AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this " Agreement ") is made and entered into as of August 27, 2008 (the " Agreement Date "), by and among Adaptec, Inc., a Delaware corporation (the " Purchaser "), Ariel Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of the Purchaser (the " Merger Sub "), Aristos Logic Corporation, a Delaware corporation (the " Company "), and TPG Ventures, L.P. solely in its capacity as the representative of the Stockholders as provided herein (the " Stockholder Representative "). Except as otherwise set forth herein, capitalized terms used herein have the meanings set forth in Exhibit A .

R E C I T A L S

WHEREAS, the respective boards of directors of the Purchaser, the Merger Sub and the Company have deemed it advisable and in the best interests of their respective corporations and stockholders that the Purchaser and the Company consummate the merger and other transactions contemplated by this Agreement;

WHEREAS, the respective boards of directors of the Merger Sub and the Company have authorized and approved the merger of the Merger Sub with and into the Company in accordance with the provisions of this Agreement; and

                WHEREAS, concurrently with the execution and delivery of this Agreement, and as a material inducement to Purchaser's willingness to enter into this Agreement, each employee of the Company listed on Exhibit B-1 (each, a " Key Employee ") is executing and delivering to Purchaser an Employment Offer Letter substantially in the form attached hereto as Exhibit B-2 (the " Employment Offer Letter "), in each case to become effective upon the Closing.      

NOW, THEREFORE, intending to be legally bound and in consideration of the mutual provisions set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE 1
THE MERGER

1.1   The Merger . In accordance with the provisions of this Agreement, at the Effective Time, the Merger Sub will be merged with and into the Company in a statutory merger in accordance with the provisions of the Delaware General Corporation Law (" DGCL ") and the provisions of this Agreement (the " Merger "). Upon the Effective Time of the Merger, the Company will continue in existence as the surviving corporation of the Merger and as a wholly owned subsidiary of the Purchaser (the " Surviving Corporation "), and the separate corporate existence of the Merger Sub will cease.

1.2   Closing; Effective Time and Actions at the Closing . The consummation of the Merger and the other transactions contemplated by this Agreement (the " Closing ") will take place at the offices of Fenwick & West LLP, 801 California Street, Mountain View, California, at a time and date to be specified by the parties, which will be no later than the third Business Day after the satisfaction or waiver of the

conditions, set forth in Article 6, or at such other time, date and location as the Purchaser and the Company may agree in writing (the " Closing Date "). On the Closing Date:

1. Effective Time . The Merger will be consummated by the filing of a certificate of merger in substantially the form attached hereto as Exhibit D (the " Certificate of Merger ") with the Secretary of State of the State of Delaware in accordance with Section 251(c) of the DGCL. The time and date that the Merger becomes effective in accordance with Sections 103 and 251 of the DGCL is referred to in this Agreement as the " Effective Time ."
2. General Deliveries . The parties will deliver or cause to be delivered the various certificates, instruments and documents referred to in Article 6, except to the extent that any obligation hereunder to make any such delivery is waived in accordance with this Agreement.
3. Escrow Agreement; Escrow Fund .

3. 1. The Purchaser, the Stockholder Representative and U.S. Bank, N.A. (the " Escrow Agent ") acting as the escrow agent, will execute and deliver the Escrow Agreement substantially in the form attached hereto as Exhibit E (the " Escrow Agreement ").
   2. At the Effective Time, the Purchaser will withhold an amount equal to the Escrow Amount from the Net Merger Consideration payable to the Series G Holders pursuant to Section 2.1(b)(i) and specifically will withhold from each Series G Holder an amount of the Net Merger Consideration equal to such Series G Holder's Pro Rata Share of the Escrow Amount. The Escrow Amount will not be withheld from the payments due in respect of any shares of Series G Preferred Stock that are issued and outstanding immediately prior to the Effective Time and which constitute and remain Dissenting Shares (as defined herein). The Purchaser will deposit with the Escrow Agent via wire transfer, after the Effective Time, an amount equal to the Escrow Amount. The Escrow Agent will establish a separate escrow account to hold the Escrow Amount (the " Escrow Fund ") in trust which amount (plus any interest paid on such Escrow Amount), will be payable to the Series G Holders less any amount paid in respect of Indemnification Claims and any amount withheld in the Escrow Fund with respect to any pending Indemnification Claims, in accordance with this Agreement and the Escrow Agreement. The Escrow Fund will be deemed to have been withheld from each Series G Holder according to such Series G Holder's Pro Rata Share.
   3. If, when and to the extent amounts are released from the Escrow Fund after the Effective Time as provided in Section 2.8 hereof, the Series G Holders shall be entitled to receive in cash an amount equal to the amount of the Escrow Amount to be released, payable to each Series G Holder according to such Series G Holder's Pro Rata Share.
   4. The adoption of this Agreement and approval of the Merger by the Stockholders will constitute approval of the Escrow Fund and the Escrow Agreement (including without limitation the payments made pursuant to Section 2.3).

4. Payment to Series G Holders . After the Effective Time, the Purchaser and the Escrow Agent (as applicable) will pay to the Series G Holders the applicable portion of the Net Merger Consideration payable to them in accordance with Article 2 and other applicable provisions of this Agreement and the Escrow Agreement.

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1.3   Effects of the Merger . At and upon the Effective Time, the Merger will have all of the effects provided by the DGCL. Without limiting the generality of the foregoing, as of the Effective Time, all assets and properties (real or personal), rights, privileges, powers and franchises of the Company and the Merger Sub will vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and the Merger Sub will become debts, liabilities and duties of the Surviving Corporation.

1.4   Certificate of Incorporation and Bylaws . At and upon the Effective Time, the certificate of incorporation of the Surviving Corporation shall be amended in its entirety to read as set forth in the Certificate of Merger, until thereafter amended in accordance with the DGCL. At and upon the Effective Time, the bylaws of the Surviving Corporation shall be amended in their entirety to read as set forth in the Bylaws of the Merger Sub that are in effect immediately prior to the Effective Time, until thereafter amended in accordance with the DGCL and such bylaws.

1.5   Directors . Immediately after the Effective Time, the individuals who are the members of the board of directors of the Merger Sub as of immediately prior to the Effective Time shall be appointed, and will be and become, the only members of the board of directors of the Surviving Corporation and the only members of the board of directors of each Subsidiary of the Surviving Corporation and will hold office from the Effective Time until their respective successors are duly elected or appointed and qualified in the manner provided in the certificate of incorporation and the bylaws of the Surviving Corporation (with respect to the Surviving Corporation) or the relevant charter documents of its Subsidiary (with respect to its Subsidiary), as applicable, or as otherwise provided by Law.

1.6   Officers . Immediately after the Effective Time, the individuals who are the officers of the Merger Sub immediately prior to the Effective Time shall be appointed, and will be and become the only officers of the Surviving Corporation and of each Subsidiary of the Surviving Corporation and will hold office from the Effective Time until their respective successors are duly elected or appointed and qualified in the manner provided in the certificate of incorporation and bylaws of the Surviving Corporation or as otherwise provided by Law.

1.7   Approval of Stockholder Representative . The adoption of this Agreement and approval of the Merger by the Stockholders will constitute approval of the appointment of the Stockholder Representative for all purposes of this Agreement and any agreements entered into pursuant to this Agreement.

ARTICLE 2
EFFECT OF MERGER; EXCHANGE PROCEDURES

2.1   Merger Consideration .

1. For the purposes hereof, the following definitions will apply:

1. 1. " Escrow Amount " means an amount equal to fifteen percent (15%) of the Net Merger Consideration.
   2. " Base Consideration " means Forty-One Million United States Dollars (US$41,000,000).
   3. " Net Merger Consideration " means the dollar amount that is equal to the Base Consideration, minus, without duplication , the sum of (A) the maximum amount payable under the

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Management Liquidation Pool, (B) the total amount of all Closing Indebtedness, (C) the total amount of the Purchaser Closing Loan Balance, (D) the maximum amount payable under the Special Employee Bonus Pool, (E) the total amount of all Closing Expenses, (F) the Excess Company Closing Liabilities and (G) any payments made by the Company after August 4, 2008 in respect of any of the items set forth in (A) through (E) hereof.

