AGREEMENT AND PLAN OF MERGER

EXHIBIT 2.1

EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER

NUANCE COMMUNICATIONS, INC.

VANHALEN ACQUISITION CORPORATION

VANHALEN ACQUISITION LLC

VIECORE, INC.

U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent

AND

SHAREHOLDER REPRESENTATIVE,

Dated as of October 21, 2007

EXECUTION VERSION

TABLE OF CONTENTS

				Page
ARTICLE I THE MERGER					2
1.1		The Integrated Merger			2
1.2		Effective Time			2
1.3		Effect of the First Step Merger and the Second Step Merger			3
1.4		Formation Documents			3
1.5		Management			4
1.6		Definitions			4
1.7		Effect of First Step Merger on the Capital Stock of the Constituent Corporations			12
1.8		Dissenting Shares			17
1.9		Surrender of Certificates			17
1.10		No Further Ownership Rights in Company Capital Stock			19
1.11		Lost, Stolen or Destroyed Certificates			19
1.12		Reorganization Status			20
1.13		Taking of Necessary Action; Further Action			20
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY					20
2.1		Organization of the Company			20
2.2		Company Capital Structure			21
2.3		Subsidiaries			22
2.4		Authority			22
2.5		No Conflict			23
2.6		Consents			23
2.7		Company Financial Statements			23
2.8		No Undisclosed Liabilities			24
2.9		No Changes			24
2.10		Tax Matters			27
2.11		Restrictions on Business Activities			30
2.12		Title to Properties; Absence of Liens and Encumbrances; Condition of Equipment; Customer Information			31
2.13		Intellectual Property			31
2.14		Agreements, Contracts and Commitments			37
2.15		Government Contracts			39
2.16		Interested Party Transactions			41
2.17		Governmental Authorization			41
2.18		Litigation			42
2.19		Minute Books			42
2.20		Environmental Matters			42
2.21		Brokers’ and Finders’ Fees; Third Party Expenses			42
2.22		Employee Benefit Plans and Compensation			43
2.23		Insurance			48

TABLE OF CONTENTS
(Continued)

				Page
2.24		Compliance with Laws			48
2.25		Bank Accounts, Letters of Credit and Powers of Attorney			48
2.26		Representations Complete			49
2.27		Information Supplied			49
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND THE SUBS					49
3.1		Organization, Standing and Power			49
3.2		Authority			50
3.3		Consents			50
3.4		Capital Resources			50
3.5		No Conflict			50
3.6		Parent Common Stock			50
3.7		SEC Documents			51
3.8		Parent Financial Statements			51
3.9		No Undisclosed Liabilities			51
3.10		Absence of Certain Changes or Events			51
3.11		Interim Operations of Subs			52
3.12		Litigation			52
3.13		Information Supplied			52
3.14		S-3 Eligibility			53
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME					53
4.1		Conduct of Business of the Company			53
4.2		No Solicitation			57
4.3		Procedures for Requesting Parent Consent			58
ARTICLE V ADDITIONAL AGREEMENTS					58
5.1		Information Statement; Shareholder Approval			58
5.2		Access to Information			59
5.3		Confidentiality			60
5.4		Expenses			60
5.5		Public Disclosure			61
5.6		Consents			61
5.7		FIRPTA Compliance			62
5.8		Reasonable Efforts; Regulatory Filings			62
5.9		Notification of Certain Matters			63
5.10		Additional Documents and Further Assurances			63
5.11		New Employment Arrangements			64
5.12		Sale of Shares			65
5.13		Termination of 401(k) Plan			65
5.14		Section 280G			66
5.15		Financials			66
5.16		Acknowledgement; Closing Schedule			67
5.17		Indemnification of Directors and Officers			67

TABLE OF CONTENTS
(Continued)

				Page
5.18		Charter Amendment			68
5.19		Additional Tax Matters			68
5.20		Termination of Employment Agreement			69
ARTICLE VI CONDITIONS TO THE FIRST STEP MERGER					69
6.1		Conditions to Obligations of Each Party to Effect the First Step Merger			69
6.2		Conditions to the Obligations of Parent and Sub I			70
6.3		Conditions to Obligations of the Company			74
ARTICLE VII SURVIVAL OF REPRESENTATIONS AND WARRANTIES					74
7.1		Survival of Representations, Warranties and Covenants			74
7.2		Indemnification			75
7.3		Escrow Arrangements			76
7.4		Indemnification Claims			82
7.5		Shareholder Representative			88
7.6		Maximum Payments; Remedy			90
7.7		Treatment of Indemnity Payments; Miscellaneous			91
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER					91
8.1		Termination			91
8.2		Special Termination.			92
8.3		Effect of Termination			93
8.4		Amendment			93
8.5		Extension; Waiver			93
ARTICLE IX REGISTRATION					94
9.1		Filing and Effectiveness of Shareholder Registration Statement			94
9.2		Limitations on Registration Rights			95
9.3		Requirements of Shareholders			96
9.4		Assignment of Rights			98
ARTICLE X GENERAL PROVISIONS					98
10.1		Notices			98
10.2		Interpretation			100
10.3		Counterparts			101
10.4		Entire Agreement; Assignment			101
10.5		Severability			101
10.6		Other Remedies			101
10.7		Governing Law			101
10.8		Rules of Construction			102
10.9		WAIVER OF JURY TRIAL			102
10.10		Customer Identification Program			102

INDEX OF EXHIBITS

Exhibit		Description
Exhibit A		Form of Voting Agreement
Exhibit B-1		Form of Employee Proprietary Information, Inventions and Non-Competition Agreement (Chief Executive Officer)
Exhibit B-2		Form of Employee Proprietary Information, Inventions and Non-Competition Agreement (non-Key Employees)
Exhibit B-3		Form of Employee Proprietary Information, Inventions and Non-Competition Agreement (Key Employees)
Exhibit C-1		Form of Certificate of Merger
Exhibit C-2		Form of Delaware Second Step Certificate of Merger
Exhibit C-3		Form of New Jersey Second Step Certificate of Merger
Exhibit D		Form of Legal Opinion
Exhibit E		Description of Escrow Agent’s Insured Money Market Account
Exhibit F		Customer Identification Program Notice

Schedule		Description
Schedule A		Major Shareholders
Schedule 1.6(lviii)		Principal Shareholders

The Company’s Disclosure Schedule

     THIS AGREEMENT AND PLAN OF MERGER (the “ Agreement ”) is made and entered into as of October 21, 2007 by and among Nuance Communications, Inc., a Delaware corporation (“ Parent ”), Vanhalen Acquisition Corporation, a New Jersey corporation and a wholly-owned subsidiary of Parent (“ Sub I ”), Vanhalen LLC, a Delaware limited liability company and a wholly-owned subsidiary of Parent (“ Sub II, ” and with Sub I, the “ Subs ”), Viecore, Inc., a New Jersey corporation (the " Company ”), U.S. Bank National Association, to act as escrow agent hereunder, and as a party to this Agreement solely with respect to Article VII herein (the “ Escrow Agent ”) and Thoma Cressey Bravo, Inc. (“ TCB ”), who will serve as the representative of the Company’s Shareholders (as defined in Section 1.6 hereof), and is referred to herein from time to time as the “ Shareholder Representative .”

RECITALS

     A. The Boards of Directors of each of Parent, Sub I and the Company believe it is in the best interests of each company and its respective stockholders/shareholders that Parent acquire the Company through the statutory merger of Sub I with and into the Company (the “ First Step Merger ”) and, in furtherance thereof, have approved the First Step Merger.

     B. Following the First Step Merger, Parent shall cause the Company to merge with and into Sub II (the “ Second Step Merger ” and, taken together with the First Step Merger, the “ Integrated Merger ” or the “ Merger ”). The Integrated Merger is intended to constitute a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “ Code ”). Parent and the Company intend that the First Step Merger and the Second Step Merger will constitute integrated steps in a single “plan of reorganization” within the meaning of Treas. Reg. §§1.368-2(g) and 1.368-3, which plan of reorganization the parties adopt by executing this Agreement.

     C. Pursuant to the First Step Merger, among other things, and subject to the terms and conditions of this Agreement, all of the issued and outstanding capital stock of the Company shall be converted into the right to receive the consideration set forth herein.

     D. A portion of the consideration payable in connection with the First Step Merger shall be placed in escrow as security for the indemnification obligations set forth in this Agreement.

     E. The Company, on the one hand, and Parent and the Subs, on the other hand, desire to make certain representations, warranties, covenants and other agreements in connection with the Integrated Merger.

     F. Concurrent with the execution and delivery of this Agreement, as a material inducement to Parent and the Subs to enter into this Agreement, (i) the Major Shareholders of the Company (as defined in Schedule A) are entering into Voting Agreements, in substantially the form attached hereto as Exhibit A (the “ Voting Agreements ”), with Parent, pursuant to which such shareholders have irrevocably agreed to vote in favor of the Integrated Merger and the transactions contemplated thereby and to other matters set forth therein, and (ii) the Chief Executive Officer of

the Company has entered into an offer letter and an Employee Proprietary Information, Inventions and Non-Competition Agreement, each in substantially the form attached hereto as Exhibit B-1 , with Parent or the Final Surviving Entity, as determined by Parent.

     NOW, THEREFORE, in consideration of the mutual agreements, covenants and other promises set forth herein, the mutual benefits to be gained by the performance thereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the parties hereby agree as follows:

ARTICLE I

     1.1 The Integrated Merger .  At the Effective Time (as defined in Section 1.2 hereof) and subject to and upon the terms and conditions of this Agreement and the applicable provisions of the Business Corporation Act of New Jersey (“ New Jersey Law ”), including Section 14A:10-1 of New Jersey Law, Sub I shall be merged with and into the Company, the separate corporate existence of Sub I shall cease, and the Company shall continue as the surviving corporation and as a wholly-owned subsidiary of Parent. The surviving corporation after the First Step Merger is hereinafter referred to as the “ Interim Surviving Corporation .” As soon as practicable after the Effective Time, but in any event within three (3) Business Days after the Effective Time, and subject to and upon the terms and conditions of this Agreement and the applicable provisions of New Jersey Law and The Delaware Limited Liability Company Act (the “ LLC Act ”), the Interim Surviving Corporation shall be merged with and into Sub II, the separate corporate existence of the Interim Surviving Corporation shall cease, and Sub II shall continue as the surviving entity and as a wholly-owned subsidiary of Parent. The surviving entity after the Second Step Merger is hereinafter referred to as the “ Final Surviving Entity .”

     1.2 Effective Time .  Unless this Agreement is earlier terminated pursuant to Section 8.1 hereof, the closing of the First Step Merger (the “ Closing ”) will take place as promptly as practicable after the execution and delivery hereof by the parties hereto, and following satisfaction or waiver of the conditions set forth in Article VI hereof, at the offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, 1301 Avenue of the Americas, 40th Floor, New York, New York, unless another time or place is mutually agreed upon in writing by Parent and the Company. The date upon which the Closing actually occurs shall be referred to herein as the “ Closing Date .” On the Closing Date, the parties hereto shall cause the First Step Merger to be consummated by filing a Certificate of Merger in substantially the form attached hereto as Exhibit C-1 , with the Department of Treasury, Division of Revenue of the State of New Jersey (the “ Certificate of Merger ”), in accordance with the applicable provisions of New Jersey Law (the time of the acceptance of such filing by the Department of Treasury, Division of Revenue of the State of New Jersey shall be referred to herein as the “ Effective Time ”). As soon as practicable after the Effective Time, but in any event within three (3) Business Days after the Effective Time, Parent shall cause the Second Step Merger to be consummated by filing (i) a Certificate of Merger in substantially the form

attached hereto as Exhibit C-2 with the Secretary of State of the State of Delaware (the “ Delaware Second Step Certificate of Merger ”), and (ii) a Certificate of Merger in substantially the form attached hereto as Exhibit C-3 with the Department of Treasury, Division of Revenue of the State of New Jersey (the “ New Jersey Second Step Certificate of Merger ”), each in accordance with the applicable provisions of New Jersey Law and the LLC Act.

     1.3 Effect of the First Step Merger and the Second Step Merger.   At the Effective Time, the effect of the First Step Merger shall be as provided in the applicable provisions of New Jersey Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, except as otherwise agreed to pursuant to the terms of this Agreement, all of the property, rights, privileges, powers and franchises of the Company and Sub I shall vest in the Interim Surviving Corporation, and all debts, liabilities and duties of the Company and Sub I shall become the debts, liabilities and duties of the Interim Surviving Corporation. At the effective time of the Second Step Merger, the effect of the Second Step Merger shall be as provided in the applicable provisions of New Jersey Law and the LLC Act. Without limiting the generality of the foregoing, and subject thereto, at the effective time of the Second Step Merger, except as otherwise agreed to pursuant to the terms of this Agreement, all of the property, rights, privileges, powers and franchises of the Interim Surviving Corporation shall vest in Sub II as the surviving entity in the Second Step Merger, and all debts, liabilities and duties of the Interim Surviving Corporation shall become the debts, liabilities and duties of Sub II as the surviving entity in the Second Step Merger.

