt ”) of the Company or any Company Subsidiary issued and outstanding. Except for the Company Stock-Based Awards described in Section 3.2(b), there are no (x) options, warrants, calls, pre-emptive rights, subscriptions or other rights, agreements, arrangements or commitments of any kind, including any stockholder rights plan, relating to the issued or unissued capital stock of the Company or any Company Subsidiary, obligating the Company or any Company Subsidiary to issue, transfer or sell or cause to be issued, transferred or sold any shares of capital stock or Voting Debt of, or other equity interest in, the Company or any Company Subsidiary or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any Company Subsidiary to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment (collectively this clause (x), “ Equity Interests ”) or (y) outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any Shares or any capital stock of, or other Equity Interests in, the Company or any Company Subsidiary or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in the Company or any Company Subsidiary. No Company Subsidiary owns any Shares.

          (b) As of October 26, 2007, the Company had outstanding Company Options to purchase 2,025,656 shares of Common Stock and 310,900 restricted Shares subject to restricted stock awards and stock bonus awards granted under the Company Stock Plans. Section 3.2(b) of the Company Disclosure Schedule sets forth a listing of all outstanding Company Options and restricted Shares of Common Stock subject to restricted stock awards and stock bonus awards (each, a “ Company Stock-Based Award ”) granted under the Company

Stock Plans as of October 26, 2007, including the holders thereof, the number of Shares subject to such Company Option or Company Stock-Based Award, the expiration date of such Company Option, the per Share price at which such Company Option may be exercised or the Shares subject to such Company Stock-Based Award were sold, and the vesting schedule of each such Company Option or Company Stock-Based Award. The Company has no outstanding rights to purchase Shares granted under the Company’s 2000 Associate Stock Purchase Plan. Each Company Stock-Based Award intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the exercise price of each other Company Option is no less than the fair market value of a Share as determined on the date of grant of such Company Stock-Based Award.

          (c) There are no voting trusts or other agreements to which the Company or any Company Subsidiary is a party with respect to the voting of the Company’s Common Stock or any capital stock of, or other Equity Interest of the Company or any equity interests of the Company Subsidiaries. Neither the Company nor any Company Subsidiary has granted any preemptive rights, anti-dilutive rights or rights of first refusal or similar rights.

          Section 3.3 Authorization; Validity of Agreement; Company Action . The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Merger and the other transactions contemplated hereby. The execution, delivery and performance by the Company of this Agreement, and the consummation by it of the Merger and the other transactions contemplated hereby, have been duly and validly authorized by the Company Board of Directors and, no other corporate action on the part of the Company, pursuant to the DGCL or otherwise, is necessary to authorize the execution and delivery by the Company of this Agreement, and the consummation by it of the Merger and the other transactions contemplated hereby, other than the adoption of this Agreement and approval of the Merger by the holders of a majority of all of the outstanding Shares entitled to vote on adoption of this Agreement (the “ Stockholder Approval ”), which is the only stockholder vote required. This Agreement has been duly executed and delivered by the Company and, assuming due and valid authorization, execution and delivery hereof by Parent and Merger Sub, is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except that (a) such enforcement may be subject to applicable bankruptcy, insolvency or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

          Section 3.4 Board Approvals . The Company Board of Directors, at a meeting duly called and held, has unanimously (i) determined that this Agreement, the Merger and the other transactions contemplated hereby are fair to, and in the best interests of the stockholders of the Company, (ii) approved and declared advisable this

Agreement, the Merger and the other transactions contemplated hereby, which approval, to the extent applicable, constituted approval under the provisions of Section 203 of the DGCL as a result of which this Agreement, the Merger and the other transactions contemplated hereby are not, and will not be, subject to the restrictions on “business combinations” under the provisions of Section 203 of the DGCL or any other applicable Takeover Laws; and (iii) subject to Section 5.2(d), recommended that the stockholders of the Company adopt this Agreement and approve the Merger (the “ Company Recommendation ”).