2. Conversion/Treatment of Company Capital Stock .

                              iv.             Company Capital Stock . As of the Effective Time, the shares of Company Capital Stock that are issued and outstanding immediately prior to the Effective Time (except as otherwise provided in Sections 1.2, 2.1(b)(ii) and 2.6 hereof) shall, upon the terms and subject to the conditions set forth in this Agreement (including without limitation the provisions of Sections 1.2(c) and 1.2(d) hereof (regarding withholding of the Escrow Amount in the Escrow Fund), Section 2.6 (regarding Dissenting Shares) and Article 9 hereof (regarding indemnification and potential forfeiture of the Escrow Amount)), be converted by reason of the Merger, as follows:

2. 4. 1. Series G Preferred Stock . At the Effective Time, each share of Series G Preferred Stock that is issued and outstanding immediately prior to the Effective Time (other than any such share for so long as it is a Dissenting Share) shall, by virtue of the Merger and without the need for any further action on the part of the holder thereof (except as expressly provided herein), be converted automatically into and represent the right to receive an amount of cash (without interest) equal to the Series G Cash Amount Per Share (subject, without limitation, to the withholding of the Escrow Amount). It is acknowledged and agreed that the amount of cash each Series G Holder is entitled to receive for the shares of Series G Preferred Stock held by such Series G Holder in any payment made hereunder shall be rounded to the nearest whole cent after aggregating all shares of Series G Preferred Stock held by such Series G Holder; and
      2. Other Capital Stock . At the Effective Time, each share of Series F Preferred Stock, Series E Preferred Stock, Series D Preferred Stock, Series C Preferred Stock, Series B-1 Preferred Stock and Common Stock that is issued and outstanding immediately prior to the Effective Time shall be cancelled and extinguished without any present or future right to receive any portion of the Net Merger Consideration or any other payment or consideration, there being insufficient funds to qualify for any distribution in accordance with the Company's certificate of incorporation and agreements entered into by and among the Company and the Stockholders.

                               v.             Treasury Stock . At and upon the Effective Time, each share of Company Capital Stock that is issued and outstanding and owned by the Company or any of its Subsidiaries immediately prior to the Effective Time will automatically be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor.

                              vi.             Generally . At and upon the Effective Time, all shares of Company Capital Stock that are issued and outstanding immediately prior to the Effective Time shall automatically cease to be issued and outstanding and will automatically be canceled and retired and will cease to exist, and each holder of a certificate representing such shares of Company Capital Stock will cease to have any rights with respect thereto, except any right to receive any Net Merger Consideration with respect to the shares of Series G Preferred Stock represented by such certificate that were issued and outstanding immediately prior to the Effective Time in accordance with the provisions of this Article 2.

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3. Conversion of Merger Sub Capital Stock . As of the Effective Time, each share of capital stock of the Merger Sub that is issued and outstanding immediately prior to the Effective Time will be converted into one (1) validly issued, fully-paid and non-assessable share of common stock, $0.0001 par value per share, of the Surviving Corporation, and the shares of the Surviving Corporation into which the shares of capital stock of the Merger Sub are so converted shall be the only shares of capital stock of the Surviving Corporation and the only securities of the Surviving Corporation that are issued and outstanding immediately after the Effective Time.

2.2   Options, Warrants and Other Rights to Acquire Company Capital Stock .

1. Options . No Options, whether vested or unvested, will be assumed by the Purchaser. Subject to the terms and conditions of this Agreement, at the Effective Time, each Option that is issued and outstanding immediately prior to the Effective Time will be duly, validly and entirely cancelled, terminated and extinguished in accordance with its terms, the terms of the Stock Option Plan and/or a written agreement (in form and substance reasonably satisfactory to the Purchaser) executed by each holder of such Option and delivered to the Company and the Purchaser, effective as of the Effective Time without any conversion thereof and without any present or future right of the holder thereof to receive any portion of the Net Merger Consideration or any other payment or consideration for or in respect of such Option, and each such Option shall cease to have any further force or effect upon the Effective Time. Prior to the Effective Time, (i) the Company shall cause each holder of Options to execute and deliver a written agreement (in form and substance reasonably satisfactory to the Purchaser) to effect the termination, cancellation and extinguishment of such Options in accordance with this Section 2.2(a) contingent upon, and by no later than, immediately prior to the Effective Time and (ii) the Company will provide any other required notices and obtain any necessary consents required under the Stock Option Plan, the Options, or any other agreement to effect the purposes and intent of this Section 2.2(a) and the termination of all outstanding Options at the Effective Time (the documentation required pursuant to the preceding clauses (i) and (ii) is collectively referred to herein as the " Option Termination Documentation ").
2. Warrants . No Warrants, whether vested or unvested, will be assumed by the Purchaser. Subject to the terms and conditions of this Agreement, at the Effective Time, each Warrant that is issued and outstanding immediately prior to the Effective Time will be duly, validly and entirely cancelled, terminated and extinguished in accordance with its terms and/or the terms of a written agreement (in form and substance reasonably satisfactory to the Purchaser) executed by the holder of such Warrant and delivered to the Company and the Purchaser, effective as of the Effective Time without any conversion thereof and without any present or future right of the holder thereof to receive any portion of the Net Merger Consideration or any other payment or consideration, and each such Warrant shall cease to have any further force or effect upon the Effective Time. Prior to the Effective Time, (i) the Company will provide any notice or notices (subject to reasonable review by Purchaser) to each holder of Warrants as may be required under the terms of such Warrants to terminate all outstanding Warrants contingent upon, and by no later than, immediately prior to the Effective Time (except to the extent such Warrants are validly exercised by such holder prior to the Effective Time) and (ii) the Company shall cause each holder of Warrants to execute and deliver to the Company and the Purchaser such written agreements, in form and substance reasonably satisfactory to the Purchaser, as may be required to effect the cancellation, termination and extinguishment of such Warrants in accordance with this Section 2.2(b) contingent upon, and by no later than, immediately prior to the Effective Time (except to the extent such Warrants are validly exercised by such holder prior to the Effective Time) (the documentation required pursuant to the preceding clauses (i) and (ii) is collectively referred to herein as the " Warrant Termination Documentation ").

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3. Generally . The Company will take all actions necessary or appropriate so that: (i) at the Effective Time, all Options, Warrants and other securities that are, directly or indirectly, convertible into or exchangeable or exercisable for, Company Capital Stock and other rights to purchase or otherwise acquire Company Capital Stock will be cancelled, terminated and extinguished and the Stock Option Plan will be terminated, including without limitation entering into such Contracts with holders of Options and Warrants as are necessary to effect the cancellation, termination and extinguishment of all Options and Warrants as of the Effective Time and as are reasonably acceptable in form and substance to the Purchaser; (ii) the Stockholders will, on and after the Closing, have no right, title or interest in or to the Company, the Surviving Corporation or any securities of the Company or the Surviving Corporation (other than the right to receive any Net Merger Consideration they are entitled to receive as expressly provided in Section 2.1(b) of this Agreement), and (iv) no Person holding any securities of the Company prior to the Effective Time will have any option or other right to purchase or otherwise acquire any securities of the Purchaser, the Merger Sub or the Surviving Corporation by virtue of any such securities of the Company or any act or omission of the Company or its agents.

2.3   Management Liquidation Pool .

1. Subject to the provisions of this Section 2.3, upon the consummation of the Merger at the Effective Time, a pool of cash will be set aside for distribution to and among the Participating Employees in the aggregate amount equal to fifteen percent (15%) of the Liquidation Pool Base (such pool of cash, the " Management Liquidation Pool "). The " Liquidation Pool Base " means that amount equal to the Base Consideration minus the Closing Indebtedness.
2. No later than two Business Days prior to the Closing, the Company will deliver to the Purchaser a spreadsheet setting forth (A) the name, address and social security number of each employee of the Company who is entitled to participate in the Management Liquidation Pool pursuant to the terms of that certain Sixth Amended and Restated Investor Rights Agreement dated July 27, 2007, as amended (the " IRA ") (the " Participating Employees "), (B) the classification of each Participating Employee as a Level 1 Employee, Level 2 Employee, Level 3 Employee, Level 4 Employee or a Transitional Employee (C) the respective amounts payable to each such Participating Employee from the Management Liquidation Pool and such other information relevant thereto or which Purchaser may reasonably request (such spreadsheet, the " Management Liquidation Pool Allocation Schedule "). Upon receipt by the Purchaser and approval thereof (which will not be unreasonably withheld), the Management Liquidation Pool Allocation Schedule will be appended to this Agreement as Exhibit F hereto.
3. Each Participating Employee will be paid from the Management Liquidation Pool an amount of cash determined in accordance with the Management Liquidation Pool Allocation Schedule at the times and subject to the terms and conditions set forth in Section 2.3(c) of the Company Disclosure Schedule and Section 2.10.
4. Notwithstanding the foregoing, no Participating Employee shall be entitled to receive any payment pursuant to this Section 2.3 or in respect of the Management Liquidation Pool unless and until such Participating Employee has executed and delivered to the Purchaser a bonus, benefits waiver and release agreement substantially in the form attached hereto as Exhibit G (the " Waiver and Release Agreement "), pursuant to which such Participating Employee shall (i) affirmatively agree that the terms and conditions of the Management Liquidation Pool as set forth in this Section 2.3, including without limitation Section 2.3(c) of the Company Disclosure Schedule and the amounts payable to such Participating Employee as set forth in the Management Liquidation Pool Allocation Schedule, are agreed to and accepted by such Participating Employee, are and shall be binding on such Participating Employee and

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shall entirely supersede and replace any and all prior agreements and/or understandings, if any, of such Participating Employee with respect to such Participating Employee's participation in the Management Liquidation Pool pursuant to Section 4 of the IRA or otherwise, as applicable, and (ii) release and waive any claims that such Participating Employee may have against the Purchaser, the Surviving Corporation, the Company, the Merger Sub, and any of their respective officers, directors, employees and Affiliates arising out of the Merger, this Agreement or any of the Ancillary Agreements, except for (A) any payment due to such Participating Employee under (and in accordance with) the provisions of this Section 2.3 and (B) any payment due to such Participating Employee under the Special Employee Bonus Pool.