     1.4 Formation Documents.

          (a) Unless otherwise determined by Parent prior to the Effective Time, the certificate of incorporation of the Interim Surviving Corporation shall be amended and restated as of the Effective Time to be identical to the certificate of incorporation of Sub I as in effect immediately prior to the Effective Time, until thereafter amended in accordance with New Jersey Law and as provided in such certificate of incorporation; provided , however , that at the Effective Time, Article I of the certificate of incorporation of the Interim Surviving Corporation shall be amended and restated in its entirety to read as follows: “The name of the corporation is Vanhalen Acquisition, Inc.”

          (b) Unless otherwise determined by Parent prior to the Effective Time, the bylaws of Sub I, as in effect immediately prior to the Effective Time, shall be the bylaws of the Interim Surviving Corporation at the Effective Time until thereafter amended in accordance with New Jersey Law and as provided in the certificate of incorporation of the Interim Surviving Corporation and such bylaws.

          (c) Unless otherwise determined by Parent prior to the Effective Time, the certificate of formation of Sub II as in effect immediately prior to the effective time of the Second Step Merger shall be the certificate of formation of the Final Surviving Entity in the Second Step Merger until thereafter amended in accordance with the LLC Act and as provided in such certificate of formation; provided, however , that at the effective time of the Second Step Merger, Article I of

such certificate of formation shall be amended and restated in its entirety to read as follows: “The name of this limited liability company is Viecore, LLC.”

          (d) Unless otherwise determined by Parent prior to the Effective Time, the Limited Liability Company Agreement of Sub II as in effect immediately prior to the effective time of the Second Step Merger shall be the Limited Liability Company Agreement of the Final Surviving Entity, until thereafter amended in accordance with the LLC Act and as provided in such Limited Liability Company Agreement; provided, however , that at the Effective Time, such Limited Liability Company Agreement shall be amended and restated in its entirety to read as follows: “The name of this limited liability company is Viecore, LLC.”

     1.5 Management . 

          (a) Directors/Managers of Company . Unless otherwise determined by Parent prior to the Effective Time, the directors of Sub I immediately prior to the Effective Time shall be the directors of the Interim Surviving Corporation immediately after the Effective Time and the managers of the Final Surviving Entity immediately after the effective time of the Second Step Merger, each to hold the office of a director/manager of the Interim Surviving Corporation and the Final Surviving Entity, respectively, in accordance with the provisions of New Jersey Law and the certificate of incorporation and bylaws of the Interim Surviving Corporation and the LLC Act and the Certificate of Formation of the Final Surviving Entity until their successors are duly elected and qualified.

          (b) Officers of Company . Unless otherwise determined by Parent prior to the Effective Time, the officers of Sub I immediately prior to the Effective Time shall be the officers of the Interim Surviving Corporation immediately after the Effective Time and the officers of the Final Surviving Entity after the effective time of the Second Step Merger, each to hold office in accordance with the provisions of the bylaws of the Interim Surviving Corporation and the Limited Liability Company Agreement of the Final Surviving Entity.

     1.6 Definitions .  For all purposes of this Agreement, the following terms shall have the following respective meanings:

               (i) “ Accredited Value Per Share ” shall mean (A) the number of shares (or fraction of a share) of Parent Common Stock received by an Accredited Shareholder in exchange for one share of Company Common Stock pursuant to Section 1. 7(a)(ii) hereof but excluding any shares constituting the Equity Holdback Parent Amount and the Parent Escrow Equity Holdback Amount (calculated as if, in all events, the Registration Time Sale is elected) in respect of such share of Company Common Stock, multiplied by (B) the Registration Price.

               (ii) “ Action ” shall mean any action, suit, arbitration, order, injunction, or proceeding of any nature.

               (iii) “ Additional Common Stock ” shall mean the additional Company Common Stock deemed issued immediately prior to the Effective Time to holders of Class A Preferred Stock pursuant to Section 1. 7(e) hereof.

               (iv) “ Affiliate ” shall mean, with respect to any person, another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person.

               (v) “ Aggregate Exercise Value ” shall mean the aggregate amount necessary to exercise all Company In the Money Options.

               (vi) “ Aggregate Liquidation Value ” shall mean the Class A Liquidation Value, plus the Class B Liquidation Value.

               (vii) “ Bonus Payment ” shall mean an aggregate of $7,500,000 payable immediately prior to the Closing to Continuing Employees set forth on a schedule prepared by the Company after consultation with Parent.

               (viii) “ Business Day[s] ” shall mean each day that is not a Saturday, Sunday or holiday on which banking institutions located in New York, New York are authorized or obligated by law or executive order to close.

               (ix) “ Cash Consideration ” shall mean $9,500,000, less the amount of Third Party Expenses set forth on the Statement of Expenses.

               (x) “ Cash Holdback ” shall mean the amount of cash that the Accredited Shareholders would be entitled to receive in exchange for the shares of Company Common Stock held by such Accredited Shareholders at the Effective Time pursuant to Section 1. 7(a) hereof.

               (xi) “ Charter Amendment ” shall have the meaning set forth in Section 5.18 hereof.

               (xii) “ Class A Aggregate Liquidation Value ” shall mean the Class A Liquidation Value payable on each share of Class A Preferred Stock, multiplied by the number of shares of Class A Preferred Stock outstanding immediately prior to the Effective Time.

               (xiii) “ Class A Liquidation Value ” shall mean the Liquidation Value per share of the Class A Preferred Stock as provided in the Company Charter in effect immediately prior to the Effective Time.

               (xiv) “ Class A Preferred Stock ” shall mean shares of Class A Preferred Stock, par value $1,000.00 per share, of the Company.

               (xv) “ Class B Aggregate Liquidation Value ” shall mean the Class B Liquidation Value, payable on each share of Class B Preferred Stock, multiplied by the number of shares of Class B Preferred Stock outstanding immediately prior to the Effective Time.

               (xvi) “ Class B Liquidation Value ” shall mean the Liquidation Value per share of the Class B Preferred Stock as provided in the Company Charter in effect immediately prior to the Effective Time.

               (xvii) “ Class B Preferred Stock ” shall mean shares of Class B Preferred Stock, par value $0.001 per share, of the Company.

               (xviii) “ Common Aggregate Value ” shall mean the Merger Consideration, less the Aggregate Liquidation Value (if such difference results in a negative number, such result shall be deemed to be $0).

               (xix) “ Common Value Per Share ” shall mean (1) the Common Aggregate Value, plus the Aggregate Exercise Value, divided by (2) the Company Common Stock Deemed Outstanding.

               (xx) “ Company Capital Stock ” shall mean the Company Common Stock, the Company Preferred Stock and any other shares of capital stock, if any, of the Company, taken together.

               (xxi) “ Company Charter ” shall mean the Company’s Amended and Restated Certificate of Incorporation as in effect at the Effective Time.

               (xxii) “ Company Common Stock ” shall mean shares of common stock, par value $0.001 per share, of the Company.

               (xxiii) “ Company Common Stock Deemed Outstanding ” shall mean the number of shares of Company Common Stock outstanding immediately prior to the Effective Time, including the shares of (1) Additional Common Stock deemed issued immediately prior to the Effective Time to holders of Class A Preferred Stock pursuant to Section 1. 7(e) hereof, and (2) Common Stock underlying the Company In the Money Options.

               (xxiv) “ Company In the Money Option ” shall mean a Company Vested Option, which, if exercised prior to (or upon) the Effective Time, would have an exercise price per share less than the Common Value Per Share, calculated iteratively, and assuming each Company Option with the same exercise price is exercised simultaneously.

               (xxv) “ Company Material Adverse Effect ” shall mean any change, event or effect that is materially adverse to the business, assets (whether tangible or intangible), financial condition, results of operations or capitalization of the Company and Company Subsidiaries, taken as a whole; provided, however , that the term Company Material Adverse Effect shall not include (i)

any change, event or effect relating to the industry or markets in which the Company and the Company Subsidiaries operate, (ii) any adverse change that results from economic, regulatory, political conditions generally or acts of terrorism or war (other in the case of (i) or (ii) than those that have had a materially disproportionate adverse affect relative to other industry participants on the Company and the Company Subsidiaries taken as a whole), (iii) any changes, events or circumstances, conditions or effects resulting from the announcement or pendency of this Agreement including actions of competitors or any delays or cancellations for services or losses of employees or customers, (iv) any changes in GAAP or Laws or the interpretation thereof, (v) any changes resulting from the payment of the Bonus Payment, (vi) any failure, in and of itself, by the Company to meet any forecast or projection or (vi) any action taken pursuant to the specific terms of this Agreement or at the written request of Parent or either Sub.

               (xxvi) “ Company Options ” shall mean all issued and outstanding options (including commitments to grant options) to purchase or otherwise acquire Company Common Stock (whether or not vested) held by any person or entity, each of whom are listed on Section 2. 2(b) of the Disclosure Schedule.

               (xxvii) “ Company Preferred Stock ” shall mean shares of Class A Preferred Stock and Class B Preferred Stock.

               (xxviii) “ Company Subsidiary ” shall mean each of (1) Viecore Federal Systems Division, Inc., a Delaware corporation, (2) Viecore Acquisition, L.L.C., a Delaware Limited Liability Company, (3) Viecore Pty Limited.

               (xxix) “ Company Vested Options ” shall mean all Company Options that are vested (and have not been exercised) immediately prior to the Effective Time.

               (xxx) “ Contingent Additional Cash Consideration ” shall mean an amount of cash equal to (1) $61,500,000, less (2) the Equity Consideration multiplied by the Registration Price (if such difference results in a negative number, such result shall be deemed to be $0).

               (xxxi) “ Contingent Cash Consideration ” shall mean an amount of cash equal to (1) one (1) less the Escrow Shares Percentage, multiplied by the Contingent Additional Cash Consideration, if any, plus (2) the lesser of (A) the Equity Consideration Net Value, less the Registration Consideration Value (if such difference results in a negative number, such result shall be deemed to be $0), and (B) $13,582,500.

               (xxxii) “ Contingent Cash Escrow Amount ” shall mean:

                    (1) With respect to a Registration Time Sale, an amount of cash equal to the (A) lesser of (x) the Escrow Amount, less the Registration Escrow Value (if such difference results in a negative number, such result shall be deemed to be $0), and (y) $1,792,500, plus (B) an amount of cash equal to the Escrow Shares Percentage, multiplied by the Contingent Additional Cash Consideration; or

                    (2) With respect to a Survival Date Sale, an amount of cash equal to the Remaining Escrow Percentage, multiplied by the lesser of (A) the Escrow Amount, less the Survival Escrow Value (if such difference results in a negative number, such result shall be deemed to be $0), and (B) $1,792,500.

               (xxxiii) “ Contract ” shall mean any written or oral agreement, contract, subcontract, lease, binding understanding, instrument, note, bond, mortgage, hypothec, indenture, option (other than Company Options), warranty (other than a warranty within a Contract), purchase order, license, sublicense, benefit plan, obligation, power of attorney or other agreement, permit, concession, franchise, commitment, or undertaking of any nature.

               (xxxiv) “ Environmental Laws ” means all Laws relating to pollution or protection of the environment or exposure of any individual to Hazardous Materials, including laws and regulations relating to emissions, discharges, releases or threatened releases of Hazardous Materials, or otherwise relating to the manufacture, processing, registration, distribution, labeling, recycling, use, treatment, storage, disposal, transport or handling of Hazardous Materials and including any Hazardous Materials related electronic waste, product content or product take-back requirements.

               (xxxv) “ Equity Consideration ” shall mean a number of shares of Parent Common Stock equal to (1) the Equity Consideration Value, divided by (2) the Signing Price, and rounded down to the nearest whole share.

               (xxxvi) “ Equity Consideration Net Value ” shall mean $90,550,000.

               (xxxvii) “ Equity Consideration Value ” shall mean $102,500,000.

               (xxxviii) “ Equity Holdback ” shall mean the number of shares of Parent Common Stock equal to (1) $6,791,250, divided by (2) the Signing Price.

               (xxxix) “ Equity Holdback Company Amount ” shall mean the number of shares of Parent Common Stock equal to the Equity Holdback, less the Equity Holdback Parent Amount.

               (xl) “ Equity Holdback Parent Amount ” shall mean the number of shares of Parent Common Stock equal to (1) the lesser of (A) the Registration Consideration Value, less the Equity Consideration Net Value (if such difference results in a negative number, such result shall be deemed to be $0), and (B) $6,791,250, divided by (2) the Registration Price.

               (xli) “ Escrow Amount ” shall mean $11,950,000.

               (xlii) “ Escrow Shares ” shall mean the Escrow Amount, divided by the Signing Price.

               (xliii) “ Escrow Shares Percentage ” shall mean the Escrow Shares, divided by the Equity Consideration.

               (xliv) “ GAAP ” shall mean United States generally accepted accounting principles consistently applied.

               (xlv) “ Hazardous Materials ” means chemicals, pollutants, contaminants, wastes, toxic substances, radioactive and biological materials, asbestos-containing materials (ACM), hazardous substances, petroleum and petroleum products or any fraction thereof.