          Section 3.5 Consents and Approvals; No Violations . None of the execution, delivery or performance of this Agreement by the Company, the consummation by the Company of the Merger or any other transaction contemplated hereby or compliance by the Company with any of the provisions of this Agreement will (i) conflict with or result in any breach of any provision of the Company Governing Documents or the organizational documents of any Company Subsidiary, (ii) require any filing by the Company or any Company Subsidiary with, or the permit, authorization, consent or approval of, any court, arbitral tribunal, administrative agency or commission or other governmental or other regulatory authority or agency, foreign, federal, state, local or supernational entity (a “ Governmental Entity ”) (except for (A) compliance with any applicable requirements of the Exchange Act, (B) any filings as may be required under the DGCL in connection with the Merger, (C) filings, permits, authorizations, consents and approvals as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) or any other applicable Foreign Antitrust Approvals or (D) the filing with the SEC and Nasdaq Global Market (“ Nasdaq ”) of (1) the Proxy Statement and (2) such reports under Section 13(a) of the Exchange Act as may be required in connection with this Agreement and the Merger), (iii) result in a modification, violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any right, including, but not limited to, any right of termination, amendment, cancellation or acceleration) under, or result in the creation of any Lien in or upon any of the properties, assets or rights of the Company or any Company Subsidiary under, any of the terms, conditions or provisions of any Company Material Contracts or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company, any Company Subsidiary or any of their respective properties or assets; except in each of clauses (ii), (iii) or (iv) where (x) any failure to obtain such permits, authorizations, consents or approvals, (y) any failure to make such filings or (z) any such modifications, violations, rights, breaches or defaults have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or have a material adverse effect on the ability of the Company to perform its obligations hereunder or to consummate the Merger and the other transactions contemplated hereby.

          Section 3.6 Company SEC Documents and Financial Statements . The Company and each of the Company Subsidiaries has filed or furnished (as applicable) on a timely basis with the SEC all forms, reports, schedules, certifications, statements and other documents required by it to be filed or furnished (as applicable) since and including January 1, 2004, under the Exchange Act or the Securities Act of 1933, as amended (the “ Securities Act ”) together with all certifications required pursuant to the Sarbanes-Oxley

Act of 2002 (the “ Sarbanes-Oxley Act ”) (such documents and any other documents filed by the Company and each Company Subsidiary with the SEC, as have been amended since the time of their filing, collectively, the “ Company SEC Documents ”). As of their respective filing dates (or, if subsequently amended or supplemented, at the time of such amendment or supplement) the Company SEC Documents (i) did not (or with respect to Company SEC Documents filed after the date hereof, will not) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading and (ii) complied in all material respects with the applicable requirements of the Exchange Act or the Securities Act, as the case may be, the Sarbanes-Oxley Act and the applicable rules and regulations of the SEC thereunder. None of the Company Subsidiaries is currently required to file any forms, reports or other documents with the SEC. As of the date hereof, there are no outstanding or unresolved comments received by the Company from the SEC staff with respect to any of the Company SEC Documents. To the knowledge of the Company, there is no ongoing SEC investigation or review with respect to the Company or any of the Company SEC Documents. All of the audited consolidated financial statements and unaudited consolidated interim financial statements of the Company and its consolidated Subsidiaries included in the Company SEC Documents (collectively, the “ Financial Statements ”), (A) have been or will be, as the case may be, prepared from, are in accordance with, and accurately reflect the books and records of the Company and its consolidated Subsidiaries in all material respects, (B) have been or will be, as the case may be, prepared in compliance in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto and in accordance with United States generally accepted accounting principles (“ GAAP ”) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of interim financial statements, for normal and recurring year-end adjustments as permitted by the SEC on Form 10-Q, 8-K or any successor or like form under the Exchange Act) and (C) fairly present in all material respects the consolidated financial position and the consolidated results of operations and cash flows of the Company and its consolidated Subsidiaries as of the times and for the periods referred to therein.

          Section 3.7 Internal Controls; Sarbanes-Oxley Act .

          (a) The Company and the Company Subsidiaries have designed and maintained a system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. The Company (i) has designed and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and (ii) has disclosed to the Company’s auditors and the audit committee of the Company Board of Directors (and

made summaries of such disclosures available to Parent) (A) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect the Company’s ability to record, process, summarize and report financial information and (B) any fraud or alleged fraud, in each case, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. The Company has been in compliance in all material respects with all effective provisions of the Sarbanes-Oxley Act since its enactment.

          (b) Since January 1, 2005, (i) neither the Company nor any Company Subsidiary nor, to the knowledge of the Company, any director, officer, employee, auditor, accountant or Representative of the Company or any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices and (ii) no attorney representing the Company or any Company Subsidiary, whether or not employed by the Company or any Company Subsidiary, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Company Board of Directors any committee thereof or to any director or officer of the Company.