2.4   Exchange .

1. Exchange Procedures . The following exchange procedures will govern the exchange of the shares of Company Capital Stock at or following the Effective Time:

1. 1. Preliminary Merger Consideration Allocation Schedule . Attached hereto as Exhibit H-1 is a preliminary merger consideration allocation schedule prepared by the Company (the " Preliminary Merger Consideration Allocation Schedule ") which sets forth the preliminary allocation of the Net Merger Consideration and the Closing Payment among the Series G Holders and the preliminary calculation of the Net Merger Consideration and the Closing Payment. The Company and the Stockholder Representative expressly acknowledge that (A) the Preliminary Merger Consideration Allocation Schedule sets forth the contemplated allocation of the Net Merger Consideration and the Closing Payment and other payments payable in accordance with this Article 2, and (B) such allocation complies with and does not violate any provision of the Company's certificate of incorporation or bylaws or any other agreements entered into by or among the Company and the Stockholders, as in effect immediately prior to the Effective Time.
   2. Final Merger Consideration Allocation Schedule . No later than two (2) Business Days prior to the Closing, the Company will deliver to the Purchaser a spreadsheet setting forth (A) the name, address and social security number or Tax identification number of each Securityholder as of the Closing Date, (B) the number and kind of shares of Company Capital Stock held by, or subject to the Options or Warrants held by, such Securityholder as of immediately prior to the Effective Time and, in the case of outstanding shares, the respective stock certificate numbers, (C) the calculation of the Series G Cash Amount Per Share, the Escrow Amount, Fully-Diluted Company Series G Stock, Net Merger Consideration and the Closing Payment and a copy of the Closing Balance Sheet (as defined in Section 3.7), (D) the portion of the Net Merger Consideration and the Closing Payment payable to each Series G Holder in accordance with the provisions hereof as of the Closing Date on a gross basis and, with respect to any portion of the Closing Payment payable to employees or former employees of the Company, net of all amounts required to be withheld under applicable Tax or other Laws and (E) each Series G Holder's Pro Rata Share in the Escrow Fund (such spreadsheet, the " Final Merger Consideration Allocation Schedule "). Upon receipt by the Purchaser and approval thereof (which will not be unreasonably withheld), the Final Merger Consideration Allocation Schedule will be appended to this Agreement as Exhibit H-2 hereto and appended as an appropriately numbered exhibit to the Escrow Agreement.
   3. Transmittal Letter . As soon as practicable after the Effective Time but in no event later than five (5) Business Days thereafter, the Purchaser will mail to each Series G Holder, at such Series G Holder's address set forth on the Final Merger Consideration Allocation Schedule, the following: (A) a letter of transmittal in a form reasonably acceptable to the Company (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of such Certificates to the Purchaser and shall be in such form and have such other provisions as

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the Purchaser may reasonably specify and contain an agreement to be bound by the indemnification provisions hereof) (the " Transmittal Letter "); (B) an IRS Form W-8 and Form W-9 and (C) instructions for effecting the surrender of the Certificates (as defined herein) in exchange for the portion of the Net Merger Consideration payable with respect thereto.

2. 4. Exchange of Certificates; Payment to Series G Holders . Upon surrender of (A) a certificate or certificates after the Effective Time which immediately prior to the Effective Time represented any shares of Series G Preferred Stock (each a " Certificate ") (or an effective affidavit of loss required by Section 2.4(b)), together with a duly executed Transmittal Letter and any required Form W-9 or Form W-8 (collectively, the " Transmittal Documentation "), to the Purchaser, the holder of such Certificate will be entitled to receive, in exchange therefor, and the Purchaser shall pay, that portion of the Closing Payment that such holder has the right to receive in respect of such holder's shares of Series G Preferred Stock represented by such surrendered Certificate(s) that were outstanding immediately prior to the Effective Time pursuant to the provisions of this Article 2, all as set forth in the Final Merger Consideration Allocation Schedule, subject to any required Tax withholding, and the surrendered Certificate will immediately be cancelled.

3. Lost, Stolen or Destroyed Certificates . In the event that any Certificates have been lost, stolen or destroyed, the Purchaser may, in its discretion and as a condition precedent to the payment of any Net Merger Consideration in respect thereof, require the owner of such lost, stolen or destroyed Certificate (i) to provide an affidavit of such loss, theft or destruction in a form reasonably satisfactory to the Purchaser and any additional documentation reasonably requested by the Purchaser, (ii) to execute a customary agreement reasonably acceptable in form and substance to the Purchaser, pursuant to which such owner shall agree with the Purchaser to indemnify and hold harmless the Purchaser Indemnified Parties (as defined herein) from and against any claim that may be made against the Purchaser Indemnified Parties with respect to the Certificates alleged to have been lost, stolen or destroyed and (iii) to provide a sufficient indemnity bond in form, substance and amount satisfactory to the Purchaser.
4. Dissenting Shares . The provisions of this Section 2.4 will also apply to Dissenting Shares that lose their status as such, except that the obligations of the Purchaser under this Section 2.4 will commence on the date of loss of such status and the holder of such shares will be entitled to receive in exchange for such shares the Net Merger Consideration to which such holder is entitled pursuant to Section 2.1(b).
5. No Further Ownership Rights in Company Capital Stock . Any Net Merger Consideration, payments paid or issued upon the surrender of Certificates in accordance with the terms hereof will be deemed to be in full satisfaction of all rights pertaining to such Certificates and there will be no further registration of transfers on the records of the Surviving Corporation of shares of Company Capital Stock which were outstanding immediately prior to the Effective Time.

2.5   Escheat . Neither the Purchaser nor the Surviving Corporation will be liable to any former holder of Company Capital Stock for any portion of the Net Merger Consideration delivered to any public official pursuant to any applicable abandoned property, escheat or similar law. In the event any Certificate has not been surrendered for exchange prior to the second (2nd) anniversary of the Closing Date, or prior to such earlier date as of which such Certificate or the Net Merger Consideration payable upon the surrender thereof would otherwise escheat to or become the property of any Governmental Authority, then the Net Merger Consideration otherwise payable upon the surrender of such Certificate

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will, to the extent permitted by applicable Law, become the property of the Surviving Corporation, free and clear of all rights, interests and adverse claims of any person.

2.6   Dissenter's Rights . Notwithstanding anything in this Agreement to the contrary, any shares of Company Capital Stock outstanding immediately prior to the Effective Time and held by a holder who has properly exercised the holder's appraisal rights in accordance with Section 262 of the DGCL or any successor provision, or other applicable Law providing for dissenting stockholders' appraisal rights (" Dissenting Shares ") will not be converted into, or represent the right to receive, any of the Net Merger Consideration (including without limitation any part of the Closing Payment or the Escrow Amount), unless and until such holder fails to perfect or effectively withdraws or otherwise loses such holder's right to appraisal and payment under the DGCL, or such other applicable Law. If, after the Effective Time, any such holder fails to perfect or effectively withdraws or loses his right to appraisal, then such Dissenting Shares will thereupon be treated as if they had been converted as of the Effective Time as provided in Section 2.1(b) into the right to receive the Net Merger Consideration to which such holder is entitled in respect of such shares of Series G Preferred Stock under Section 2.1(b) of this Agreement (if any), without interest or dividends thereon, upon the surrender of the Certificate(s) which formerly represented such Dissenting Shares, in the manner provided in Section 2.4; provided that only holders of such former Dissenting Shares that were shares of Series G Preferred Stock that were issued and outstanding immediately prior to the Effective Time will be entitled to receive any Net Merger Consideration and will only be entitled to receive any Net Merger Consideration that, under the provisions of Section 2.1(b) hereof, is payable with respect to such shares of Series G Preferred Stock that were issued and outstanding, and held by such holder, immediately prior to the Effective Time. The Company will give the Purchaser (a) prompt notice of any demands received by the Company for appraisal of shares of Company Capital Stock, attempted withdrawals of such demands and any other instrument served pursuant to the DGCL, or other applicable Law, and received by the Company relating to Stockholders' rights of appraisal, and (b) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the DGCL, or other applicable Law. The Company will not voluntarily make any payment with respect to, or settle or offer to settle, any such demand for payment, except with the prior written consent of the Purchaser.