               (xlvi) “ Knowledge ” or “ Known ” or words of similar import shall mean, with respect to the Company or the Company Subsidiaries, the knowledge of Thomas J. Chisholm, Thomas F. Brown IV, Michelle L. Giambalvo, Scott Ferguson, Tony Lorenzen and Jack Gumbert.

               (xlvii) “ Laws ” shall mean any national, federal, state, local or foreign law, rule, regulation, statute, ordinance, order, judgment, decree, permit, license, or other governmental restriction or requirement of any kind.

               (xlviii) “ Lien ” shall mean any lien, pledge, charge, claim, mortgage, security interest or other encumbrance of any sort other than (i) statutory liens for Taxes (as defined herein) not yet due or that remain payable without penalty; (ii) Liens for Taxes being contested in good faith by proper proceedings and for which the Company has established and maintained adequate reserves in accordance with GAAP, and (iii) Liens immaterial in nature and amount.

               (xlix) “ Merger Consideration ” shall mean the Cash Consideration plus the Equity Consideration Value.

               (l) “ Optionholder ” shall mean any person holding Company Options.

               (li) “ Parent Common Stock ” shall mean the common stock, par value $0.001 per share, of Parent.

               (lii) “ Parent Cure Notice ” shall have the meaning set forth in Section 8.2 hereof.

               (liii) “ Parent Escrow Equity Holdback Amount ” shall mean:

                    (1) with respect to a Registration Time Sale, a number of shares of Parent Common Stock equal to (A) the lesser of (x) the Registration Escrow Value, less the Escrow Amount (if such difference results in a negative number, such result shall be deemed to be $0), and (y) $896,250, divided by (B) the Registration Price; or

                    (2) with respect to a Survival Date Sale, a number of shares of Parent Common Stock equal to the Remaining Escrow Percentage multiplied by (A) the lesser of

(x) the Survival Escrow Value less the Escrow Amount (if such difference results in a negative number, such result shall be deemed to be $0), and (y) $896,250, divided by (B) the Survival Price.

               (liv) “ Parent Material Adverse Effect ” shall mean any change, event or effect that is materially adverse to the business, assets (whether tangible or intangible), financial condition, results of operations or capitalization of Parent and any subsidiaries, taken as a whole; provided, however , that the term Parent Material Adverse Effect shall not include (i) any change, event or effect relating to the industry or markets in which the Parent and any of its subsidiaries operate, (ii) any adverse change that results from economic, regulatory, political conditions generally or acts of terrorism or war (other in the case of (i) or (ii) than those that have had a materially disproportionate adverse affect relative to other industry participants on the Parent and any of its subsidiaries taken as a whole), (iii) any changes, events or circumstances, conditions or effects resulting from the announcement or pendency of this Agreement including actions of competitors or any delays or cancellations for services or losses of employees or customers, (iv) any changes in GAAP or Laws or the interpretation thereof, (v) any action taken pursuant to the specific terms of this Agreement or at the written request of the Company or the Shareholder Representative, or (vi) any decrease in either the trading volume or trading prices of the Parent Common Stock, in and of itself.

               (lv) “ Parent Restricted Stock Units ” shall mean an award of restricted stock units of Parent having a vesting schedule in accordance with Parent’s customary practices.

               (lvi) “ person ” shall mean shall mean any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity (as defined in Section 2.6 hereof).

               (lvii) “ Plan ” shall mean the Company’s 2000 Equity Incentive Plan.

               (lviii) “ Principal Shareholders ” shall mean the Shareholders listed on Schedule 1.6(lviii) hereto and who are also sometimes referred to herein as “ Accredited Shareholders ”.

               (lix) “ Pro Rata Portion ” shall mean for each Principal Shareholder, an amount of Parent Common Stock equal to the Escrow Shares, multiplied by the proportion that the consideration paid to such Principal Shareholder under Section 1. 7(a)(ii)(2) hereof bears to the total consideration paid to all Principal Shareholders under Section 1. 7(a)(ii)(2) hereof.

               (lx) “ Registration Consideration Value ” shall mean (1) the Equity Consideration less the Escrow Shares, multiplied by (2) the Registration Price.

               (lxi) “ Registration Date ” shall mean the date on which the Registration Time occurs.

               (lxii) “ Registration Escrow Value ” shall mean (1) the Escrow Shares, multiplied by (2) the Registration Price.

               (lxiii) “ Registration Price ” shall mean the volume weighted average price of the Parent Common Stock on the Registration Date.

               (lxiv) “ Registration Time ” shall mean the time on which the SEC declares the Shareholder Registration Statement to be, or the Shareholder Registration Statement shall automatically become, effective, subject to Section 9.2 hereof.

               (lxv) “ Related Agreements ” shall mean the Certificate of Merger, the Second Step New Jersey Certificate of Merger, the Second Step Delaware Certificate of Merger, the Voting Agreements and the Employee Proprietary Information, Inventions and Non-Competition Agreements.

               (lxvi) “ Remaining Escrow Percentage ” shall mean, as of the Survival Date, the number of shares held in the Escrow Fund, divided by the Escrow Shares.

               (lxvii) “ SAS-100 ” shall mean Statement of Auditing Standards No. 100.

               (lxviii) “ SEC ” shall mean the United States Securities and Exchange Commission.

               (lxix) “ Securities Act ” shall mean the Securities Act of 1933, as amended.

               (lxx) “ Shareholder ” shall mean any holder of any Company Capital Stock immediately prior to the Effective Time each of whom is listed on Section 2. 2(a) of the Disclosure Schedule, as updated pursuant to Section 5.16 hereof.

               (lxxi) “ Signing Price ” shall mean $20.43 (reflecting the average of the reported closing price of the Parent Common Stock for the five (5) Business Days prior to the date of this Agreement).

               (lxxii) “ Statement of Expenses ” shall have the meaning set forth in Section 5.4 hereof.

               (lxxiii) “ Subsidiary ” shall mean any corporation more than fifty percent (50%) of whose outstanding voting securities, or any partnership, limited liability company, joint venture or other entity more than fifty percent (50%) of whose total equity interest, is directly or indirectly owned by Parent or the Company, as the case may be.

               (lxxiv) “ Survival Escrow Value ” shall mean (1) the Escrow Shares, multiplied by (2) the Survival Price.

               (lxxv) “ Survival Price ” shall mean the average of the reported closing price per share of the Parent Common Stock for the five (5) Business Days prior to the Survival Date.

               (lxxvi) “ Third Party Expenses ” shall have the meaning set forth in Section 5.4 hereof.

               (lxxvii) “ Unaccredited Shareholder ” shall mean any Shareholder other than the Principal Shareholders.

     1.7 Effect of First Step Merger on the Capital Stock of the Constituent Corporations . 

          (a) Effect on Capital Stock; Form of Payment of Consideration .

               (i)  Effect on Capital Stock . At the Effective Time, by virtue of the First Step Merger and without any action on the part of Sub I, the Company or the holders of shares of the Company Capital Stock, each outstanding share of Company Capital Stock, (including any Additional Common Stock deemed issued pursuant to Section 1. 7(e) hereof) (excluding, for the avoidance of doubt, unexercised Company Options) issued and outstanding immediately prior to the Effective Time (and subject to the escrow provisions contained herein), upon the terms and subject to the conditions set forth in this Section 1.7 (including the escrow and holdback provisions of Section 1.7(b) hereof) and throughout this Agreement, upon surrender of the certificate representing such shares of Company Capital Stock in the manner provided in Section 1.9 hereof, will be cancelled and extinguished and be converted automatically into the amounts set forth below:

                    (1) Each outstanding share of Class B Preferred Stock will be converted automatically into the right to receive the Class B Liquidation Value.

                    (2) Each outstanding share of Class A Preferred Stock (excluding the shares of Additional Common Stock deemed issued pursuant to Section 1. 7(e) hereof) will be converted automatically into the right to receive the Class A Liquidation Value.

                    (3) Each outstanding share of Company Common Stock (including any shares of Additional Common Stock deemed issued pursuant to Section 1. 7(e) hereof) will be converted automatically into the right to receive the Common Value Per Share.

               (ii)  Form of Payment of Consideration . Payment of the amounts set forth in Section 1. 7(a)(i) hereof shall be effectuated as follows:

                    (1) Each Unaccredited Shareholder (excluding for the avoidance of doubt the In the Money Optionholders) shall receive the amounts to which such Unaccredited Shareholder is entitled pursuant to Section 1. 7(a)(i) hereof solely in cash (the aggregate of such amount, the “ Aggregate Unaccredited Cash Consideration ,” and the difference between the Cash Consideration and the sum of the Aggregate Unaccredited Cash Consideration and the Option Merger Consideration, the “ Cash Consideration Balance ”).

                    (2) The Equity Consideration and the Cash Consideration Balance shall be distributed to each Shareholder other than the Unaccredited Shareholders (the “ Accredited Shareholders ”) in satisfaction of the amounts to which each Accredited Shareholder is entitled under Section 1. 7(a)(i) hereof. The amount of Equity Consideration and Cash Consideration Balance that each Accredited Shareholder shall receive shall be in the same proportion that the dollar value to which such Accredited Shareholder is entitled under Section 1. 7(a)(i) hereof (assuming for this purpose, each share of Parent Common Stock has a value equal to the Signing Price) bears to the total dollar value to which all Accredited Shareholders are entitled under Section 1. 7(a)(i) hereof (assuming for this purpose, each share of Parent Common Stock has a value equal to the Signing Price). In no event, for purposes of this Section, however, will an Accredited Shareholder receive consideration in excess of the amount to which such Accredited Shareholder is entitled under Section 1. 7(a)(i) hereof (assuming for this purpose, each share of Parent Common Stock has a value equal to the Signing Price).

                    (3) In accordance with the Charter Amendment that will take effect prior to the Effective Time, the value of any share of Parent Common Stock received pursuant to Section 1. 7(a) hereof shall be deemed to equal the Signing Price for purposes of determining whether the liquidation preferences for the Class A Preferred Stock and Class B Preferred Stock have been satisfied.

               (b)  Reduction for Escrow Amount, Equity Holdback, and Cash Holdback .

                    (i)  Reduction for Escrow Amount . Each distribution made to a Principal Shareholder pursuant to Section 1. 7(a) hereof shall be reduced by such Principal Shareholder’s Pro Rata Portion, and such Principal Shareholder’s Pro Rata Portion shall be deposited in the Escrow Fund as provided herein.

                    (ii)  Reduction for Equity Holdback . Each distribution of Parent Common Stock required to be made to an Accredited Shareholder pursuant to Section 1. 7(a) hereof shall initially be reduced by an amount of shares equal to the proportion that the number of shares of Parent Common Stock to which such Accredited Shareholder is entitled under Section 1. 7(a)(i) hereof bears to the total number of shares of Parent Common Stock to which all Accredited Shareholders are entitled under Section 1. 7(a)(i) hereof (without regard to the Escrow Shares), multiplied by the Equity Holdback (the “ Equity Holdback Shares ”). The Equity Holdback shall be held in trust by Parent until the Registration Time, at which time the Accredited Shareholders shall automatically be entitled to receive all, none or a portion of the Equity Holdback in accordance with Section 1. 7(c)(ii) hereof.

                    (iii)  Reduction for Cash Holdback . Each distribution of cash required to be made to an Accredited Shareholder with respect to the shares of Company Common Stock held by such Accredited Shareholder prior to the Effective Time pursuant to Section 1. 7(a) hereof shall initially be withheld and in the aggregate shall constitute the Cash Holdback. The Cash Holdback shall be held in trust by Parent until the Registration Time, at which time such Accredited

Shareholders shall automatically be entitled to receive all, none or a portion of the Cash Holdback in accordance with Section 1.7(c)(iii) hereof.

          (c)  Subsequent Adjustment .

               (i)  Contingent Cash Consideration . At the Registration Time, if the Equity Consideration Net Value is greater than or equal to the Registration Consideration Value, each Shareholder entitled to receive Parent Common Stock pursuant to Section 1. 7(a) hereof at the Closing, shall automatically be entitled to receive, and shall receive, as soon as reasonably practicable (1) such Shareholder’s share, if any, of the Equity Holdback previously reduced from such holder’s payment at the Closing pursuant to Section 1. 7(b)(ii) hereof, and (2) a portion of the Contingent Cash Consideration, equal to: (A) the Contingent Cash Consideration, multiplied by (B) a fraction, (x) the numerator of which is the number of shares of Parent Common Stock such Shareholder is entitled to receive pursuant to Section 1. 7(a) hereof (including any Equity Holdback, but excluding any shares of Parent Common Stock placed in the Escrow Fund on such Shareholder’s behalf) and (y) the denominator of which is the total shares of Parent Common Stock that all the Shareholders are entitled as of the Closing to receive pursuant to Section 1. 7(a) hereof in the Merger (including the Equity Holdback but excluding any shares of Parent Common Stock placed in the Escrow Fund).

               (ii)  Equity Holdback . At the Registration Time, if the Equity Consideration Net Value is less than the Registration Consideration Value, (1) Parent shall permanently retain, and no Shareholder shall have further rights whatsoever to, the Equity Holdback Parent Amount, if any, and (2) each Accredited Shareholder, shall automatically be entitled to receive and shall receive, as soon as reasonably practicable the proportion of the Equity Holdback Company Amount, if any, as equal to the portion of the Equity Holdback withheld on behalf of such Shareholder pursuant to Section 1. 7(b)(ii) hereof.