          (c) The Company is in compliance in all material respects with (i) the applicable provisions of the Sarbanes-Oxley Act and (ii) the applicable listing and corporate governance rules and regulations of Nasdaq.

          Section 3.8 Absence of Certain Changes .

          (a) Except as contemplated by this Agreement or in the Company SEC Documents filed prior to the date hereof, since December 29, 2006, each of the Company and each Company Subsidiary has conducted, in all material respects, its respective business in the ordinary course of business consistent with past practice.

          (b) From December 29, 2006 through the date of this Agreement, (A) no fact(s), change(s), event(s), development(s) or circumstances have occurred, arisen, come into existence or become known, which have had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and (B) except as disclosed in the Company SEC Documents (but excluding all exhibits, schedules, annexes or appendices thereto or included therein) filed prior to the date hereof, neither the Company nor any Company Subsidiary has:

          (i) (A) declared, set aside or paid any dividend or other distribution payable in cash, stock or property (or any combination thereof) with respect to the Company’s capital stock or (B) amended the Company Governing Documents;

          (ii) redeemed, purchased or acquired, or offered to redeem, purchase or acquire, any Equity Interests, except (x) repurchases or forfeitures of unvested restricted Shares subject to restricted stock awards or stock bonus awards granted under the Company Stock Plans in accordance with the terms and conditions of such awards, (y) repurchases of unvested Shares in connection with the withholding of Shares upon the exercise of Company Options or the vesting of restricted Shares subject to restricted stock awards or stock bonus awards granted under the Company Stock Plans, and (z) repurchases of Shares from employees of the Company or a Company Subsidiary in relation to the loan agreements with such employees that are set forth in Section 5.1(d)(iii) of the Company Disclosure Schedule;

          (iii) acquired (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction, or any series of related transactions, (x) except in the ordinary course of business consistent with past practice, any assets having a fair market value in excess of $1,000,000 or (y) any equity interests in any Person or any business or division of any Person or all or substantially all of the assets of any Person (or business or division thereof);

          (iv) transferred, leased, licensed, sold, mortgaged, pledged, disposed of, or encumbered any of its material assets, other than (x) sales of inventory and licenses of software or other Intellectual Property, in each case, to customers in the ordinary course of business consistent with past practice, and (y) dispositions of assets no longer used in the operation of the business;

          (v) incurred or assumed any long-term or short-term indebtedness, except short-term payables incurred in the ordinary course of business consistent with past practice;

          (vi) assumed, guaranteed, or endorsed, or otherwise became liable or responsible for (whether directly, contingently or otherwise), the obligations of any other Person, other than obligations of wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;

          (vii) made any loans, advances or capital contributions to, or investments in, any other Person, other than loans, advances or capital contributions to, or investments in, wholly owned Company Subsidiaries made in the ordinary course of business consistent with past practice;

          (viii) other than as required by applicable Law, made any change in, or accelerate the vesting of, the compensation or benefits payable or to become payable to, or granted any severance or termination pay to, any employee of the Company with a title equal or senior to Vice President, or made any loans to any such Person or made any change in its existing borrowing or lending arrangements for or on behalf of any of such Person pursuant to a Benefit Plan or otherwise, except (i) as required by and pursuant to previously existing contractual arrangements or policies of the Company, or (ii) to the extent

necessary to comply with, or satisfy an exemption from, Section 409A of the Code without increasing the benefits provided to any Person;

          (ix) incurred any capital expenditures or any obligations or liabilities in respect thereof in excess of $1,000,000, in the aggregate, except those contemplated in the capital expenditures budgets for the Company and the Company Subsidiaries previously made available to Parent;

          (x) entered into any agreement or arrangement that limits or otherwise restricts the Company, any Company Subsidiary, or upon completion of the Merger, Parent or its Subsidiaries or any successor thereto from engaging or competing in any line of business or in any location;

          (xi) changed any of the accounting methods used by it materially affecting its assets, liabilities or business, except for such changes required by GAAP or Regulation S-X promulgated under the Exchange Act;

          (xii) entered into any new line of business outside of its existing business segments that is material to the Company and the Company Subsidiaries, taken as a whole;

          (xiii) paid, discharged, settled or satisfied any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), other than (i) performance of contractual obligations in accordance with their terms, (ii) payment, discharge, settlement or satisfaction thereof in the ordinary course of business, or (iii) settlement or satisfaction of outstanding claims or litigation for less than $500,000 in the aggregate; and

          (xiv) made any material revaluation of any of its assets, including writing down the value of capitalized inventory or writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice.