2.7   Pre-Closing Adjustment to Net Merger Consideration .

1. Closing Adjustment Certificate . No later than three (3) Business Days prior to the Closing Date, the Company will prepare and deliver to the Purchaser a certificate setting forth the Company's itemized calculation of the amount of each of (A) the Net Merger Consideration, (B) the total amount of all Closing Indebtedness (along with the names, address and (if applicable) wire transfer information of each Person to whom any Closing Indebtedness is owed, specifying the amount of the Closing Indebtedness owed to each such Person), (C) the total amount of all Closing Expenses (along with the names, address and (if applicable) wire transfer information of each Person to whom any Closing Expenses are owed, specifying the amount of the Closing Indebtedness owed to each such Person), (D) the Purchaser Closing Loan Balance, (E) the maximum amount payable under the Special Employee Bonus Pool, (F) the Excess Company Closing Liabilities and (G) any payments made by the Company after August 4, 2008 in respect of any of the items set forth in (B) through (E) hereof (the " Closing Adjustment Certificate ").
2. Payment .

2. 1. On the Closing Date, Purchaser will pay in cash from the Net Merger Consideration the Closing Indebtedness and the Closing Expenses to the Persons to whom the Closing

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Indebtedness and the Closing Expenses are owed as specified in, and in the amounts set forth on, the Closing Adjustment Certificate.

3. 2. Upon the Effective Time, the Purchaser Loans shall be deemed repaid in full to the Purchaser by the application of the Purchaser Closing Loan Balance to reduce the Net Merger Consideration (as provided in Section 2.1(a)(iii) hereof), and any and all securities, agreements and instruments evidencing the Purchaser Loans shall be deemed satisfied, cancelled and terminated.
   3. The Purchaser will pay or cause the Company to pay the Special Employee Bonus Pool as and when such payment becomes due in accordance with the terms of the Special Employee Bonus Pool, as set forth in Section 3.9 of the Company Disclosure Schedule.

2.8   Post-Closing Adjustment to Escrow Fund . The Escrow Fund may be reduced from time to time in accordance with the provisions of Article 9 of this Agreement. On the date that is one (1) year after the Closing Date (or if such date is not a Business Day, on the next Business Day thereafter) (the " First Release Date "), the Escrow Agreement will provide that the Escrow Agent will, within ten (10) Business Days of the First Release Date, pay to the Series G Holders who have delivered the Transmittal Documentation (or the documentation required by Section 2.4(b)) in accordance with Section 2.4, and on the basis of their respective Pro Rata Shares thereof as set forth in the Final Merger Consideration Allocation Schedule, an amount of the Escrow Fund equal to (a) fifty percent (50%) of the original Escrow Amount minus the sum of (i) all amounts previously paid, awarded to, or agreed pursuant to a settlement to be paid to, Purchaser Indemnified Parties on account of any and all Indemnification Claims pursuant to Article 9 hereof, (ii) all then Reserved Escrow Funds and (iii) all interest accrued on the Escrow Amount. On the date that is eighteen (18) months from the Closing Date (or if such date is not a Business Day, on the next Business Day thereafter) (the " Final Release Date "), the Escrow Agent will, within ten (10) Business Days of the Final Release Date, pay to the Series G Holders who have delivered the Transmittal Documentation (or the documentation required by Section 2.4(b)) in accordance with Section 2.4, and on the basis of their respective Pro Rata Shares thereof as set forth in the Final Merger Consideration Allocation Schedule, an amount equal to the entire remaining balance of the Escrow Fund (including all interest accrued on the Escrow Amount) not previously paid to the Purchaser or Purchaser Indemnified Parties minus the amount of all then Reserved Escrow Funds. To the extent the Purchaser has made an Indemnification Claim pursuant to a Claim Notice that is pending and not finally resolved under Article 9 hereof on the First Release Date or the Final Release Date, the release of all or a portion of the Escrow Fund then to be released will be postponed until the earlier of (i) the Settlement Date relating to such pending Indemnification Claim or (ii) the date such pending Indemnification Claim is deemed to be an Abandoned Claim (and the amount of the Escrow Fund the release of which will be postponed (" Reserved Escrow Funds ") will be the maximum potential amount of Losses for which the Purchaser and any other Purchaser Indemnified Parties may be liable or may pay, suffer or incur arising from the facts and circumstances specified in all then pending Claim Notices for Indemnification Claims under Article 9 that have not then been finally resolved).

2.9   Taking of Necessary Action; Further Action . If, at any time after the Effective Time, the Purchaser reasonably believes or is advised that any further instruments, deeds, assignment, assurances or any other action are necessary or desirable to consummate the Merger or to carry out the purposes and intent of this Agreement at or after the Effective Time and to vest the Purchaser with control over, and to vest the Surviving Corporation with full right, title and possession to, all assets, property, rights, privileges, powers and franchises of the Company, then the Company, the Purchaser, the Surviving Corporation and their respective officers and directors shall execute and deliver all such proper deeds, assignments,

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instruments and assurances and do all other things reasonably necessary or desirable to consummate the Merger and to carry out the purposes and intent of this Agreement.

2.10   Taxes . Notwithstanding any other provision of this Agreement, the Purchaser will have the right to withhold all Taxes from payments to be made hereunder (including without limitation any payments in connection with the Escrow Agreement) if such withholding is required by Law, and to collect Forms W-8 or W-9 or other forms from the Stockholders or any other Person entitled to any payment under this Agreement to the extent required by any foreign, federal, state or local laws and to remit such withheld amounts over to the proper Governmental Authority. 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 Securityholder in respect of whom such deduction and withholding was made.

2.11   Tax Consequences and Withholding . The parties intend that the Merger shall be treated as a Taxable purchase of securities of the Company pursuant to the Code. However, the Purchaser makes no representations or warranties to the Company or to any Securityholder regarding (i) the Tax treatment of the Merger or (ii) any of the Tax consequences to the Company or any Securityholder of this Agreement, the Merger or any of the other transactions or agreements contemplated hereby. The Company and, by virtue of the Stockholders approving the Merger, this Agreement and the other transactions or agreements contemplated hereby, the Stockholders, acknowledge that the Company and the Stockholders are relying solely on their own Tax advisors in connection with the Merger, this Agreement and the other transactions or agreements contemplated hereby.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Purchaser and the Merger Sub that, as of the date of this Agreement and as of the Closing Date, the statements set forth in this Article 3 are and shall be true and correct, except as otherwise expressly set forth in the disclosure schedule attached hereto as Exhibit I (the " Company Disclosure Schedule "). The Company Disclosure Schedule will be arranged in sections and paragraphs corresponding to the numbered and lettered sections and paragraphs contained in this Article 3, and the disclosure in any section or paragraph will qualify only (a) the corresponding section or paragraph in this Article 3 and (b) the other sections and paragraphs in this Article 3 to the extent that it is reasonably apparent from a reading of such disclosure that it also qualifies or applies to such other sections and paragraphs. The exceptions, disclosures and other statements contained in the Company Disclosure Schedule shall be deemed to be representations and warranties made by the Company under this Article 3.

3.1   Corporate Matters .

1. The Company . The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties and assets and to conduct its business as presently conducted or as planned to be conducted by the Company. The Company is duly qualified or licensed to conduct business and, where applicable as a legal concept, is in corporate and Tax good standing as a foreign corporation, in each jurisdiction in which the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except where the Company's failure to be so qualified and in good standing, considered individually or in the aggregate with any such other failures, would not reasonably be expected to have a Material Adverse Effect. Section 3.1(a) of the Company Disclosure Schedule sets forth an accurate and complete list of each of the

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jurisdictions in which the Company is qualified or licensed to conduct business, and a complete, and accurate list of the current directors and officers of the Company and its Subsidiary. The Company has made available to the Purchaser accurate and complete copies of the certificate of incorporation and bylaws of the Company, each as amended to date and currently in effect, and the Company is not in default thereunder or in violation of any provision thereof.