               (iii)  Cash Holdback . At the Registration Time, if the Equity Consideration multiplied by the Registration Price is less than or equal to $110,187,500, the Cash Holdback shall be distributed as soon as reasonably practicable after the Registration Date to the Accredited Shareholders that contributed to the Cash Holdback in the same amounts in which the contributions to the Cash Holdback initially were made pursuant to Section 1. 7(b)(iii) hereof. At the Registration Time, if the Equity Consideration multiplied by the Registration Price exceeds $110,187,500:

                    (1) (x) and the Accredited Value Per Share is greater than the Common Value Per Share, each Unaccredited Shareholder and each In the Money Optionholder holding Company Common Stock Deemed Outstanding as of the Effective Time shall be entitled to the right to receive and, shall receive as promptly as practicable but in any event no later than three (3) Business Days after such date (in addition to the Common Value Per Share or Option Merger Consideration, as applicable), in respect of each share of Company Common Stock Deemed Outstanding as of the Effective Time held by such Unaccredited Shareholder and such In the

Money Optionholder, a portion of the Cash Holdback equal to (A) the Accredited Value Per Share, less (B) the Common Value Per Share.

                         (y) and the Accredited Value Per Share is less than the Common Value Per Share, each Accredited Shareholder holding Company Common Stock Deemed Outstanding as of the Effective Time shall be entitled to the right to receive, and shall receive as promptly as practicable but in any event no later than three (3) Business Days after such date, in respect of each share of Company Common Stock Deemed Outstanding as of the Effective Time held by such Accredited Shareholder, a portion of the Cash Holdback equal to (A) Common Value Per Share, less (B) the Accredited Value Per Share.

                    (2) After payment to the Unaccredited Shareholders and the In the Money Optionholders pursuant to Section 1. 7(c)(iii)(1)(x) hereof or after payment to the Accredited Shareholders holding Company Common Stock pursuant to Section 1. 7(c)(iii)(1)(y) , the amount of cash remaining in the Cash Holdback (the “ Cash Holdback Balance ”) shall be allocated such that each holder of Company Common Stock Deemed Outstanding as of the Effective Time becomes entitled to the right to receive on or following the Registration Time, in respect of each share of Company Common Stock Deemed Outstanding as of the Effective Time held by each such Shareholder, an amount of cash equal to: (A) the Cash Holdback Balance, divided by (B) the Company Common Stock Deemed Outstanding.

               (iv)  Issuance of Parent Common Stock . In the event Parent Common Stock is to be distributed pursuant to this Section 1.7(c) , Parent shall cause its Transfer Agent to issue such Common Stock in accordance with this Section 1. 7(c) as promptly as practicable.

          (d) Treatment of Company Options .

               (i) No Company Option shall be assumed by Parent, and each outstanding Company Option shall be canceled or terminated at the Effective Time (without regard to the exercise price thereof).

               (ii) Immediately prior to the Effective Time, and conditioned on the consummation of the Merger, each Company Option shall be cancelled and each holder of a Company In the Money Option shall automatically (without any further action required of such holder) be entitled to a cash payment equal to the product of (1) the number of shares of Company Common Stock underlying all Company In the Money Options held by such holder immediately prior to the Effective Time, multiplied by (2) the Common Value Per Share, and minus (3) the aggregate amount necessary to exercise all of the Company In the Money Options held by such holder (the “ Option Merger Consideration ”). At the same time the Company distributes the Notice Materials pursuant to Section 5. 1(a) hereof, the Company shall provide to each holder of any Company In the Money Option an informational notice describing the treatment of Company Options pursuant to this Section 1.7 . Parent shall make the cash payment required pursuant to the foregoing provisions of this Section 1. 7(d)(ii) to each holder of Company In the Money Options as promptly as reasonably practicable after the Closing. The payment of the Option Merger

Consideration to a Company Optionholder shall be reduced by any income or employment tax withholding required under the Code or any provision of state, local or foreign tax law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Company Optionholder.

               (iii) Prior to the Effective Time, and subject to the reasonable review and approval of Parent, the Company shall have taken all actions necessary to effect the transactions anticipated by this Section 1. 7(d) under the Plan, all Company Option agreements, and any other plan or arrangement of the Company (whether written or oral, formal or informal), including delivering all required notices (the “ Optionholder Notices ”) and obtaining any required consents necessary to effectuate the provisions of this Agreement.

          (e) Deemed Issue of Additional Common Stock . Immediately prior to the Effective Time and in lieu of the actual issuance of such shares upon redemption of the Class A Preferred Stock in accordance with the Company Charter, 56.1165 shares of Common Stock shall be deemed to have been issued with respect to each share of Class A Preferred Stock that is outstanding immediately prior to the Effective Time (the “ Additional Common Stock ”). Upon the deemed issuance of the Additional Common Stock, such shares of Additional Common Stock outstanding immediately prior to the Effective Time shall be considered outstanding Company Common Stock immediately prior to the Effective Time.

          (f) No Fractional Shares . No fraction of a share of Parent Common Stock will be issued pursuant to the Merger, but in lieu thereof, each Shareholder who would otherwise be entitled to a fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock to be received by such Shareholder) shall receive from Parent an amount of cash (rounded to the nearest whole cent) equal to the product of (i) such fraction, multiplied by (ii) the Signing Price. Notwithstanding anything in this Section 1.7 to the contrary, in no event shall Parent be obligated to distribute in the aggregate shares of Parent Common Stock in excess of the Equity Consideration or, subject to Section 1.7(c) of this Agreement, cash in excess of the Cash Consideration.

          (g) Withholding Taxes . Notwithstanding any other provision in this Agreement, Parent, the Company, the Subs, the Escrow Agent, and the Exchange and Paying Agent (as defined in Section 1.9(a) hereof) shall have the right to deduct and withhold Taxes (as defined in Section 2.10(a) hereof) from any payments to be made hereunder if such withholding is required by law and to request any necessary Tax forms, including Form W-9 or the appropriate series of Form W-8, as applicable, or any similar information, from the Shareholders and any other recipients of payments hereunder. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been delivered and paid to the Shareholder or other recipient of payments in respect of which such deduction and withholding was made.

          (h) Capital Stock of Subs . Each share of Common Stock of Sub I issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of Common Stock of the Interim Surviving

Corporation. Each stock certificate of Sub I evidencing ownership of any such shares shall continue to evidence ownership of such shares of capital stock of the Interim Surviving Corporation. Each share of Common Stock of the Interim Surviving Corporation issued and outstanding immediately after the Effective Time shall be converted into and exchanged for the applicable corresponding interest of the Final Surviving Entity. Each stock certificate of the Interim Surviving Corporation evidencing ownership of any such shares shall continue to evidence the applicable corresponding interest in the Final Surviving Entity.

     1.8 Dissenting Shares. (a)   No holder of Company Capital Stock or Company Options shall be entitled to any dissenters’, appraisal or similar rights under New Jersey Law or otherwise in connection with the merger.

     1.9 Surrender of Certificates . 

          (a) Exchange and Paying Agent . Parent, or an institution selected by Parent, shall serve as the exchange and paying agent (Parent in such capacity, or such institution, the “ Exchange and Paying Agent ”) for the Merger.

          (b) Parent to Provide Cash and Parent Common Stock . Subject to the provisions of Section 7.3 hereof relating to escrow arrangements, as promptly as practicable after the Effective Time but in no event later than the earlier to occur of six (6) days after the Effective Time and the Registration Date, Parent shall make available to the Exchange and Paying Agent for exchange in accordance with this Article I the shares of Parent Common Stock issuable and the cash payable at the Effective Time pursuant to Section 1.7 hereof in exchange for outstanding shares of Company Capital Stock; provided, however, Parent shall deposit into the Escrow Fund (as defined in Section 7.3(a) hereof), out of the aggregate number of shares of Parent Common Stock otherwise deliverable to the Principal Shareholders pursuant to Section 1.7 hereof, each Principal Shareholder’s Pro Rata Portion, contributed with respect to each Principal Shareholder in accordance with Section 1.7(b) hereof, and shall retain and hold in trust on behalf of each Accredited Shareholder, the Equity Holdback in accordance with Section 1.7(c)(ii) hereof and the Cash Holdback in accordance with Section   1.7(c)(iii) hereof.

          (c) Exchange Procedures .

               (i) Not less than ten (10) days prior to the Closing Date, Parent shall or shall cause the Exchange and Paying Agent to make available a form of letter of transmittal reasonably acceptable to the Company and instructions for use in effecting the surrender of Company Stock Certificates (as defined below). Within two (2) days of receipt of the letter of transmittal, the Company shall mail the letter of transmittal to each Shareholder at the address set forth opposite each such Shareholder’s name on Section 2. 2(a) of the Disclosure Schedule. After receipt of such letter of transmittal, the Shareholders, on or after the Closing, will surrender the certificates representing their shares of Company Capital Stock (the “ Company Stock Certificates ”) to the Exchange and Paying Agent for cancellation together with a duly completed and validly executed letter of transmittal. Upon surrender of a Company Stock Certificate for

cancellation to the Exchange and Paying Agent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, subject to the terms of Section 1. 9(e) hereof, the holder of such Company Stock Certificate shall be entitled to receive from the Exchange and Paying Agent in exchange therefor, the cash amounts and Parent Common Stock to which such holder is entitled pursuant to Section 1.7 hereof (less the Parent Common Stock to be deposited into the Escrow Fund with respect to the Principal Shareholders and the Equity Holdback and Cash Holdback to be held with respect to each Accredited Shareholder), and the Company Stock Certificate so surrendered shall be cancelled. Until so surrendered, each Company Stock Certificate outstanding after the Effective Time will be deemed, for all corporate purposes thereafter, to evidence only the right to receive the cash amounts payable and Parent Common Stock issuable in exchange for shares of Company Capital Stock (without interest) into which such shares of Company Capital Stock shall have been so converted. No portion of the Merger Consideration will be paid to the holder of any unsurrendered Company Stock Certificate with respect to shares of Company Capital Stock formerly represented thereby until the holder of record of such Company Stock Certificate shall surrender such Company Stock Certificate pursuant hereto. Notwithstanding the foregoing, (i) each Shareholder that delivers its duly executed letter of transmittal and such other documents as may reasonably be requested to the Exchange and Paying Agent at least three (3) Business Days prior to the Closing Date shall be paid all cash amounts owed to such Shareholder pursuant to Section 1.7 on the Closing Date; and (ii) each Shareholder that delivers its duly executed letter of transmittal and such other documents as may reasonable be requested to the Exchange and Paying Agent after the Closing shall be paid all cash amounts owed to such Shareholder pursuant to Section 1.7 as promptly as practicable after such delivery.

               (ii) Any holder of Class A Preferred Stock who is deemed to have received Additional Common Stock pursuant to Section 1. 7(e) hereof shall be deemed to have submitted Company Stock Certificates representing the Additional Common Stock for the purposes of Section 1. 9(c)(i) hereof, when such holder of Class A Preferred Stock properly submits such holder’s Company Stock Certificates representing their shares of Class A Preferred Stock.

          (d) Distributions With Respect to Unexchanged Shares . No dividends or other distributions declared or made after the Effective Time with respect to Parent Common Stock with a record date after the Effective Time will be paid to the holder of any unsurrendered Company Stock Certificate with respect to the shares of Parent Common Stock represented thereby until the holder of record of such Company Stock Certificate shall surrender such Company Stock Certificate. Subject to applicable law, following surrender of any such Company Stock Certificate, there shall be paid to the record holder of the certificates representing whole shares of Parent Common Stock issued in exchange therefor, without interest, at the time of such surrender, the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such whole shares of Parent Common Stock. No interest shall be payable on any cash deliverable upon the exchange of any Company Capital Stock.

          (e) Transfers of Ownership . If any certificate for shares of Parent Common Stock is to be issued in a name other than that in which the Company Stock Certificate surrendered

in exchange therefor is registered, or if any cash amounts are to be disbursed pursuant to Section 1.7 hereof to any person other than the person or entity whose name is reflected on the Company Stock Certificate surrendered in exchange therefor, it will be a condition of the issuance or delivery thereof that the certificate so surrendered will be properly endorsed and otherwise in proper form for transfer and that the person requesting such exchange will have paid to Parent or any agent designated by it any transfer or other taxes required by reason of the issuance of a certificate for shares of Parent Common Stock in any name other than that of the registered holder of the certificate surrendered, or established to the satisfaction of Parent or any agent designated by it that such tax has been paid or is not payable.

          (f) Exchange and Paying Agent to Return Consideration . At any time following the last day of the sixth (6 ^th ) month following the Effective Time, Parent shall be entitled to require the Exchange and Paying Agent to deliver to Parent or its designated successor or assign all cash amounts and shares of Parent Common Stock that have been deposited with the Exchange and Paying Agent pursuant to Section 1.9(b) hereof, and any and all interest thereon or other income or proceeds thereof, not disbursed to the holders of Company Stock Certificates pursuant to Section 1.9(c) hereof, and thereafter the holders of Company Stock Certificates shall be entitled to look only to Parent (subject to the terms of Section 1.9(g) hereof) only as general creditors thereof with respect to any and all amounts that may be payable to such holders of Company Stock Certificates pursuant to Section 1.7 hereof upon the due surrender of such Company Stock Certificates in the manner set forth in Section 1.9(c) hereof.