          Section 3.9 No Undisclosed Liabilities . Except (a) as reflected or otherwise reserved against on the Financial Statements included in the Company 10-Q, (b) for liabilities and obligations incurred since June 29, 2007 in the ordinary course of business than have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and (c) for liabilities and obligations incurred under this Agreement or in connection with the Merger or the other transactions contemplated hereby, neither the Company nor any Company Subsidiary has incurred any liabilities or obligations of any nature, whether or not absolute, accrued or contingent, and whether due or to become due, other than as have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

          Section 3.10 Litigation . There is no claim, action, suit, arbitration, investigation by a Governmental Entity, alternative dispute resolution action or any other judicial or administrative proceeding, in Law or equity (collectively, a “ Legal

Proceeding ”), pending against (or to Company’s knowledge, threatened against or naming as a party thereto), the Company, any Company Subsidiary, or any executive officer or director of the Company or any Company Subsidiary (in their capacity as such) other than Legal Proceedings that (a) do not involve an amount in controversy in excess of $500,000, (b) do not seek material injunctive relief, or (c) have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Neither the Company nor any Company Subsidiary is subject to any outstanding order, writ, injunction, decree or arbitration ruling or judgment of a Governmental Entity which has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or which would reasonably be expected to prevent or materially delay the performance by the Company of its obligations hereunder or the consummation of the Merger or any of the other transactions contemplated hereby.

          Section 3.11 Employee Benefit Plans; ERISA .

          (a) Section 3.11(a) of the Company Disclosure Schedule sets forth a correct and complete list of all “employee benefit plans” as that term is defined in Section 3(3) of ERISA and all other benefit plans, programs, agreements or arrangements, including pension, retirement, profit sharing, deferred compensation, stock option, change in control, retention, equity or equity-based compensation, stock purchase, employee stock ownership, severance pay, vacation, bonus or other incentive plans, all medical, vision, dental or other health plans, all life insurance plans, and all other material employee benefit plans or fringe benefit plans, in each case, whether oral or written, funded or unfunded, or insured or self-insured, maintained or sponsored by the Company or any Company Subsidiary, or to which the Company or any Company Subsidiary contributes or is obligated to contribute thereunder, or with respect to which the Company or any Company Subsidiary has or may have any liability (contingent or otherwise) (the “ Benefit Plans ”).

          (b) Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code, and each trust that is related to a Benefit Plan and intended to be tax exempt under Section 501(a) of the Code, has been determined by the Internal Revenue Service to be qualified under Section 401(a) of the Code or exempt from taxation under Section 501(a) of the Code and, to the knowledge of the Company, nothing has occurred that would adversely affect the qualification or tax exemption of any such Benefit Plan or related trust. Each Benefit Plan (other than a Foreign Benefit Plan) and any related trust complies in all material respects, and has been maintained and administered in compliance in all material respects, with ERISA, the Code, and other applicable Laws. Each Benefit Plan (other than a Foreign Benefit Plan) and any related trust that is required to be funded has been funded by the Company or any Company Subsidiary in compliance in all material respects with ERISA, the Code, and other applicable Laws. With respect to each Benefit Plan (other than a Foreign Benefit Plan), the payments, premiums, contributions, distributions and reimbursements required to have been made under such Benefit Plan have been made in compliance in all material respects with such Benefit Plan. There are no suits, claims, proceedings, actions, governmental audits or investigations with respect to any Benefit Plan that are pending or, to the knowledge of

the Company, threatened (other than routine claims for benefits in the normal course). There has been no “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary duty (as determined under ERISA) with respect to any Benefit Plan that could result in any material liability to the Company or any Company Subsidiary.

          (c) No Benefit Plan (i) is a “multiemployer plan” (as defined in Section 3(37) or 4001(a)(3) of ERISA), (ii) is subject to Part 3 of Subtitle B of Title I of ERISA or Title IV of ERISA or Section 412 of the Code, (iii) provides for post-retirement or other post-employment welfare benefits (other than health care continuation coverage as required by Section 4980B of the Code or ERISA), (iv) is a “multiple employer plan” (as defined in Section 210 of ERISA or Section 413(c) of the Code), or (v) is a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA).