2. Subsidiary . The Company's only Subsidiary is Aristos Logic Technology India Private Limited, a corporation organized under the laws of India (the " Indian Subsidiary "), and the Company does not own or control, directly or indirectly, any stock, equity, participation or similar ownership or other interest in any other corporation, partnership, limited liability company, joint venture, trust, or other business association or unincorporated association and is not obligated to make, nor is it bound by any agreement or obligation to make, any investment in, or capital contribution in or on behalf of, any other Person If, notwithstanding the foregoing, the Company now or at any time prior to the Effective Time should have another Subsidiary (other than the Indian Subsidiary) then all representations and warranties contained in this Section 3.1(b) regarding the Indian Subsidiary shall also apply (and be deemed to be made by the Company with respect to) each such other Subsidiary, to the maximum extent applicable. The Indian Subsidiary is a company duly organized and validly existing under the laws of India. The Indian Subsidiary is duly qualified or licensed to conduct business in, and is in corporate and Tax good standing under the laws of, each jurisdiction in which the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, each of which jurisdictions is listed in Section 3.1(b) of the Company Disclosure Schedule. The Indian Subsidiary has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. The Company has made available to the Purchaser correct and complete copies of the memorandum and articles of association and any other comparable charter or organizational documents of the Indian Subsidiary, each as amended to date. and currently in effect, and the Indian Subsidiary is not in default thereunder or in violation of any provision thereof. Except as set forth in Section 3.1(b) of the Company Disclosure Schedule, all of the issued and outstanding shares of capital stock of the Indian Subsidiary are owned solely and exclusively by the Company and are duly authorized, validly issued, fully paid and non-assessable. All of the shares of the capital stock of the Indian Subsidiary are held of record or owned beneficially by the Company free and clear of any restrictions on transfer (other than restrictions under the Securities Act and applicable Law), claims, security interests, mortgages, hypothecations, options, warrants, rights, contracts, calls, commitments, equities, rights of first refusal, preemptive rights, encumbrances and demands. There are no outstanding or authorized options, warrants, calls, rights, commitments, conversion privileges or preemptive or other rights or agreements entitling any Person to purchase or otherwise acquire from the Company or the Indian Subsidiary any shares of capital stock or any other securities of the Indian Subsidiary or any securities or debt convertible into, or exchangeable for, capital stock or other securities of the Indian Subsidiary or obligating the Company or the Indian Subsidiary to grant, extend or enter into any such option, warrant, call, right, commitment, conversion privilege or preemptive or other right or agreement. There are no outstanding stock appreciation, phantom stock or similar rights with respect to the Indian Subsidiary. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of any capital stock of the Indian Subsidiary. The Indian Subsidiary does not own any assets or have any employees. The Indian Subsidiary has not filed an election to change its default classification for U.S. Tax purposes. The Indian Subsidiary has timely filed all forms, reports, certificates and other documents in connection with the issuance of shares in the Indian Subsidiary to the Company as may be required to be filed with the Reserve Bank of India (" RBI "), including without limitation a report on Form FC-GPR.

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3.2   Authority and Enforceability . The Company has all requisite corporate power and authority to enter into, execute and deliver this Agreement and each of the Company Ancillary Agreements to which the Company is a party and to perform the Company's obligations under this Agreement and each such Company Ancillary Agreement. The execution, delivery and performance of this Agreement and the Company Ancillary Agreements by the Company have been duly authorized by all necessary action (including without limitation action on the part of the Company's board of directors) on the part of the Company subject only to approval of this Agreement and the Merger by (w) the holders of a majority of the votes represented by the outstanding shares of Company Capital Stock entitled to vote on this Agreement and the Merger, voting as a single class, (x) the holders of at least a majority of the then outstanding shares of the Company's Common Stock , voting as a single class, (y) the holders of a majority of the then outstanding shares of the Company's Preferred Stock, voting as a single class, and (z) any other vote or approval of the Stockholders required by the DGCL or the CGCL, in each case at a meeting duly called, noticed and held, or by written consent, in compliance with all applicable requirements of the DGCL, CGCL, other applicable Law and the Company's Certificate of Incorporation and Bylaws, each as amended (the approval referenced in clauses (x) (y) and (z) the " Requisite Stockholder Approval "). Without limiting the foregoing, the board of directors of the Company, at a meeting thereof duly called, noticed and held at which a quorum was at all times present, has duly adopted resolutions by the requisite majority vote required by the DGCL, CGCL, other applicable Law, the Company's Certificate of Incorporation and Bylaws, each as amended approving this Agreement, the Merger and the other transactions contemplated by this Agreement, determining that the terms and conditions of this Agreement, the Merger and the other transactions contemplated by this Agreement are fair to, and in the best interests of, the Company and its Stockholders and are advisable and recommending that the Company's Stockholders adopt and approve this Agreement and the Merger. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by each of the other parties to the Agreement, constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the effect of (a) laws of general application relating to bankruptcy, insolvency, and the relief of debtors, and (b) rules of law governing specific performance, injunctive relief and other equitable remedies. Upon the execution and delivery by the Company of each of the Company Ancillary Agreements to which the Company is a party and assuming the due authorization, execution and delivery by each of the other parties to each Company Ancillary Agreement, such Company Ancillary Agreements will constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, subject to the effect of (a) laws of general application relating to bankruptcy, insolvency, and the relief of debtors, and (b) rules of law governing specific performance, injunctive relief and other equitable remedies.

3.3   No Conflict; No Consents .

1. No Conflict . Neither the execution and delivery of this Agreement, nor the consummation or performance of the Merger or any of the other transactions contemplated by this Agreement, will directly or indirectly (with or without notice, lapse of time or both) conflict with, result in a breach or violation of, constitute a default (or give rise to any right of termination, cancellation, acceleration, suspension or modification of any obligation or loss of any benefit) under, constitute a change in control under, result in any payment becoming due under, result in the imposition of any Encumbrances on any of the Company Capital Stock, any stock or other security of any Company Subsidiary or any of the properties or assets of the Company or any Company Subsidiary under, or otherwise give rise to any right on the part of any Person to exercise any remedy or obtain any relief under (i) the certificate of incorporation or bylaws of the Company, or the certificate of incorporation or bylaws or other comparable charter or organizational documents of any Company Subsidiary, or any resolution adopted by the

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stockholders or board of directors of the Company, in each case as amended to date, (ii) any Governmental Authorization or Contract to which the Company or any Company Subsidiary is a party or by which the Company or any Company Subsidiary is bound or to which any of their respective properties or assets is subject (including without limitation the IRA) or (iii) any Law or Judgment applicable to the Company, any Company Subsidiary or any of their respective properties or assets.

2. No Consent . Except as set forth in Section 3.3(b) of the Company Disclosure Schedule, no consent, approval, order, permit, license, ratification, authorization, Governmental Authorization, release or waiver of, or registration, declaration or filing with, any Governmental Authority or any other Person (governmental or otherwise), is necessary or required by Law, Contract or otherwise, to be made or obtained by the Company or any Company Subsidiary to enable the Company to lawfully execute and deliver, enter into, and perform its obligations under this Agreement and each of the Company Ancillary Agreements or to consummate the Merger (including the consent of any Person required to be obtained in order to keep any Contract between such Person and the Company or any Company Subsidiary in effect following the Merger or to provide that the Company or any Company Subsidiary is not in breach or violation of any such Contract following the Merger), except for (i) the filing of the Certificate of Merger with the Delaware Secretary of State and (ii) the Requisite Stockholder Approval.

3.4   Capitalization and Ownership .

1. Schedule of Securities . Section 3.4(a) of the Company Disclosure Schedule sets forth, as of the date hereof, a complete and accurate list of (a) all Stockholders, indicating the number of outstanding shares of each class and series of Company Capital Stock held by each Stockholder, and (b) all outstanding options to purchase shares of Company Capital Stock pursuant to the Stock Option Plan or otherwise (" Options ") and all outstanding warrants to purchase shares of Company Capital Stock (" Warrants "), indicating (i) the holder thereof, (ii) the number of shares and class or series of Company Capital Stock subject to each Option and Warrant, (iii) the exercise price, date of grant, vesting schedule (including, without limitation, early exercise rights, if any) and expiration date for each Option or Warrant, and any applicable status as an incentive stock option or nonqualified stock option, and (iv) a summary of any terms regarding the acceleration of vesting or net issue exercise, (v) whether such Option was granted under the Stock Option Plan.
2. Capital Stock . The authorized capital stock of the Company consists entirely of (i) 608,190,474 shares of common stock, par value $0.0001 (" Common Stock "), of which 55,647,409 shares are issued and outstanding as of the Agreement Date and (ii) 469,294,673 shares of preferred stock, par value $0.0001 (" Preferred Stock "), of which 50,241,935 shares are designated as Series B-1 Preferred Stock (" Series B-1 Preferred Stock "), par value $0.0001, of which 50,000,000 are issued and outstanding as of the Agreement Date, 93,484,207 shares are designated as Series C Preferred Stock (" Series C Preferred Stock "), par value $0.0001, of which 89,813,578 are issued and outstanding as of the Agreement Date, 54,568,530 shares are designated as Series D Preferred Stock (" Series D Preferred Stock "), par value $0.0001, of which 51,184,434 are issued and outstanding as of the date hereof, 61,000,000 shares are designated as Series E Preferred Stock (" Series E Preferred Stock "), par value $0.0001, of which 46,400,000 are issued and outstanding as of the Agreement Date, 55,000,000 shares are designated as Series F Preferred Stock (" Series F Preferred Stock "), par value $0.0001, of which 30,615,319 are issued and outstanding as of the Agreement Date and 65,000,000 shares are designated as Series G Preferred Stock (" Series G Preferred Stock "), par value $0.0001, of which 57,523,188 are issued and outstanding as of the Agreement Date and 90,000,001 shares of Preferred Stock are undesignated and neither issued nor outstanding as of the Agreement Date and the Closing Date. Each share of Series B-1 Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock and

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Series G Preferred Stock is convertible into exactly one (1) share of Common Stock and is entitled to exactly one (1) vote per share. Each share of the Company's Common Stock is entitled to exactly one (1) vote per share.