          (g) No Liability . Notwithstanding anything to the contrary in this Section 1.9 , neither the Exchange and Paying Agent, the Final Surviving Entity, nor any party hereto shall be liable to a holder of shares of Company Capital Stock for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar Law.

     1.10 No Further Ownership Rights in Company Capital Stock .  The cash amounts paid and Parent Common Stock issued in respect of the surrender for exchange of shares of Company Capital Stock in accordance with the terms hereof shall be deemed to be full satisfaction of all rights pertaining to such shares of Company Capital Stock, and there shall be no further registration of transfers on the records of the Final Surviving Entity of shares of Company Capital Stock which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Company Stock Certificates are presented to the Final Surviving Entity for any reason, they shall be canceled and exchanged as provided in this Article I.

     1.11 Lost, Stolen or Destroyed Certificates .  In the event any Company Stock Certificates shall have been lost, stolen or destroyed, the Exchange and 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, such amount, if any, as may be required pursuant to Section 1.7 hereof; provided , however , that Parent may, in its discretion and as a condition precedent to the issuance thereof, require the Shareholder who is the owner of such lost, stolen or destroyed certificates to either (i) deliver a bond in such amount as it may reasonably direct, or (ii) provide an indemnification agreement in a form

and substance acceptable to Parent, against any claim that may be made against Parent or the Exchange and Paying Agent with respect to the certificates alleged to have been lost, stolen or destroyed.

     1.12 Reorganization Status .  The Integrated Merger is intended to constitute a “reorganization” within the meaning of Section 368(a) of the Code. Parent and the Company intend that the First Step Merger and the Second Step Merger will constitute integrated steps in a single “plan of reorganization” within the meaning of Treas. Reg. §1.368-2(g) and §1.368-3, which plan of reorganization the parties adopt by executing this Agreement. None of the parties hereto will take any action that would be reasonably expected to cause the Integrated Merger to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code except as specifically contemplated by this Agreement.

     1.13 Taking of Necessary Action; Further Action .  If at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Final Surviving Entity with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company, Parent, the Subs, and the officers and directors of the Company, Parent and the Subs are fully authorized in the name of their respective corporations or otherwise to take, and will take, all such lawful and necessary action.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company hereby represents and warrants to Parent and the Subs, subject to such exceptions as are specifically disclosed in the disclosure schedule supplied by the Company to Parent (the “ Disclosure Schedule ”) and dated as of the date hereof, on the date hereof and as of the Closing Date, as though made as of the Closing Date, as follows (as used in this Article II , the term “Company” includes the Company Subsidiaries, unless the context clearly otherwise indicates):

     2.1 Organization of the Company .  The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the state of its incorporation. The Company has the corporate power to own its properties and to carry on its business as currently conducted. The Company is duly qualified or licensed to do business and in good standing as a foreign corporation in each jurisdiction in which it conducts business, except for those jurisdictions where failure to be so qualified, licensed or and in good standing would not reasonably be expected to have, individually, or in the aggregate, a Company Material Adverse Effect. The Company and each Company Subsidiary has made available a true and correct copy of its certificate of incorporation and bylaws, or other organizational documents, each as amended to date and in full force and effect on the date hereof (collectively, the “ Charter Documents ”), to Parent. Section 2.1 of the Disclosure Schedule lists the directors and officers of the Company as of the date hereof. The operations now being conducted by the Company are not now and has never been conducted by the Company under any other name. Section 2.1 of the Disclosure Schedule lists (i) each jurisdiction in

which the Company is qualified or licensed to do business, and (ii) every state or foreign jurisdiction in which the Company has employees or facilities.

     2.2 Company Capital Structure . 

          (a) The authorized capital stock of the Company consists of 50,000,000 shares of Common Stock, of which 30,963,006.5 shares are issued and outstanding, and 102,500 shares of Preferred Stock, of which 100,000 shares have been designated Class A Preferred Stock, 60,390 of which are issued and outstanding, and 2,500 shares have been designated Class B Preferred Stock, all of which are issued and outstanding. As of the date hereof, the capitalization of the Company is as set forth in Section 2.2(a) of the Disclosure Schedule. The Company Capital Stock is held by the persons with the record addresses and in the amounts set forth in Section 2.2(a) of the Disclosure Schedule. All outstanding shares of Company Capital Stock are duly authorized, validly issued, fully paid and non-assessable and not subject to preemptive rights created by statute, the Charter Documents of the Company, or any Contract to which the Company is a party or by which it is bound, and have been issued in compliance with federal and state securities laws. All outstanding shares of Company Capital Stock and Company Options have been issued or repurchased (in the case of shares that were outstanding and repurchased by the Company) in compliance with all applicable Laws, including federal and state securities laws. The Company has not, and will not have, suffered or incurred any Liability (contingent or otherwise) or claim, loss, damage, deficiency, cost or expense relating to or arising out of the issuance or repurchase of any Company Capital Stock or options or warrants to purchase Company Capital Stock, or out of any Contract relating thereto (including any amendment of the terms of any such Contract). Except as set forth in Section 2.2(a) of the Disclosure Schedule, there are no declared or accrued but unpaid dividends with respect to any shares of Company Capital Stock. The Company has no capital stock other than the Company Common Stock and the Company Preferred Stock authorized, issued or outstanding. The Company has no Company Capital Stock that is unvested (excluding Common Stock subject to unvested Options).

          (b) Except for the Plan or as set forth on Section 2.2(b) of the Disclosure Schedule, the Company has never adopted, sponsored or maintained any stock option plan or any other plan or Contract providing for equity compensation to any person. The Company has reserved 6,500,000 shares of Company Common Stock for issuance to employees and directors of, and consultants to, the Company upon the issuance of stock or the exercise of options granted under the Plan or any other plan, agreement or arrangement (whether written or oral, formal or informal), of which (i) 4,244,799.5 shares are issuable, as of the date hereof, upon the exercise of outstanding, unexercised options, and (ii) 463,006.5 shares have been issued upon the exercise of options previously granted. The Plan will be terminated effective at the Effective Time, and any Company Options not theretofore exercised will terminate. Except for the Company Options set forth in Section 2.2(b) of the Disclosure Schedule (such schedule to contain, for each holder of Company Options, the name of such holder, the address of such holder, the number of Company Options held by such holder, the amount vested as of the date hereof, the vesting schedule and exercise price of such Company Options, the dates on which such Company Options were granted and will expire,

and whether any Company Options are intended to be incentive stock options under the Code), all of which are to be cancelled at or prior to the Effective Time, there are no options, warrants, calls, rights, convertible securities, Contracts of any character, written or oral, to which the Company is a party or by which the Company is bound obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the Company Capital Stock or obligating the Company to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, or Contract. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to the Company. Except as contemplated hereby, (i) there are no voting trusts, proxies, or other Contracts or understandings to which the Company or any Subsidiary is a party with respect to the voting of any shares of the Company Capital Stock, and (ii) to the Company’s Knowledge there are no voting trusts, proxies, or other Contracts or understandings with respect to the voting of any shares of the Company Capital Stock. Except as set forth on Section 2.2 of the Disclosure Schedule, there are no Contracts to which the Company is a party relating to the registration, sale or transfer (including Contracts relating to rights of first refusal, co-sale rights or “drag-along” rights) of any Company Common Stock. As a result of the First Step Merger, Parent will be the sole record and beneficial holder of all issued and outstanding Company Capital Stock and all rights to acquire or receive any shares of Company Capital Stock, whether or not such shares of Company Capital Stock are outstanding.

     2.3 Subsidiaries .  Except for the Company Subsidiaries, the Company does not have and has never had any Subsidiaries and does not otherwise own and has never otherwise owned any shares of capital stock or any interest in, or control, directly or indirectly, any other corporation, limited liability company, partnership, association, joint venture or other business entity. The Company has not agreed, is not obligated to make, or is not bound by any Contract under which it may become obligated to make any future investment in, or capital contribution to, any other entity. The Company does not directly or indirectly own any equity or similar interest in or any interest convertible, exchangeable or exercisable for any equity or similar interest in, any person.

     2.4 Authority .  The Company has all requisite corporate power and authority to enter into this Agreement and any Related Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby (other than related specifically to the Second Step Merger). The execution and delivery of this Agreement and any Related Agreements to which the Company is a party and the consummation of the transactions contemplated hereby and thereby (other than related specifically to the Second Step Merger) have been duly authorized by all necessary corporate action on the part of the Company and no further action is required on the part of the Company to authorize the Agreement and any Related Agreements to which it is a party and the transactions contemplated hereby and thereby, subject only to the approval of this Agreement by the Shareholders. The vote required to approve this Agreement by the Shareholders is set forth in Section 2.4 of the Disclosure Schedule (the “ Sufficient Shareholder Vote ”). This Agreement and the First Step Merger have been unanimously approved by the Board of Directors of the Company. This Agreement and each of the Related Agreements to which the Company is a party have been duly executed and delivered by the Company and assuming the due authorization, execution and

delivery by the other parties hereto and thereto, constitute the valid and binding obligations of the Company enforceable against it in accordance with their respective terms, except as such enforceability may be subject to the laws of general application relating to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and the relief of debtors and rules of law governing specific performance, injunctive relief, or other equitable remedies.

     2.5 No Conflict .  Except as set forth in Section 2.5 of the Disclosure Schedule, the execution and delivery by the Company of this Agreement and any Related Agreement to which the Company is a party, and the consummation of the transactions contemplated hereby and thereby, will not conflict with or result in any violation of or default under (with or without notice or lapse of time, or both) or give rise to a right of termination, cancellation, modification or acceleration of any obligation or loss of any benefit under (any such event, a “ Conflict ”) (i) any provision of the Charter Documents, (ii) any Contract (other than Contracts immaterial to the Company), or (iii) any material Laws applicable to the Company or any of its properties (whether tangible or intangible) or assets. Section 2.5 of the Disclosure Schedule sets forth all necessary consents, waivers and approvals of parties to any Contracts (other than Contracts immaterial to the Company) as are required thereunder in connection with the Merger, or for any such Contract to remain in full force and effect without limitation, modification or alteration after the Effective Time so as to preserve all rights of, and benefits to, the Company under such Contracts from and after the Effective Time. Following the Effective Time, the Interim Surviving Corporation will be permitted to exercise all of its rights under the Contracts without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which the Company would otherwise be required to pay pursuant to the terms of such Contracts had the transactions contemplated by this Agreement not occurred.

     2.6 Consents .  No material consent, notice, waiver, approval, order or authorization of, or registration, declaration or filing with any court, administrative agency or commission or other federal, state, county, local or other foreign governmental authority, instrumentality, agency or commission (each, a “ Governmental Entity ”), is required by, or with respect to, the Company in connection with the execution and delivery of this Agreement and any Related Agreement to which the Company is a party or the consummation of the transactions contemplated hereby and thereby, except for (i)  the filing of the Certificate of Merger with the Department of Treasury, Division of Revenue, (ii) compliance with the pre-merger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), and under the comparable non-U.S. competition Laws the parties reasonably determine apply, and (iii) the adoption of this Agreement and approval of the transactions contemplated by this Agreement by the Shareholders. The Shareholders are not entitled to any dissenters’, appraisal or similar rights under New Jersey Law or otherwise in connection with the Merger.

     2.7 Company Financial Statements . 

          (a) Section 2.7(a) of the Disclosure Schedule sets forth the Company’s (i) audited balance sheet as of December 31, 2006 (the “ Balance Sheet Date ”) and the related consolidated

statements of income, cash flow and stockholders’ equity for the twelve (12) month period then ended (the “ 2006 Financials ”), (ii) audited balance sheet as of December 31, 2005 and December 31, 2004, and the related consolidated statements of income, cash flow and stockholders’ equity for each of the twelve (12) month periods then ended (the “ 2004 and 2005 Financials ,” and collectively with the 2006 Financials, the “ Year-End Financials ”), and (iii) unaudited balance sheet as of June 30, 2007 and June 30, 2006, and the related unaudited statement of income, cash flow and stockholders’ equity for the six (6) month periods then ended (the “ Interim Financials ”). The Year-End Financials and the Interim Financials (collectively referred to as the “ Financials ”) are true and correct in all material respects and the Financials present fairly in all material respects the Company’s financial condition, and results of operations as of the dates and during the periods indicated therein, subject in the case of the Interim Financials to normal year-end adjustments, which are not material in amount or significance in any individual case or in the aggregate, provided , that, notwithstanding the foregoing, it is agreed and understood that the Financials are subject to restatement as a result of the conclusions of studies related to the Company’s revenue recognition policies. The Company’s consolidated balance sheet as of the Balance Sheet Date is referred to hereinafter as the “ Current Balance Sheet .”

          (b) Any financial statements provided by the Company pursuant to Section 5.15 hereof, when delivered, will (i) have been derived from the books and records of the Company, and (ii) fairly present, in all material respects, the consolidated financial position, results of operations and cash flows of the Company at the dates and for the periods indicated in accordance with GAAP and Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended.