          (d) Neither the Company nor any Company Subsidiary has any plan or obligation to create any additional Benefit Plan, or to amend or modify any existing Benefit Plan in such a manner as to materially increase the cost of such Benefit Plan to the Company or any Company Subsidiary.

          (e) (i) Neither this Agreement (or the consummation of the Merger) nor any Benefit Plan or other agreement or contract between the Company or any Company Subsidiary and an employee or other individual, could reasonably be expected to result in any “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code; and (ii) except as contemplated under this Agreement, neither the execution and delivery of this Agreement nor the consummation of the Merger will cause the acceleration of vesting in, or payment of, any benefits under any Benefit Plan or otherwise accelerate or increase any liability or obligation under any Benefit Plan.

          (f) With respect to the Benefit Plans, to the extent applicable, correct and complete copies of the following have been delivered or made available to Parent by the Company: (i) all Benefit Plans (including all amendments and attachments thereto); (ii) written summaries of any Benefit Plan not in writing, (iii) all related trust documents; (iv) all insurance contracts or other funding arrangements; (v) the most recent annual report (Form 5500) filed with the Internal Revenue Service; (vi) the most recent determination letter from the Internal Revenue Service; and (vii) the most recent summary plan description and any summary of material modification thereto.

          (g) To the knowledge of the Company, no payment pursuant to any Benefit Plan, or other agreement or contract between the Company or a Company Subsidiary and any “service provider” (as such term is defined in Section 409A of the Code and the Treasury Regulations and Internal Revenue Service guidance thereunder), would subject any Person to a Tax pursuant to Section 409A of the Code, whether pursuant to the consummation of the Merger or otherwise.

          (h) Section 3.11(h) of the Company Disclosure Schedule lists each benefit plan, program, agreement or arrangement maintained or sponsored by the Company or any Company Subsidiary with respect to which the Company or any

Company Subsidiary has any material liability or obligation that is maintained primarily for the benefit of employees of the Company or any Company Subsidiary who are employed, or individuals who are independent contractors of the Company or any Company Subsidiary who are working, outside of the United States (each, a “ Foreign Benefit Plan ”). To the knowledge of the Company, (i) each Foreign Benefit Plan has been maintained and administered in compliance in all material respects with its terms, the requirements of any applicable collective bargaining agreement and with applicable Laws, and (ii) each Foreign Benefit Plan required to be funded has been funded by the Company or any Company Subsidiary in compliance in all material respects with its terms, the requirements of any applicable collective bargaining agreement and with applicable Laws, and no Foreign Benefit Plan has any unfunded or underfunded liabilities.

          (i) There does not exist any Controlled Group Liability that would reasonably be expected to be a material liability (contingent or otherwise) of the Company or of any of the Company Subsidiaries following the Closing.

          Section 3.12 Taxes .

          (a) The Company and each of the Company Subsidiaries has timely filed all material Tax Returns required to be filed (taking into account any extensions of time within which to file such Tax Returns), and all such Tax Returns are complete and accurate, except to the extent the failure of any such Tax Return to be complete and accurate would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Except as set forth on Schedule 3.12(a) , the Company and each of the Company Subsidiaries has paid all Taxes shown to be due on such Tax Returns, or has established an adequate reserve therefor in accordance with GAAP, subject to such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

          (b) There currently are no audits, examinations or judicial or other administrative proceedings currently pending or in progress or, to the knowledge of the Company, threatened with respect to any Taxes of the Company or any of the Company Subsidiaries, subject to exceptions for any proceedings that if resolved in a manner unfavorable to the Company or any of the Company Subsidiaries would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Neither the Company nor any of the Company Subsidiaries have waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. To the knowledge of the Company, no Governmental Entity has claimed that the Company or any of the Company Subsidiaries is or may be subject to taxation in a jurisdiction where the Company or Company Subsidiary does not file Tax Returns.

          (c) There are no material Tax Liens upon any property or assets of the Company or any of the Company Subsidiaries, except Liens for Taxes not yet delinquent or Taxes being contested in good faith by appropriate proceedings.