3. Options . The Company has reserved an aggregate of 96,142,701 shares of Company Common Stock for issuance pursuant to the Stock Option Plan (including shares subject to outstanding Company Options). A total of 89,954,115 shares of Company Common Stock are (i) subject to outstanding Options as of the Agreement Date and (ii) will be subject to outstanding Options as of immediately prior to the Effective Time, except for Company Options that, during the time period beginning on the Agreement Date and ending on the Closing Date, are exercised in accordance with their terms in accordance with the terms of this Agreement or are terminated. True and correct copies of the Stock Option Plan, the standard agreement under the Stock Option Plan, each agreement for each Option that does not conform to the standard agreement under the Stock Option Plan and each Company Warrant have been delivered by the Company to the Purchaser's legal counsel. The terms of the Stock Option Plan permit the termination of all outstanding Options granted thereunder in the Merger as provided in this Agreement, without the consent or approval of the holders of such Options, the Company Stockholders or otherwise, and all notices or other actions required under the Stock Option Plan to effect and permit the termination of all Option in the Merger have been duly give, made or taken. All of the Options will terminate or be terminated and be of no further force or effect at or immediately prior to the Effective Time, and none of the Company, the Purchaser, the Merger Sub or the Surviving Corporation will, thereafter, have any Liability or obligation, including any obligation to pay any Net Merger Consideration with respect thereto, except as expressly provided in this Agreement.
4. Warrants . A total of 26,651,445 shares of Common Stock, 241,935 shares of Series B-1 Preferred Stock, 3,670,629 shares of Series C Preferred Stock, 3,384,096 shares of Series D Preferred Stock, 600,000 shares of Series E Preferred Stock, 2,866,667 shares of Series F Preferred Stock and 803,500 shares of Series G Preferred Stock are subject to outstanding Warrants (i) as of the Agreement Date and (ii) will be subject to outstanding Warrants as of immediately prior to the Effective Time, except for Warrants that, during the time period beginning on the Agreement Date and ending on the Closing Date, are exercised in accordance with their terms or are terminated. True and correct copies of all outstanding Warrants have been delivered by the Company to the Purchaser's legal counsel. All of the Warrants will terminate or be terminated and be of no further force or effect at or immediately prior to the Effective Time, and none of the Company, the Purchaser, the Merger Sub or the Surviving Corporation will, thereafter, have any Liability or obligation, including any obligation to pay any Net Merger Consideration with respect thereto, except as expressly provided in this Agreement.
5. Valid Issuance . All of the issued and outstanding shares of Company Capital Stock are, and all shares of Company Capital Stock that may be issued upon exercise of Options or Warrants will be (upon issuance in accordance with their terms), duly authorized, validly issued, fully paid, nonassessable and free of all preemptive rights. All of the issued and outstanding shares of Company Capital Stock which may previously have been subject to a right of repurchase in favor of the Company or any other Person, or otherwise subject to "vesting" provisions are fully vested by lapse of time and no longer subject to any repurchase right, without regard to any acceleration in connection with the Merger. Other than the Options and Warrants disclosed in this Section 3.4 and listed in Section 3.4(a) of the Company Disclosure Schedule, as of the Agreement Date, there are no outstanding or authorized options, warrants, rights, agreements or commitments to which the Company is a party or which are binding upon the Company providing for the issuance or redemption of any shares of Company Capital Stock, no conversion privileges or preemptive or other rights or Contracts outstanding entitling any Person to, directly or indirectly, purchase or otherwise acquire any shares of Company Capital Stock and no

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outstanding securities or debt convertible into or exchangeable for Company Capital Stock or obligating the Company to grant, extend or enter into any such option, warrant, call, right, commitment, conversion privilege, convertible or exchangeable debt or preemptive or other right or Contract. No holder of Indebtedness of the Company has any right to convert or exchange such Indebtedness for Company Capital Stock. There are no outstanding or authorized stock appreciation, phantom stock, restricted stock units or similar rights with respect to the Company or any Company Subsidiary.

6. Certain Agreements . Except as set forth and described in Section 3.4(f) of the Company Disclosure Schedule, there are no agreements to which the Company is a party or by which it is bound with respect to the voting (including, without limitation, voting trusts or proxies), registration under the Securities Act of 1933, as amended, or any foreign securities law, or sale or transfer (including, without limitation, agreements relating to preemptive rights, rights of first refusal, co-sale or "tag-along" rights or "drag-along" rights) of any securities of the Company. To the Knowledge of the Company, there are no agreements among other parties to which the Company is not a party and by which it is not bound, with respect to the voting (including, without limitation, voting trusts or proxies) or sale or transfer (including, without limitation, agreements relating to rights of first refusal, co-sale or "tag-along" rights or "drag- along" rights) of any securities of the Company.
7. Compliance with Securities Laws . All of the issued and outstanding shares of Company Capital Stock, Options and Warrants were issued in compliance with applicable federal and state securities laws, including without limitation the Securities Act of 1933, as amended, and the California Corporate Securities Law of 1968, as amended and are not subject to any right of rescission, right of first refusal or preemptive right.
8. No Outstanding Securities . As of the Effective Time, (i) there shall be no outstanding shares of Company Capital Stock (other than those shares of common stock of the Surviving Corporation held by the Purchaser as a result of the conversion of the outstanding shares of Merger Sub pursuant to Section 2.1(c) hereof) and (ii) there shall be no other outstanding securities, Warrants, Options, commitments or agreements of the Company that purport to obligate the Company to issue, or give the right to any other Person to purchase or otherwise acquire, any shares of Company Capital Stock, Options, Warrants or any other securities under any circumstances.

3.5   Financial Statements and Controls .

1. Financial Statements . Attached as Section 3.5(a) of the Company Disclosure Schedule are the following financial statements of the Company (collectively, the " Financial Statements "): (a) audited balance sheets of the Company as of September 30, 2005, September 30, 2006 and September 30, 2007 (such audited balance sheet as of September 30, 2007, the " Balance Sheet ") and the Company's related audited statements of income, changes in stockholders' equity and cash flow for each of the fiscal years ended September 30 2005, September 30, 2006 and September 30, 2007, including in each case any notes thereto, together with the report thereon (as applicable) of Pricewaterhouse Coopers LLP and Ernst & Young LLP, independent certified public accountants; and (b) an unaudited balance sheet of the Company as of July 31, 2008 (the " Interim Balance Sheet ") and the related unaudited statements of income, changes in stockholders' equity and cash flow for the ten months ended July 31, 2008. The Financial Statements (including the notes thereto) are consistent with the books and records of the Company and have been prepared in accordance with GAAP, consistently applied throughout the periods involved (except for the absence of notes in unaudited Financial Statements that, if presented, would not differ materially from the notes to the audited Financial Statements). The Financial Statements fairly present the financial condition and the results of operations, changes in stockholders' equity and cash flow

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of the Company as of the respective dates and for the periods indicated therein. The Financial Statements complied as to form in all material respects with applicable accounting requirements with respect thereto as of their respective dates. All reserves established by the Company that are set forth in or reflected in the Financial Statements have been established in accordance with GAAP. At the date of the Interim Balance Sheet Date, there were no material loss contingencies (as such term is used in Statement of Financial Accounting Standards No. 5 issued by the Financial Accounting Standards Board in March 1975) that are not adequately provided for in the Interim Balance Sheet as required by said Statement No. 5.

2. Internal Controls . The Company has established and maintains a system of internal accounting controls sufficient to provide reasonable assurances: (a) that transactions, receipts and expenditures of the Company and its Subsidiaries are being executed and made only in accordance with appropriate authorizations of management and the Board of Directors of Company; and (b) that transactions are recorded as necessary (1) to permit preparation of financial statements in conformity with GAAP and (2) to maintain accountability for assets, (3) regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of Company and its Subsidiaries, and (4) that the amount recorded for assets on the books and records of the Company is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has no significant deficiencies or material weaknesses in the design or operation of Company's internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data. Neither the Company nor, to the Company's knowledge, any director, officer, employee, auditor, accountant or representative of the Company has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, in each case, regarding deficient accounting or auditing practices, procedures, methodologies or methods of the Company or its internal accounting controls or any material inaccuracy in the Company's financial statements. Neither the Company nor the Company's independent auditors, nor to the Company's knowledge, any current or former employee, consultant or director of Company or any Company Subsidiary, has identified or been made aware of any fraud, whether or not material, that involves Company's management or other current or former employees, consultants directors of Company or any Company Subsidiary who have a role in the preparation of financial statements or the internal accounting controls utilized by the Company or any Company Subsidiary, or any claim or allegation regarding any of the foregoing. No attorney representing the Company or any Company Subsidiary, whether or not employed by the Company or any Company Subsidiary, has reported to the Board of Directors of the Company or any committee thereof or to any director or officer of the Company evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents. There has been no change in the Company accounting policies since the Company's inception, except as described in the Financial Statements.