     2.8 No Undisclosed Liabilities .  The Company has no liability, indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement of any type, whether accrued, absolute, contingent, matured, unmatured or other (whether or not required to be reflected in financial statements in accordance with GAAP) (“ Liabilities ”), other than (i) those set forth or adequately provided for in the Company Balance Sheet, (ii) those incurred in the ordinary course of business, consistent with past practice, and not required by GAAP to be set forth in the Company Balance Sheet, or (iii) those incurred in the ordinary course of business since the date of the Company Balance Sheet, or (iv) those that are immaterial, individually and in the aggregate.

     2.9 No Changes .  Since the Balance Sheet Date, there has not been, occurred or arisen any:

          (a) transaction by the Company except in the ordinary course of business as conducted on that date and consistent with past practices;

          (b) amendments or changes to the Charter Documents or other organizational documents other than the Charter Amendment contemplated by this Agreement;

          (c) capital expenditure or commitment by the Company exceeding $100,000 individually or $200,000 in the aggregate;

          (d) payment, discharge or satisfaction, in any amount in excess of $50,000 in any one case, or $100,000 in the aggregate, of any Liabilities of the Company, other than payments, discharges or satisfactions in the ordinary course of business or Liabilities of the Company reflected or reserved against in the Current Balance Sheet;

          (e) destruction of, damage to, or loss of any material assets (whether tangible or intangible), material business or material customer of the Company (whether or not covered by insurance);

          (f) employment dispute, including, claims or matters raised by any individuals or any workers’ representative organization, bargaining unit or union regarding labor trouble or claim of wrongful discharge or other unlawful employment or labor practice or action with respect to the Company;

          (g) change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by the Company other than as required by GAAP;

          (h) adoption of or change in any material Tax (as defined in Section 2.10(a) hereof) election, adoption of or change in any Tax accounting method, entry into any closing agreement, settlement or compromise of any Tax claim or assessment, or extension or waiver of the limitation period applicable to any Tax claim or assessment;

          (i) revaluation by the Company of any of its assets (whether tangible or intangible), including without limitation, writing down the value of inventory or writing off notes or accounts receivable;

          (j) declaration, setting aside or payment of a dividend or other distribution (whether in cash, stock or property) in respect of any Company Capital Stock, or any split, combination or reclassification in respect of any shares of Company Capital Stock, or any issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of Company Capital Stock, or any direct or indirect repurchase, redemption, or other acquisition by the Company of any shares of Company Capital Stock (or options, warrants or other rights convertible into, exercisable or exchangeable therefor);

          (k) increase in the salary or other compensation payable or to become payable by the Company to any of its respective officers, directors, employees or advisors, or the declaration, payment or commitment or obligation of any kind for the payment (whether in cash or equity) by the Company of a severance payment, termination payment, bonus or other additional salary or compensation to any such person other than in the ordinary course of business consistent with past practices;

          (l) Contract to which the Company is a party or by which it or any of its assets (whether tangible or intangible) are bound, except for Contracts entered into in the ordinary course of business consistent with past practice, or any termination, extension, amendment or modification

of the terms of any Contract to which the Company is a party or by which it or any of its assets are bound, except in the ordinary course of business consistent with past practices;

          (m) sale, lease, license or other disposition of any of the assets (whether tangible or intangible) or properties of the Company outside of the ordinary course of business, including, but not limited to, the sale of any accounts receivable of the Company, or any creation of any security interest in such assets or properties;

          (n) loan by the Company to any person or entity, or purchase by the Company of any debt securities of any person or entity except for advances to employees for travel and business expenses in the ordinary course of business consistent with past practices;

          (o) incurring by the Company of any indebtedness, amendment of the terms of any outstanding loan agreement, guaranteeing by the Company of any indebtedness, issuance or sale of any debt securities of the Company or guaranteeing of any debt securities of others, except for advances to employees for travel and business expenses in the ordinary course of business consistent with past practice;

          (p) waiver or release of any right or claim of the Company, including any write-off or other compromise of any account receivable of the Company;

          (q) commencement or settlement of any Action by the Company, the commencement, settlement, notice or, to the Knowledge of the Company, threat of any Action or proceeding or other investigation against the Company or its affairs, or any reasonable basis for any of the foregoing;

          (r) notice of any claim or potential claim of ownership, interest or right by any person other than the Company of the Company Intellectual Property (as defined in Section 2.13 hereof) or of infringement by the Company of any other person’s Intellectual Property (as defined in Section 2.13 hereof);

          (s) issuance or sale, or contract or agreement to issue or sell, by the Company of any shares of Company Capital Stock or securities convertible into, or exercisable or exchangeable for, shares of Company Capital Stock, or any securities, warrants, options or rights to purchase any of the foregoing, except for issuances of Company Common Stock upon the exercise of Company Options issued under the Plan;

          (t) (i) except standard end user licenses entered into in the ordinary course of business, consistent with past practice, sale or license of any Company Intellectual Property or execution, modification or amendment of any agreement with respect to the Company Intellectual Property with any person or entity or with respect to the Intellectual Property of any person or entity, or (ii) except in the ordinary course of business, purchase or license of any Intellectual Property or execution, modification or amendment of any agreement with respect to the Intellectual Property of any person or entity, (iii) agreement or modification or amendment of an existing

agreement with respect to the development of any Intellectual Property with a third party, or (iv) change in pricing or royalties set or charged by the Company to its customers or licensees or in pricing or royalties set or charged by persons who have licensed Intellectual Property to the Company;

          (u) agreement or modification to any agreement pursuant to which any other party was granted marketing, distribution, development, manufacturing or similar rights of any type or scope with respect to any Company Intellectual Property;

          (v) event or condition of any character that has had or is reasonably likely to have a Company Material Adverse Effect;

          (w) lease, license, sublease or other occupancy of any Leased Real Property by the Company except as otherwise disclosed in Section 2.12(a) of the Disclosure Schedule; or

          (x) agreement by the Company, or any officer or employees on behalf of the Company, to do any of the things described in the preceding clauses (a) through (w) of this Section 2.9 (other than negotiations with Parent and its representatives regarding the transactions contemplated by this Agreement and the Related Agreements).

2.10 Tax Matters.

          (a) Definition of Taxes . For the purposes of this Agreement, the term “ Tax ” or, collectively, “ Taxes ” shall mean (i) any and all U.S. federal, state, local and non-U.S. taxes, assessments and other governmental charges, duties, impositions and liabilities, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes as well as public imposts, fees and social security charges (including health, unemployment and pension insurance), together with all interest, penalties and additions imposed with respect to such amounts, (ii) any Liability for the payment of any amounts of the type described in clause (i) of this Section 2.10(a) as a result of being a member of an affiliated, consolidated, combined or unitary group for any period (including any arrangement for group or consortium relief or similar arrangement), and (iii) any Liability for the payment of any amounts of the type described in clauses (i) or (ii) of this Section 2.10(a) as a result of any express or implied obligation to indemnify any other person or as a result of any obligation under any agreement or arrangement with any other person with respect to such amounts and including any Liability for taxes of a predecessor or transferor.

          (b) Tax Returns and Audits .

               (i) The Company has (1) prepared and timely filed all material U.S. federal, and all material state, local and non-U.S. returns, estimates, information statements and reports, including amendments thereto (“ Returns ”) required to be filed or filed timely extensions relating thereto relating to any and all Taxes concerning or attributable to the Company or its

operations and such Returns are true and correct in all material respects and have been completed in accordance with applicable law, and (2) timely paid all Taxes it is required to pay (whether or not shown to be due on any Return) other than those for which the Company has established and maintained adequate reserves on its balance sheet as set forth and described on Disclosure Schedule 2.10(b)(i).

               (ii) The Company has paid or withheld with respect to its Employees (as defined in Section 2. 22(a) hereof) and other third parties, all non de-minimis U.S. federal, state, local, and non-U.S. income taxes and social security charges and similar fees, Federal Insurance Contribution Act amounts, Federal Unemployment Tax Act amounts and other Taxes required to be withheld, and has timely paid over any such withheld Taxes to the appropriate authorities.

               (iii) There is no material Tax deficiency outstanding, assessed or, to the Company’s Knowledge, proposed against the Company, and the Company has not executed any waiver of any statute of limitations on or extending the period for the assessment or collection of any material Tax.

               (iv) No audit or other examination of any Return of the Company is presently in progress, nor has the Company been notified in writing of any request for such an audit or other examination. No material adjustment relating to any Return filed by the Company for any tax year ending on or after December 31, 2003 has been proposed by any Tax authority to the Company or any representative thereof. No claim has ever been made in writing by an authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

               (v) As of the Balance Sheet Date, the Company had no liabilities for unpaid Taxes that have not been accrued or reserved on the Current Balance Sheet, whether asserted or unasserted, contingent or otherwise, and the Company has not incurred any Liability for Taxes since the Balance Sheet Date other than in the ordinary course of business. The Company has identified all uncertain tax positions contained in all Returns filed by the Company and has established adequate reserves and made any appropriate disclosures in the Financial Statements in accordance with the requirements of Financial Interpretation Notice 5 of FASB 109.

               (vi) The Company has made available to Parent or its legal counsel, copies of all Tax Returns for the Company filed for the past six (6) years.

               (vii) There are (and immediately following the Effective Time there will be) no Liens on the assets of the Company relating to or attributable to Taxes, other than Liens for Taxes not yet due and payable.

               (viii) None of the Company’s assets is treated as “tax-exempt use property,” within the meaning of Section 168(h) of the Code.

               (ix) The Company has (1) never been a member of an affiliated group (within the meaning of Code §1504(a)) filing a consolidated federal income tax Return (other than a group the common parent of which is the Company), (2) never been a party to any Tax sharing, indemnification, allocation or similar agreement, (3) no Liability for the Taxes of any person (other than the Company and the Company Subsidiaries) under Treasury Regulation § 1.1502-6 (or any similar provision of state, local or foreign law (including any arrangement for group or consortium relief or similar arrangement)), as a transferee or successor, by contract or agreement, or otherwise, and (4) never been a party to any joint venture, partnership or other arrangement that, to the Company’s Knowledge, could be treated as a partnership for Tax purposes.

               (x) The Company has not been a “United States Real Property Holding Corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

               (xi) The Company has not constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code.

               (xii) The Company has not engaged in a reportable transaction under Treas. Reg. § 1.6011-4(b), including a transaction that is the same as or substantially similar to one of the types of transactions that the Internal Revenue Service has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a listed transaction, as set forth in Treas. Reg. § 1.6011-4(b)(2).

               (xiii) The Company’s federal tax returns delivered to Parent pursuant hereto set forth as of the date of such return: (1) the basis of the Company in its assets grouped by category of asset, (2) the amount of any net operating loss, net capital loss, unused investment, foreign, or other Tax credit and the amount of any limitation upon any of the foregoing, and (3) the amount of any deferred gain or loss allocable to the Company arising out of any deferred intercompany transaction as defined in Treas. Reg. § 1.1502-13 or any similar provision of applicable law.

               (xiv) The Company will not be required to include any material income or gain or exclude any material deduction or loss from Taxable income as a result of (1) any change in method of accounting under Section 481(c) of the Code, (2) closing agreement under Section 7121 of the Code, (3) deferred intercompany gain or excess loss account under Treasury Regulations under Section 1502 of the Code (or in the case of each of clauses (1), (2) and (3) of this Section 2. 10(b)(xiv) , under any similar provision of applicable law), (4) installment sale or open transaction disposition, or (5) prepaid amount received by the Company.

               (xv) The Company uses the accrual method of accounting for tax purposes.

               (xvi) The Company is not subject to Tax in any foreign jurisdiction other than its country of incorporation or formation by virtue of having a permanent establishment or other place of business or by virtue of having a source of income in that country.

               (xvii) The Company is in full compliance with all terms and conditions of any Tax exemption, Tax holiday or other Tax reduction agreement or order (“ Tax Incentive ”) and the consummation of the transactions contemplated by this Agreement will not have any adverse effect on the continued validity and effectiveness of any such Tax Incentive.

               (xviii) The prices for any property or services (or for the use of any property) provided by or to the Company or any of its subsidiaries are arm’s length prices for purposes of the relevant transfer pricing laws, including Treasury Regulations promulgated under Section 482 of the Code.

          (c) Executive Compensation Tax . There is no Contract, plan or arrangement to which the Company is a party, including, without limitation, the provisions of this Agreement, covering any Employee of the Company, that, individually or collectively, will give rise to the payment of any amount that would not be deductible pursuant to Sections 280G or 404 of the Code or that will give rise to a penalty under Section 409A of the Code.