          (d) All Taxes required to be withheld, collected or deposited by or with respect to the Company and each of the Company Subsidiaries have been timely withheld, collected or deposited, as the case may be, and to the extent required by applicable Law, have been paid to the relevant Governmental Entity, subject to such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

          (e) Neither the Company nor any of the Company Subsidiaries is responsible for the Taxes of any other Person (other than the Company or one of the Company Subsidiaries) that would have a Company Material Adverse Effect. Neither the Company nor any of the Company Subsidiaries is a party to, is bound by or has any obligation under any Tax sharing, Tax allocation or Tax indemnity agreement or similar contract or arrangement.

          (f) Neither the Company nor any of the Company Subsidiaries (A) has been a party to a “listed transaction” as defined in Section 1.6011-4 of the Treasury Regulations, or any analogous transaction under any state, local or foreign Tax Law, or (B) during the five year period ending on the date hereof, has been a distributing or controlled corporation in a transaction intended to be governed by Section 355 of the Code.

          Section 3.13 Contracts .

          (a) Except as filed as exhibits to the Company SEC Documents filed prior to the date hereof, Section 3.13(a) of the Company Disclosure Schedule sets forth a list of each note, bond, mortgage, Lien, indenture, lease, license, contract or agreement, or other instrument or obligation to which the Company or any Company Subsidiary is a party or by which any of them or any of their respective properties or assets is bound (the “ Company Agreements ”) which, as of the date hereof:

          (i) is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K under the Securities Act);

          (ii) involved the exchange of consideration in excess of $500,000 during the six months ended September 28, 2007;

          (iii) contains any non-compete or exclusivity provisions with respect to any line of business or geographic area with respect to the Company or any Company Subsidiary, or upon consummation of the Merger, Parent or its Subsidiaries, or which restricts the conduct of any line of business by the Company or any Company Subsidiary;

          (iv) relates to a partnership, joint venture or similar arrangement, unless immaterial to the Company and the Company Subsidiaries;

          (v) is an employment or consulting contract with any current executive of the Company or a Company Subsidiary or any member of the Company Board of Directors;

          (vi) will have increased benefits or accelerated vesting of benefits due to the consummation of the Merger;

          (vii) relates to any pending acquisition or disposition by the Company or any of the Company Subsidiaries of properties or assets or, to the extent the Company or any Company Subsidiary has any ongoing, future or contingent obligations, any completed acquisition or disposition by the Company or any of the Company Subsidiaries, except, in each case, for acquisitions and dispositions of properties, assets and inventory in the ordinary course of business;

          (viii) is a Company IP Agreement that is material to the business of the Company or any Company Subsidiary; or

          (ix) relates to the borrowing of money or extension of credit, the placing of any Lien, or the guaranty thereof by the Company or any Company Subsidiary, in each case having a principal amount of indebtedness in excess of $250,000, other than (A) accounts receivables and payables and (B) loans to direct or indirect wholly-owned Subsidiaries, in each case in the ordinary course of business.

          (b) Each contract of the type described above in Section 3.13(a), whether or not set forth in Section 3.13(a) of the Company Disclosure Schedule, is referred to herein as a “ Company Material Contract .” Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) each Company Material Contract is valid and binding on the Company and each Company Subsidiary party thereto and each other party thereto, as applicable, and in full force and effect (except that (x) such enforcement may be subject to applicable bankruptcy, insolvency or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally and (y) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought), and (ii) there is no event or condition which has occurred or exists, which constitutes or could constitute (with or without notice, the happening of any event and/or the passage of time) a default or breach under any Company Material Contract by the Company or any Company Subsidiary or, to the knowledge of the Company, any other party to any Company Material Contract.

          (c) The Company has delivered or made available to Parent or provided to Parent for review, prior to the execution of this Agreement, true and complete copies of all of the Company Material Contracts.

          (d) Section 3.13(d) of the Company Disclosure Schedule sets forth a list of the Company’s top 15 customers, on a consolidated basis, as of December 31, 2006 and July 31, 2007 (in each case, by sales to such customers in the 12-month period ending as of such date). As of the date hereof, neither the Company nor any Company Subsidiary has received any written notice from any such customer to the effect that any such customer will or intends to stop, decrease the rate of, or change the terms (whether

related to payment, price or otherwise) with respect to buying or licensing software products or services from the Company or the Company Subsidiaries (whether as a result of the consummation of the Merger or otherwise), and, to the Company’s knowledge, no such customer has any such intention.