3.6   Books and Records . The books of account, minute books, stock record books and other records of the Company, all of which have been made available to the Purchaser, are accurate and complete and have been maintained in accordance with sound business practices. At the Effective Time, all such books and records will be in the possession of the Company. The minute books of the Company contain accurate and complete records of all meetings held of, and corporate action taken by, the Company's stockholders, directors and directors' committees since May 3, 2005, and of the Company's predecessor Aristos Logic Corporation, a California corporation (" Predecessor ") since its inception date of February 18, 2000, and no such meeting since February 18, 2000 (in the case of the Predecessor) or May 3, 2005 (in the case of the Company) has been held for which minutes have not been prepared and are not contained in such minute books.

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3.7   Accounts Receivable; Bank Accounts .

1. All notes and accounts receivable are reflected properly on the Balance Sheet, the Interim Balance Sheet and the unaudited balance sheet of the Company as of the close of business on the Closing Date (the " Closing Balance Sheet "), and represent or will represent bona fide valid obligations arising from sales actually made or services actually performed in the ordinary course of business. Such notes and accounts receivable will as of the Closing Date be current and collectible, net of the respective reserve shown in the corresponding line items on the Balance Sheet, the Interim Balance Sheet, or the Closing Balance Sheet, as the case may be. Allowances for doubtful accounts and warranty returns have been prepared in accordance with GAAP consistently applied and in accordance with the Company's and its Subsidiaries' past practices and, to the Knowledge of the Company, are sufficient to provide for any losses which may be sustained on realization of the receivables. There is no contest, claim, counterclaim, defense or right of setoff, other than returns in the ordinary course of business, relating to the amount or validity of such note or account receivable. Section 3.7(a) of the Company Disclosure Schedule sets forth an accurate and complete list and the aging of all notes and accounts receivable as of the date of the Interim Balance Sheet. None of the accounts receivable of the Company are subject to asserted warranty or similar claims made by customers within the last year.
2. Section 3.7(b) of the Company Disclosure Schedule contains an accurate, correct and complete list of the names and addresses of all banks, commercial lending institutions and other financial institutions in which the Company has an account, deposit, safe-deposit box, line of credit or other loan facility or relationship, or lock box or other arrangement for the collection of accounts receivable, with the names of all Persons authorized to draw or borrow thereon or to obtain access thereto.

3.8   Inventories . Except as has been reserved against in accordance with GAAP on the Interim Balance Sheet and the Closing Balance Sheet, all of the inventory of the Company reflected on the Interim Balance Sheet was properly stated therein at standard cost determined in accordance with GAAP consistently maintained and applied by the Company and was, and all the inventory thereafter acquired and maintained by the Company through the Closing Date will have been, acquired and maintained in the ordinary course of business.

3.9   No Undisclosed Liabilities . The Company and its Subsidiaries have no Liability except for: (a) Liabilities accrued or expressly reserved for in line items on the Interim Balance Sheet; (b) Liabilities incurred after the date of the Interim Balance Sheet in the ordinary course of the Company's business consistent with its past practices, that (i) do not result from any breach of Contract, tort or violation of law, (ii) are not required to be set forth in the Interim Balance Sheet under GAAP, and (iii) would not be reasonably likely to have a Material Adverse Effect on the Company; (c) Liabilities expressly disclosed in this Agreement or the Company Disclosure Schedule including, without limitation, those set forth on Section 3.9 of the Company Disclosure Schedule; (d) Liabilities of the nature which are not required to be disclosed in a balance sheet prepared in accordance with GAAP and which are incurred in the ordinary course of the Company's business consistent with its past practices; (e) any Liability for any Purchaser Loan; and (f) any Liability for Closing Expenses.

3.10   Absence of Certain Changes and Events . Since the date of the Balance Sheet, (a) there has not been any Material Adverse Change to the Company, nor has there occurred any event or development which could reasonably be foreseen to result in such a Material Adverse Change in the future, and (b) the Company has not taken any of the actions set forth in Section 5.2 hereof.

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3.11   Assets . The Company has good and marketable title to, or in the case of leased assets, valid leasehold interests in, all of its assets (including those reflected in the Interim Balance Sheet), tangible or intangible, free and clear of any Encumbrances. All properties used in the operations of the Company Business are reflected on the Company Balance Sheet to the extent required under GAAP to be so reflected. The Company owns or leases all tangible personal property used in or necessary to conduct its business as conducted and planned to be conducted by the Company. Each such item of tangible personal property is in good operating condition and repair, ordinary wear and tear excepted, is free from patent defects, is suitable for the purposes for which it is being used and planned to be used by the Company and has been maintained in accordance with normal industry practice. All leases of real or personal property to which the Company or any Company Subsidiary is a party are fully effective and afford the Company or such Company Subsidiary valid leasehold possession of the real or personal property that is the subject of the lease. Neither the Company nor any Company Subsidiary is in violation of any zoning, building, safety or environmental ordinance, regulation or requirement or other law or regulation applicable to the operation of its owned or leased properties with which it has not complied, nor has the Company or Company Subsidiary received any notice of violation of any such law.

3.12   Real Property .

1. Neither the Company nor any Company Subsidiary owns any real property, nor has the Company or any Company Subsidiary ever owned any real property.
2. Section 3.12(b) of the Company Disclosure Schedule sets forth an accurate and complete description (by subject leased real property, the date and term of the lease, sublease or other occupancy right, the name of the parties thereto, each amendment thereto and the aggregate annual base rent payable thereunder) of all real property in which the Company has a leasehold or subleasehold estate or other right to use or occupy (collectively, the " Leased Real Property "). The Company has made available to the Purchaser accurate and complete copies of all leases and other Contracts granting a right in or relating to the Leased Real Property and all Contracts and other documents evidencing, creating or constituting Encumbrances upon or rights in the Leased Real Property.
3. The Company holds valid leasehold interests in its Leased Real Property, free and clear of any Encumbrances.
4. Except as set forth in Section 3.12(d) of the Company Disclosure Schedule, to the Company's Knowledge, no Person other than the Company is in possession of any portion of the Leased Real Property. The Company has not granted to any Person any sublease or any other right to use or occupy any portion of any parcel of Leased Real Property, and the Company has not received notice of any claim of any Person to the contrary.
5. The Leased Real Property constitutes all such property used in or necessary to conduct the businesses of the Company as conducted and as planned to be conducted by the Company.

3.13   Intellectual Property .

1. Company Intellectual Property . The Company and each Company Subsidiary (i) owns or (ii) has the valid and legally enforceable right or license to use, and, to the extent that it does any of the following, to develop, make, have made, offer for sale, sell, import, copy, modify, create derivative works of, distribute, license, and dispose of all Intellectual Property used in the conduct of the Company

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Business (the " Company Intellectual Property "); provided, however, that no representation or warranty is made regarding the validity or enforceability of any patent application. The Company Intellectual Property is sufficient to conduct the Company Business. As used herein: (i) the term " Company Business " means the businesses of the Company and its Subsidiaries as currently conducted and currently proposed to be conducted by the Company and its Subsidiaries and (ii) " Company Product or Service " means each of the products and services currently produced, manufactured, marketed, licensed, sold, provided or distributed by the Company and/or any Company Subsidiary and each product and service currently under development by the Company or any Company Subsidiary.

2. 1. Owned Intellectual Property . Section 3.13(a)(i) of the Company Disclosure Schedule sets forth a complete and accurate list of all Company Intellectual Property owned by the Company (the " Owned Intellectual Property "), which list includes and separately sets forth all of the following: (A) Patents, (B) Trademarks, (C) Copyrights, (D) Internet Addresses, (E) Software, (F) Trade Secrets, (G) Mask Works and (H) other Intellectual Property, indicating for each of the foregoing (A) through (H) (whenever applicable for Registered Intellectual Property) the (x) the applicable jurisdiction of use and registration, (y) registration number, publication number and application number, and (z) dates of filing, publication, issuance and renewal. Except as specifically set forth on Section 3.13(a)(i) of the Company Disclosure Schedule, the Company has valid title to all the Owned Intellectual Property and is the sole and exclusive owner of all the Owned Intellectual Property, free and clear of all Encumbrances and licenses (other than licenses listed on Schedule 3.13(g) of the Company Disclosure Schedule).
   2. Inbound Licenses and Rights . "Third Party Intellectual Property" means Intellectual Property not owned by the Company or a Company Subsidiary (other than Internally Used Shrinkwrap Software) that is incorporated into or integrated or bundled with, or used in the development of, any Company Product or Service or that is otherwise used by the Company or any Company Subsidiary. The Company holds a valid license or licenses to use all Third Party Intellectual Property and the Company has made available to the Purchaser accurate and complete copies of each Contract governing Third Party Intellectual Property and under which the Company is licensed or otherwise authorized to use Third Party Intellectual Property (the " Inbound Licenses ") and a complete and accurate list of all Inbound Licenses is set forth on Section 3.13(a)(ii) of the Company Disclosure Schedule, which list indicates for each Inbound License the title, parties thereto and date of such Inbound License. Neither the Company nor any Company Subsidiary has breached any such Inbound License in a manner that would allow the other party to terminate the agreement or exercise legal remedies.