          (d) Section 409A . The Company is not party to any Contract or arrangement that is a “nonqualified deferred compensation plan” subject to Section 409A of the Code other than those disclosed in Section 2.10(d) of the Disclosure Schedule. Each such nonqualified deferred compensation plan has been operated since January 1, 2005 in good faith compliance with Section 409A of the Code and IRS Notice 2005-1. No nonqualified deferred compensation plan has been “materially modified” (within the meaning of IRS Notice 2005-1) at any time after October 3, 2004. No stock option, Company Option or other right to acquire Company Common Stock or other equity of the Company (i) has an exercise price that was less than the fair market value of the underlying equity as of the date such stock option, Company Option, or other right was granted, (ii) has any feature for the deferral of compensation other than the deferral of recognition of income until the later of exercise or disposition of such stock option, Company Option, or rights, or (iii) has been granted after December 31, 2004, with respect to any class of stock of the Company that is not “service recipient stock” (within the meaning of applicable regulations under Section 409A).

     2.11 Restrictions on Business Activities .  Except as set forth in Section 2.11 of the Disclosure Schedule, there is no Contract (non-competition or otherwise), judgment, injunction, order or decree to which the Company is a party or otherwise binding upon the Company that has or may reasonably be expected to have the effect of prohibiting or impairing any business practice of the Company, any acquisition of property (tangible or intangible) by the Company, the conduct of business by the Company, or otherwise limiting the freedom of the Company to engage in any line of business or to compete with any person. Without limiting the generality of the foregoing, the Company has not entered into any Contract under which the Company is restricted from selling, licensing, manufacturing or otherwise distributing any of its technology or products or from

providing services to customers or potential customers or any class of customers, in any geographic area, during any period of time, or in any segment of the market.

     2.12 Title to Properties; Absence of Liens and Encumbrances; Condition of Equipment; Customer Information . 

          (a) The Company does not own any real property, nor has the Company ever owned any real property. Section 2.12(a) of the Disclosure Schedule sets forth a list of all real property currently leased, subleased or licensed by or from the Company or otherwise used or occupied by the Company for the operation of its business (the “ Leased Real Property ”). All such Lease Agreements are valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing default by the Company, or to the Knowledge of the Company, the other party thereto, no rentals are past due, or event of default (or event which with notice or lapse of time, or both, would constitute a default) by the Company, or to the Knowledge of the Company, the other party thereto. The Company has not received any notice of a default, alleged failure to perform, or any offset or counterclaim with respect to any such Lease Agreement, which has not been fully remedied and withdrawn. The Closing will not affect the enforceability against any person of any such Lease Agreement or the rights of the Company to the continued use and possession of the Leased Real Property for the conduct of business as presently conducted.

          (b) To the Company’s Knowledge, the Leased Real Property is in good operating condition and repair, free from structural, physical and mechanical defects and is structurally sufficient and otherwise suitable for the conduct of the business as presently conducted, except for normal wear and tear. To the Company’s Knowledge, neither the operation of the Company on the Leased Real Property nor such Leased Real Property materially violates any Law.

          (c) The Company has good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all of its tangible properties and assets, real, personal and mixed, used or held for use in its business, free and clear of any Liens, except (i) as reflected in the Current Balance Sheet, (ii) Liens for Taxes not yet due and payable, and (iii) such imperfections of title and encumbrances, if any, which do not detract from the value or interfere with the present use of the property subject thereto or affected thereby.

          (d) All equipment owned or leased by the Company is (i) adequate for the conduct of the business of the Company as currently conducted and as currently contemplated to be conducted, and (ii) in good operating condition, regularly and properly maintained, subject to normal wear and tear.

     2.13 Intellectual Property.  

          (a) Definitions . For all purposes of this Agreement, the following terms shall have the following respective meanings:

               (i) “ Technology ” shall mean any or all of the following (1) works of authorship including, without limitation, computer programs, source code, and executable code, whether embodied in software, firmware or otherwise, architecture, documentation, designs, files, records, databases, and data, (2) inventions (whether or not patentable), discoveries, improvements, and technology, (3) proprietary and confidential information, trade secrets and know how, (4) databases, data compilations and collections and technical data, (5)  domain names, web addresses and sites, (6) tools, methods and processes, and (7) any and all instantiations or embodiments of the foregoing in any form and embodied in any media.

               (ii) “ Intellectual Property Rights ” shall mean worldwide common law and statutory rights associated with (1) patents and patent applications of any kind, (2) copyrights, copyright registrations and copyright applications, “moral” rights and mask work rights, (3) the protection of trade and industrial secrets and confidential information, (4) other proprietary rights relating to intangible intellectual property, (5) logos, trademarks, trade names and service marks, (6) analogous rights to those set forth above, and (7) divisions, continuations, renewals, reissuances and extensions of the foregoing (as applicable).

               (iii) “ Company Intellectual Property ” shall mean any and all Technology and Intellectual Property Rights that are owned by or exclusively licensed to the Company.

               (iv) “ Registered Intellectual Property ” shall mean Intellectual Property and Intellectual Property Rights that have been registered, applied for, filed, certified or otherwise perfected, issued, or recorded with or by any state, government or other public or quasi-public legal authority.

     No representations or warranties whatsoever are made pursuant to this Section 2.13 regarding any Intellectual Property Rights or Technology the Company (i) licenses (or licensed) from the Parent or Parent’s Subsidiaries; (ii) sublicenses (or sublicensed) from the Parent or Parent’s Subsidiaries; or (iii) otherwise obtains (or obtained) from the Parent or Parent’s Subsidiaries.

          (b) Section 2.13(b) of the Disclosure Schedule lists all material Company Intellectual Property. In addition, Section 2.13(b) of the Disclosure Schedule (i) lists all Registered Intellectual Property owned by, or filed in the name of, the Company (the “ Company Registered Intellectual Property ”), and (ii) lists any material proceedings or actions before any court, tribunal (including the United States Patent and Trademark Office (the “ PTO ”) or equivalent authority anywhere in the world) related to any of the Company Registered Intellectual Property or Company Intellectual Property.

          (c) Each application for registration within the Company Registered Intellectual Property was properly filed and is pending, each additional item of Company Registered Intellectual Property is subsisting and to the knowledge of the Company valid. All necessary registration, maintenance and renewal fees in connection with such Company Registered Intellectual Property have been paid and all necessary documents and certificates in connection with such Company Registered Intellectual Property have been filed with the relevant patent, copyright,

trademark or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Registered Intellectual Property. There are no actions that must be taken by the Company with respect to the Registered Intellectual Property as of the date of this Agreement or within the time period ending sixty (60) days after the Closing Date, including the payment of any registration, maintenance or renewal fees or the filing of any documents, applications or certificates for the purposes of maintaining, perfecting or preserving or renewing any Registered Intellectual Property. In each case in which the Company has acquired any Registered Intellectual Property from any person, the Company has obtained a valid and enforceable assignment sufficient to irrevocably transfer all rights in such Registered Intellectual Property to the Company, and, to the maximum extent provided for by, and in accordance with, applicable laws and regulations, the Company has recorded each such assignment with the relevant governmental authorities, including the PTO, the U.S. Copyright Office, or their respective equivalents in any relevant foreign jurisdiction, as the case may be.

          (d) All Company Intellectual Property will be fully transferable and licensable by the Final Surviving Entity and/or Parent without restriction and without payment of any kind to any third party, except as may be required by any agreements entered into by the Parent or its Subsidiaries (to which the Company is not a party).

          (e) Each item of Company Intellectual Property, including all Company Registered Intellectual Property listed in Section 2.13(b) of the Disclosure Schedule, and all Technology exclusively licensed to the Company, is free and clear of any Liens other than those set forth on Section 2.13(s) of the Disclosure Schedule. The Company is the exclusive owner or exclusive licensee of all Company Intellectual Property.

          (f) (i) The Company has not transferred ownership of, or granted any exclusive license of or exclusive right to use, or authorized the retention of any exclusive rights to use or joint ownership of, any Technologies or Intellectual Property Rights that are or were Company Intellectual Property, to any other person, except in connection with the transfer of ownership to the Company’s customers (the “ Company Customers ”) of code, documentation or other deliverables custom-developed for and delivered to such Company Customers (“ Deliverables ”) as described on Section 2.13(f)(i) of the Disclosure Schedule, and upon such transfer of ownership to Company Customers of the Deliverables, such Deliverables no longer constitute Company Intellectual Property for purposes of this Agreement. To the extent the Company has transferred ownership of any Deliverables to any individual Company Customer, such Deliverables are unique to the services performed for the individual Company Customer and do not have general applicability to the Company’s business as currently conducted and currently proposed (by Company) to be conducted, the Company has not delivered any such Deliverables (or any embodiments, versions or derivatives thereof), or transferred ownership or any other rights (including any Intellectual Property Rights) in or to any such Deliverables (or any embodiments, versions or derivatives thereof) to any other Company Customers or other person, and the Company has taken reasonable steps in accordance with normal industry practices to prevent such Deliverables (and embodiments, versions or derivatives thereof) from being so delivered or transferred to other Company Customers or persons.

(ii) The Company has not permitted the Company’s rights in any Intellectual Property Rights that are or were Company Intellectual Property to enter into the public domain.

          (g) The Company Intellectual Property together with the Intellectual Property Rights non-exclusively licensed to the Company and the Shrink-Wrap Code licensed to the Company constitutes all of the Technology and Intellectual Property Rights used in, necessary to or otherwise would be infringed by the conduct of the business of the Company as it is currently conducted or currently planned (by the Company) to be conducted (including, without limitation, with respect to products, technology or services currently under development). Except as set forth on Section 2.13(g) of the Disclosure Schedule, the Final Surviving Entity will own or possess sufficient rights to all Technology and Intellectual Property Rights immediately following the Closing Date that are necessary to the operation of the business of the Company as it currently is conducted or planned (by the Company) to be conducted and without infringing on the Intellectual Property Rights of any person (including, without limitation, infringing on any Intellectual Property Rights transferred to Company Customers as described in Section 2.13(f) of the Disclosure Schedule).

          (h) No third party that has exclusively licensed Technology or Intellectual Property Rights to the Company has ownership rights or license rights to improvements or derivative works made by the Company in such Technology or Intellectual Property Right that have been exclusively licensed to the Company.

          (i) Section 2.13(i) of the Disclosure Schedule lists all Major Customer Contracts (as defined in Section 2.14 of the Company Disclosure Schedule) between the Company and any other person wherein or whereby the Company has agreed to, or assumed, any obligation or duty to warrant, indemnify, reimburse, hold harmless, guaranty or otherwise assume or incur any obligation or Liability or provide a right of rescission with respect to the infringement or misappropriation by the Company, or such other person of the Intellectual Property Rights of any person other than the Company, but excluding (i) Shrink-Wrap Code (as defined in Section 2.14(a)(xiv) hereof), and (ii) non-disclosure agreements entered into in the ordinary course of business.

          (j) Except as set forth on Section 2.13(j) of the Disclosure Schedule, the operation of the business of the Company as it has been, as it is currently conducted, and as it is contemplated to be conducted by the Company, including the design, development, use, import, branding, advertising, promotion, marketing, distribution, manufacture and sale of any product, technology or service (including products, technology or services that has been or are currently under development) of the Company has not infringed or misappropriated, does not infringe or misappropriate, and immediately following the Closing will not infringe or misappropriate (when conducted by Parent and/or Final Surviving Entity in the manner currently planned to be conducted by Company) any Intellectual Property Rights of any person (including, without limitation, infringement or misappropriation of any Intellectual Property Rights transferred to Company Customers as described in Section 2.13(f) of the Disclosure Schedule), violate any right of any person (including any right to privacy or publicity), or constitute unfair competition or trade

practices under the Laws of any jurisdiction. Except as set forth on Section 2.13(j) of the Disclosure Schedule, the Company has not received notice from any person claiming that such operation or any act, any product, technology or service (including products, technology or services currently under development) or Intellectual Property of the Company infringes or misappropriates any Intellectual Property Rights of any person or constitutes unfair competition or trade practices under the laws of any jurisdiction (nor does the Company have Knowledge of any basis therefor).

          (k) Neither this Agreement nor the transactions contemplated by this Agreement, including the assignment to Parent and/or the Final Surviving Entity by operation of law or otherwise of any contracts or agreements to which the Company is a party, will result in: (i) Parent or any of its subsidiaries granting to any third party any right to or with respect to any Intellectual Property Rights owned by, or licensed to Parent or any of its subsidiaries, (ii) Parent or any of its subsidiaries, being bound by or subject to, any exclusivity obligations, non-compete or other restriction on the operation or scope of their respective businesses, or (iii) Parent or the Final Surviving Entity being obligated to pay any royalties or other material amounts to any third party in excess of those payable by any of them, respectively, in the absence of this Agreement or the transactions contemplated hereby provided, however, that the representations made in this Section 2.14(k) will not be deemed breached as a result of the operation of provisions contained in any contract, license, agreement or arrangement to which Parent is a party (but to which the Company or any of its Subsidiaries is not).

          (l) To the Knowledge of the Company, no person or entity has infringed or misappropriated or is infringing or misappropriating any Company Intellectual Property provided that the foregoing representation shall apply to the Company’s actual knowledge and not be construed to imply a duty of investigation (even if competitors have products that the Company later, through further diligence and/or investigation, determines are or have been infringing or misappropriating any Company Intellectual Property).