          Section 3.14 Title to Properties; Encumbrances . Section 3.14 of the Company Disclosure Schedule sets forth the address of each Company Property. The Company and each of the Company Subsidiaries has good and valid title to, or in the case of the Company Property and leased tangible assets, a valid leasehold interest in, all of its real properties and tangible assets that are necessary for the Company and its Subsidiaries to conduct their respective businesses as currently conducted, subject to no Liens, except for (a) Liens reflected in a consolidated balance sheet as of the December 29, 2006 (“ Balance Sheet Date ”), (b) Liens consisting of zoning or planning restrictions, easements, permits and other restrictions or limitations on the use of real property or irregularities in title thereto, which do not materially impair the value of such properties or the use of such property by the Company or any of the Company Subsidiaries in the operation of its respective business, (c) Liens for current Taxes, assessments or governmental charges or levies on property not yet due and payable and Liens for Taxes that are being contested in good faith by appropriate proceedings and for which an adequate reserve has been provided on the appropriate financial statements and (d) Liens which would not materially interfere with the use of such property or assets by the Company and the Company Subsidiaries (the foregoing Liens (a)-(d), “ Permitted Liens ”). The Company has delivered or made available to Parent or Merger Sub a true and complete copy of each lease document (including all amendments, extensions, renewals, guaranties and other agreements with respect thereto) relating to each Company Property. The Company and each of the Company Subsidiaries are in compliance with the terms of all leases relating to the Company Property to which they are a party, except such compliance which has not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. All such leases relating to the Company Property are in full force and effect, and the Company and each of the Company Subsidiaries enjoys peaceful and undisturbed possession under all such leases. Neither the Company nor any of the Company Subsidiaries owns any real property.

          Section 3.15 Intellectual Property .

          (a) Section 3.15(a) of the Company Disclosure Schedule contains a complete and accurate list, as of the date hereof, of the following Owned Company IP: (i) all Company Registered IP; (ii) all unregistered Trademarks used in connection with Company Products that are material to the Company; and (iii) software that is material to the Company; in each case listing, as applicable, (A) the name of the applicant or registrant and current owner, (B) the jurisdiction where the application or registration is filed, and (C) the application or registration number. The Company and each of the Company Subsidiaries has in a timely manner made all filings, payments, and recordations required to obtain and maintain ownership of the applicable Intellectual Property Rights in each item of Company Registered IP, except for such matters which have not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

          (b) Neither the Company nor any Company Subsidiary has granted any exclusive license under or to any material Company IP. To the knowledge of the Company, there are no pending disputes regarding any agreement (1) under which the Company or any Company Subsidiary uses or has the right to use any Licensed Company IP or (2) under which the Company or any Company Subsidiary has licensed or otherwise permitted others the right to use any Company IP or Company Products (such agreements described in clauses (1) and (2) above, the “ Company IP Agreements ”).

          (c) To the knowledge of the Company, the Company and the Company Subsidiaries own or otherwise have a license to use all Intellectual Property Rights used in the conduct of the business of, or necessary to conduct the business of, the Company and the Company Subsidiaries as conducted prior to the Closing Date except such Intellectual Property Rights that, if not possessed by the Company or any Company Subsidiary, would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

          (d) The Company or a Company Subsidiary exclusively owns all right, title and interest in the Owned Company IP, free and clear of all Liens, other than Permitted Liens and the Company IP Agreements. Without limiting the foregoing, each Person who is or was an employee or contractor of Company or any Company Subsidiary and who is or was involved in the creation or development of any Owned Company IP has executed a valid agreement containing an assignment of all Intellectual Property Rights in such employee’s or contractor’s contribution to such Owned Company IP.

          (e) The Company and each Company Subsidiary has taken reasonable steps to protect and preserve the confidentiality of the Trade Secrets of the Company or of any Company Subsidiary, and to the knowledge of the Company, there are no unauthorized uses, disclosures or misappropriation of any such Trade Secrets by any Person. To the Company’s knowledge, all use and disclosure by the Company or the Company Subsidiaries of Trade Secrets owned by another Person has been pursuant to the terms of a written agreement with such Person permitting such use or was otherwise lawful. The Company and the Company Subsidiaries have executed confidentiality agreements with all employees and contractors to whom the Company or any Company Subsidiary has granted access to Trade Secrets, which agreements prohibit such employees and contractors from disclosing such Trade Secrets to third parties or using such Trade Secrets for any purpose other than for the benefit of the Company or a Company Subsidiary.

          (f) To the knowledge of the Company, none of the Company Products or operation of the Company’s or a Company Subsidi