          (m) The Company has taken reasonable steps in accordance with normal industry practices to protect the Company rights in confidential information and trade secrets or trade secrets provided by any third party to the Company. Without limiting the foregoing, the Company has, and enforces, a policy requiring each employee and contractor to execute proprietary information, confidentiality and assignment agreements consistent with normal industry practice and with Company’s standard forms provided to the Parent prior to the date hereof, and all current and former Employees and contractors of the Company have executed such an agreement in substantially the Company’s standard form. To the extent that any Technology has been developed or created independently or jointly by any person other than the Company for which the Company has, directly or indirectly, provided consideration for such development or creation, the Company has a written Contract with such person with respect thereto, and the Company thereby has obtained ownership of, and is the exclusive owner of (subject to the transfer of ownership to the Company Customers of Deliverables as described on Section 2.13(f)(i) of the Disclosure Schedule), all Intellectual Property Rights therein by operation of law or by valid assignment, and has required the waiver of all non-assignable rights.

          (n) No Company Intellectual Property is subject to any proceeding or outstanding decree, order, judgment or settlement agreement or stipulation (“ Order ”) that restricts in any manner the use, transfer or licensing thereof by the Company or may affect the validity, use or enforceability of such Company Intellectual Property, provided that the foregoing representation shall be limited to the knowledge of the Company as it relates to any generally applicable Order or proceeding to which the Company or its subsidiaries is not a party.

          (o) No (i) product, technology, service or publication of the Company, (ii) material published or distributed by the Company, or (iii) conduct or statement of the Company constitutes obscene material, a defamatory statement or material, false advertising or otherwise violates any law or regulation.

          (p) No government funding, facilities or resources of a university, college, other educational institution or research center or funding from third parties was used in the development of the Company Intellectual Property and no Governmental Entity, university, college, other educational institution or research center has any claim or right in or to the Company Intellectual Property. Except as set forth on Section 2.13(p) of the Disclosure Schedule, to the Knowledge of the Company, no current or former Employee or contractor of the Company who was involved in, or who contributed to, the creation or development of any Company Intellectual Property, has performed services for the government, a university, college or other educational institution, or a research center, during a period of time during which such Employee or contractor was also performing services for the Company.

          (q) The Company has complied with all applicable Laws and its internal privacy policies relating to the privacy of users of its products, services, and Web sites, and also the collection, storage, and transfer of any personally identifiable information collected by or on behalf of the Company, provided that with respect to information maintained or provided to third parties by or on behalf of the Company in compliance with the foregoing, the Company shall be entitled to rely on such third parties to maintain the privacy of such users and to the Knowledge of the Company all such third parties have maintained such privacy.

          (r) Neither the Company nor any person or entity acting on the Company ’ s behalf has disclosed, delivered or licensed to any person, agreed to disclose, deliver or license to any person, or permitted the disclosure or delivery to any escrow agent or other person of any source code owned by the Company or used in its business (“ Company Source Code ”). No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time or both) will, or would reasonably be expected to, result in the disclosure or delivery by or on behalf of the Company of any Company Source Code. Company Source Code means any software source code or related proprietary or confidential information or algorithms of any Company Intellectual Property.

          (s) Section 2.13(s) of the Disclosure Schedule lists all software or other material that is distributed as “freeware,” “free software,” “open source software” or under a similar licensing or distribution model (including the GNU General Public License) that the Company uses or

licenses, and identifies that which is incorporated into, combined with, or distributed in conjunction with any Company products (“Incorporated Open Source Software”) and identifies the type of license or distribution model governing its use. The Company’s use and/or distribution of each component of Incorporated Open Source Software complies and has complied with all material provisions of the applicable license agreement, and in no case does or has such use or distribution of Incorporated Open Source Software by the Company give rise under such license agreement to any obligation to disclose or distribute any Company Intellectual Property in source code form.

     2.14 Agreements, Contracts and Commitments . 

          (a) Except as set forth in Section 2.14(a) of the Disclosure Schedule (specifying the appropriate subparagraph), the Company is not currently a party to, nor is it bound by any of the following (each, a “ Material Contract ”):

               (i) any employment or consulting Contract with an Employee or consultant or salesperson;

               (ii) any Contract or plan, including, without limitation, any stock option plan, stock appreciation rights plan or stock purchase plan, any of the benefits of which will be increased, or the vesting of benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement (either alone or upon the occurrence of any additional subsequent events) or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement;

               (iii) any fidelity or surety bond or completion bond;

               (iv) any lease of personal property or equipment having a value in excess of $100,000 individually or $200,000 in the aggregate;

               (v) any agreement of indemnification or guaranty other than those disclosed in Section 2.13(i) of the Disclosure Schedule;

               (vi) any Contract relating to capital expenditures and requiring future payments in any calendar year in excess of $100,000 individually or $200,000 in the aggregate;

               (vii) any Contract relating to the disposition or acquisition of assets or any interest in any person outside the ordinary course of the Company’s business;

               (viii) any mortgages, indentures, guarantees, loans or credit agreements, security agreements or other agreements or instruments relating to the borrowing of money or extension of credit;

               (ix) other than capital expenditures, and except for any items purchased or licensed on behalf of customers in the ordinary course of the Company’s business, any purchase

order or Contract for the purchase of materials involving in excess of $100,000 individually or $200,000 in the aggregate;

               (x) any Contract containing covenants or other obligations granting or containing any current or future commitments regarding exclusive rights, non-competition, “most favored nations,” restriction on the operation or scope of its businesses or operations, or similar terms;

               (xi) any dealer, distribution, marketing, development, joint venture, partnership, or similar Contract which requires payment in any calendar year in excess of $200,000 individually or $400,000 in the aggregate;

               (xii) any sales representative, original equipment manufacturer, manufacturing, value added, remarketer, reseller, or independent software vendor, or other Contract for use or distribution of the products, technology or services of the Company which requires payments in any calendar year in excess of $200,000 individually or $400,000 in the aggregate;

               (xiii) any customer Contract involving, or reasonably expected to involve revenues to the Company in any calendar year in excess of $200,000 annually or $400,000 in the aggregate;

               (xiv) any agreement that is royalty bearing or any Contract with respect to any Company Intellectual Property, including without limitation, any in-licenses, out-licenses and cross licenses, but excluding (1) non-exclusive in-licenses and purchase agreements for commercial off-the-shelf Intellectual Property that are generally available on nondiscriminatory pricing terms, in the case of software for a cost of not more than $50,000 for a perpetual license for a single user or work station or $100,000 in the aggregate for all users and work stations (“ Shrink-Wrap Code ”), and (2) non-disclosure agreements entered into in the ordinary course of business; or

               (xv) any other Contract that requires the payment or receipt by the Company of $200,000 individually or $400,000 in the aggregate or more in any calendar year and is not cancelable without penalty within thirty (30) days.

          (b) The Company is in material compliance with and has not materially breached, violated or defaulted under, or received written notice that it has materially breached, violated or defaulted under, any of the terms or conditions of any Material Contract, nor does the Company have Knowledge of any event that would constitute such a breach, violation or default with the lapse of time, giving of notice or both. Each Material Contract is in full force and effect except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in a proceeding at law or in equity). The Company is not subject to any default thereunder, nor to the Knowledge of the Company, is any party obligated to the Company pursuant to any such Material Contract subject to, or reasonably likely to become subject to any default in any material respect thereunder. Section 2.14(b) of the Disclosure Schedule

identifies each Material Contract which by its terms will terminate or may be terminated by either party thereto, solely by the passage of time or at the election of either party.

     2.15 Government Contracts . 

          (a) With respect to each (i) current Contract between the Company, on the one hand, and any Governmental Entity, on the other hand, and (ii) each outstanding bid, quotation or proposal by the Company (each, a “ Bid ”) that if accepted or awarded would reasonably be expected to lead to a Contract between the Company, on the one hand, and any Governmental Entity, on the other hand, including any facilities Contract for the use of government-owned facilities (each such Contract or Bid, a “ Company Government Contract ”) and each Contract between the Company, on the one hand, and any prime contractor or upper-tier subcontractor, on the other hand, relating to a Contract between such person and any Governmental Entity, and each outstanding Bid that if accepted or awarded could lead to a Contract between the Company, on the one hand, and a prime contractor or upper-tier subcontractor, on the other hand, relating to a Contract between such person and any Governmental Entity (each such Contract or Bid, a “ Company Government Subcontract ”):

               (i) each such Company Government Contract or Company Government Subcontract was legally awarded, is binding on the parties thereto, and is in full force and effect except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights generally and by general equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity; provided that for purposes of this Section 2. 15(a)(i) , the terms Company Government Contract and Company Government Subcontract shall not include any Bids;

               (ii) no reasonable basis exists to give rise to (1) a material claim for fraud (as such concept is defined under the state or federal Laws of the United States) in connection with any Company Government Contract or Company Government Subcontract or under the United States False Claims Act or the United States Procurement Integrity Act, or (2) a claim under the United States Truth in Negotiations Act;

               (iii) since January 1, 2003 neither the United States government nor any prime contractor, subcontractor or other person or entity has notified the Company, in writing, that the Company has, or may have, breached or violated in any material respect any Law, certification, representation, clause, provision or requirement pertaining to such Company Government Contract or Company Government Subcontract, and all facts set forth or acknowledged by any representations, claims or certifications submitted by or on behalf of the Company in connection with such Company Government Contract or Company Government Subcontract were current, accurate and complete in all material respects on the date of submission;

               (iv) since January 1, 2003 the Company has not received any notice of termination for convenience, notice of termination for default, cure notice or show cause notice (or, in the case of Contracts governed by Laws other than the state or federal Laws of the United States,

the functional equivalents thereof, if any) pertaining to such Company Government Contract or Company Government Subcontract, and the Company is not aware of any basis for any such notice, except any notice that, individually or in the aggregate, is not reasonably likely to have a Company Material Adverse Effect;

               (v) since January 1, 2003 no cost incurred by the Company pertaining to such Company Government Contract or Company Government Subcontract has been questioned or challenged, is the subject of any audit or, to the Knowledge of the Company, investigation or has been disallowed by any Government Entity, except any investigation, audit or disallowance (or, in the case of Contracts governed by Laws other than the state or federal Laws of the United States, the functional equivalents thereof, if any) that, individually or in the aggregate, is not reasonably likely to have a Company Material Adverse Effect;

               (vi) since January 1, 2003 no material payment due to the Company pertaining to such Company Government Contract or Company Government Subcontract has been withheld or set off, and the Company is entitled to all progress or other payments received to date with respect thereto; and

               (vii) the Company has complied in all material respects with all requirements of such Company Government Contract or Company Government Subcontract and any Law relating to the safeguarding of, and access to, classified information (or, in the case of Contracts governed by Laws other than the state or federal Laws of the United States, the functional equivalent thereof, if any).

          (b) Neither the Company, nor any of the respective directors, officers, employees, consultants or agents of the Company, is, or within the past three (3) years has been, to the Knowledge of the Company (i) under any material administrative, civil or criminal investigation, audit, indictment or information by any Governmental Entity, (ii) the subject of any material audit or investigation by the Company, in each case, with respect to any alleged violation of Law or Contract arising under or relating to any Company Government Contract or Company Government Subcontract, or (iii) debarred or suspended, or proposed for debarment or suspension, or received notice of actual or proposed debarment or suspension (or for purposes of this clause (iii), in the case of Contracts governed by Laws other than the state or federal Laws of the United States, the functional equivalents thereof, if any), from participation in the award of any Contract with any Governmental Entity. There exist no facts or circumstances that, to the Knowledge of the Company, would warrant the institution of suspension or debarment proceedings or a finding of nonresponsibility or ineligibility with respect to the Company, or any of its respective directors, officers or managers, in any such case, for purposes of doing business with any Governmental Entity.

          (c) Since January 1, 2003, the Company has not received written notice of any (i) outstanding material claims (including claims relating to bid or award protest proceedings (or, in the case of Company Government Contracts or Company Government Subcontract governed by Laws other than the state or federal Laws of the United States, the functional equivalents thereof, if

any)) against the Company, either by any Governmental Entity or by any prime contractor, subcontractor, vendor or other person, arising under or relating to any Company Government Contract or Company Government Subcontract, or (ii) outstanding material claims or requests for equitable adjustment (or, in the case of Company Government Contracts or Company Government Subcontract governed by Laws other than the state or federal Laws of the United States, the functional equivalent thereof, if any) or disputes (including claims, requests and formal disputes relating to bid or award protest proceedings) between the Company, on the one hand, and the United States government, on the other hand, under the United States Contract Disputes Act, as amended, or any other Law or between the Company, on the one hand, and any prime contractor, subcontractor, vendor or other person, on the other hand, arising under or relating to any Company Government Contract or Company Government Subcontract. Since January 1, 2003 the Company has not received any written adverse or negative past performance evaluations or ratings in connection with any Company Government Contract, Company Government Subcontract or other Contract with a Governmental Entity, except any evaluation or rating that, individually or in the aggregate, is not reasonably likely to have a Company Material Adverse Effect. The Company does not have (i) any interest in any pending claim against any Governmental Entity, or (ii) any interest in any pending claim against any prime contractor, subcontractor, vendor or other person in each case arising under or relating to any Company Government Contract or Company Government Subcontract.

          (d) The Company is not aware of any facts that are reasonably likely to give rise to the revocation of any security clearance of the Company, or any employee