3. No Restrictions . The Owned Intellectual Property is free of all royalty or other payment obligations and other Encumbrances (other than non-exclusive licenses granted in the ordinary course of the Company Business) and is not subject to any Judgments or limitations or restrictions on use or otherwise. Except for Contracts set forth in Section 3.13(b) of the Company Disclosure Schedule, there is no Proceeding, Judgment, Contract or other arrangement that prohibits or restricts the Company from carrying on its business anywhere in the world or from any use or any other exploitation of any Company Intellectual Property. No Person has any rights in any Owned Intellectual Property that could cause any reversion or renewal of rights in favor of that Person or termination of the Company's rights in any Owned Intellectual Property.
4. Effect of Closing . Immediately after the Closing and consummation of the Merger, the Surviving Corporation or its Subsidiaries will be the sole owner of, and will have valid title to, the Owned Intellectual Property, and will have the full right to use, license and transfer the Company Intellectual Property in the same manner and on the same terms that the Company had immediately prior

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to the Closing. The Company is not legally bound by any Contract or other obligation under which the occurrence of the Closing or the consummation of the Merger could (i) obligate the Company or the Purchaser to license, or otherwise grant rights to any other Person in, any Intellectual Property (whether owned or used by the Company), (ii) entitle any Person to receive (or request the release of) any source code, (iii) result in an Encumbrance on any Company Intellectual Property or any Intellectual Property of the Purchaser or (iv) otherwise increase any burdens or decrease any rights relating to the Company Intellectual Property Neither the execution, delivery and performance of this Agreement or the Company Ancillary Agreements nor the consummation of the Merger and the other transactions contemplated by this Agreement or by the Company Ancillary Agreements will: (i) constitute a material breach of or default under any instrument, license or other Contract to which the Company or a Company Subsidiary is a party governing any Company Intellectual Property (collectively, the " Company IP Rights Agreements "); (ii) cause the forfeiture or termination of, or give rise to a right of forfeiture or termination of, any Company Intellectual Property or Inbound License or other Company IP Rights Agreement; or (iii) materially impair the right of the Company or the Surviving Corporation or any Company Subsidiary to use, develop, make, have made, offer for sale, sell, import, copy, modify, create derivative works of, distribute, license, or dispose of any Company Intellectual Property or portion thereof. Except as set forth on Schedule 3.13(c) of the Company Disclosure Schedule, there are no royalties, honoraria, fees or other payments payable by the Company or any Company Subsidiary to any third person (other than salaries payable to employees and independent contractors not contingent on or related to use of their work product) as a result of the use, license, manufacture, sale, offering for sale, copying, distribution, or disposition of any Company Intellectual Property by the Company or any Company Subsidiary and none shall become payable as a result of the consummation of the Merger or any of the other transactions contemplated by this Agreement. After the Effective Time, all Owned Intellectual Property will be fully transferable, alienable or licensable by the Surviving Corporation and the Purchaser without restriction and without payment of any kind to any third party

4. Acquisition of Ownership Rights . Except as set forth in Section 3.13(d) of the Company Disclosure Schedule, the Company has developed or created or otherwise owns or possesses sufficient legal rights to all of the Owned Intellectual Property used in the conduct of the Company Business. In addition, with respect to the Owned Intellectual Property:

4. 1. Employees . Section 3.13(d)(i) of the Company Disclosure Schedule lists all current and former employees of the Company or any Company Subsidiary who conceived, authored, invented, developed, reduced to practice or otherwise contributed to any Owned Intellectual Property (including without limitation all Software source code and object code and Mask Works that are used in any Company Product or Service or in the Company Business), either individually or jointly with others, and indicates whether such inventor is a current or former employee of the Company or a Company Subsidiary and, if not a current employee of the Company or a Company Subsidiary, the relationship of such inventor to the Company at the time the respective invention was made and the present relationship, if any, of such inventor with the Company. Except as specifically noted in Section 3.13(d)(i) of the Company Disclosure Schedule, each such current or former employee has executed a confidentiality and assignment of inventions agreement in a form substantially similar to the agreement set forth as Attachment 1 to Section 3.13(d)(i) of the Company Disclosure Schedule and such agreement constitutes a valid assignment to the Company of, and covers, all Intellectual Property conceived, authored, invented, developed, reduced to practice by such employee during the term of any and all periods of employment with the Company or a Company Subsidiary. No current or former employee, officer or director of the Company or of any Company Subsidiary has any direct right, license, claim or interest whatsoever in or with respect to any Company Owned Intellectual Property.

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5. 2. Consultants . Section 3.13(d)(ii) of the Company Disclosure Schedule also separately lists all current and former consultants or other Persons who conceived, authored, invented, developed, reduced to practice or otherwise contributed to the Owned Intellectual Property (including without limitation all Software source code and object code and Mask Works that are used in a Company Product or Service or in the Company Business), either individually or jointly with others, and who were not then employees of the Company. Except as specifically noted in such section, each such current or former consultant has executed a confidentiality and assignment of inventions agreement in a form substantially similar to the agreement set forth as Attachment 1 to Section 3.13(d)(ii) of the Company Disclosure Schedule and such agreement constitutes a valid assignment to the Company of all such Owned Intellectual Property, and covers, all Intellectual Property conceived, authored, invented, developed, reduced to practice by such consultant during the term of any and all engagements with the Company or otherwise included in any deliverable or work product resulting from such engagements. No current or former consultant or other non-employee of the Company or of any Company Subsidiary has any direct right, license, claim or interest whatsoever in or with respect to any Company Owned Intellectual Property.
   3. Other Assignments . Section 3.13(d)(iii) of the Company Disclosure Schedule separately lists all other written assignments pursuant to which Company acquired ownership rights in the Owned Intellectual Property (including, without limitation, by way of any form of business acquisition or merger).
   4. Effect of Assignments . In each case in which the Company has acquired any Owned Intellectual Property from any Person, other than an Inbound License of Third Party Intellectual Property listed under Section 3.13(a)(ii) of the Company Disclosure Schedule, the Company has obtained a valid and enforceable written assignment sufficient to irrevocably transfer all rights in that Intellectual Property to the Company. If the Company has so acquired Registered Intellectual Property, the Company has duly recorded each of these assignments with the appropriate Governmental Authorities, and listed these assignments in Section 3.13(e) of the Company Disclosure Schedule
   5. No Violation . To the Company's Knowledge, no current or former employee, consultant or independent contractor of the Company or any Company Subsidiary: (i) has been or is in material violation of any term or covenant of any employment contract, patent disclosure agreement, invention assignment agreement, nondisclosure agreement, noncompetition agreement or any other Contract with any other party by virtue of such employee's, consultant's or independent contractor's being employed by, or performing services for, the Company or any Company Subsidiary or using trade secrets or proprietary information of others without permission; or (ii) has developed any technology, software or other copyrightable, patentable or otherwise proprietary work for the Company or during a period of time during which they were working for the Company or any Company Subsidiary that is subject to any Contract under which such employee, consultant or independent contractor has assigned or otherwise granted to any third party any rights (including Intellectual Property) in or to such technology, software or other copyrightable, patentable or otherwise proprietary work. Neither the employment of any employee of the Company or any Company Subsidiary, nor the use by the Company or any Company Subsidiary of the services of any consultant or independent contractor subjects the Company or such Company Subsidiary to any Liability to any third party for improperly soliciting such employee, consultant or independent contractor to work for the Company or such Company Subsidiary, whether such Liability is based on contractual or other legal obligations to such third party.

6. Registered Intellectual Property . Section 3.13(e) of the Company Disclosure Schedule separately lists all Registered Intellectual Property included within the Owned Intellectual

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Property. The Company has made available to the Purchaser accurate and complete copies of the documentation in respect of such Registered Intellectual Property.

6. 1. Fees and Applications . All necessary registration, maintenance, renewal, and annuity fees and Taxes have been paid, and all necessary documents have been filed, in connection with the Registered Intellectual Property. In connection with the Registered Intellectual Property, all registrations are in force and all applications for the same are pending in good standing and without opposition, interference, re- examination or any other adverse action or Proceedings pending adverse action or Proceedings pending or threatened by or before the Governmental Authority in which the registrations or applications are issued or filed.
   2. List of Maintenance Actions . Section 3.13(e) of the Company Disclosure Schedule accurately and completely lists all actions that must be taken by the Company within 120 days after the date of this Agreement including with respect to the payment of any fees or Taxes or the filing of any documents necessary or appropriate to maintain, perfect or renew any Registered Intellectual Property or to avoid prejudice to, impairment or abandonment of any Registered Intellectual Property.

7. Validity . All issued patents and registered or unregistered Copyrights, Mask Works, trademarks and service marks included in the Owned Intellectual Property are valid and subsisting under applicable Law for those respective categories of Intellectual Property and the Company is the record owner thereof. The Company has no Knowledge of any facts or circumstances that exist that could render any of the Company Intellectual Property invalid or unenforceable. All releases and versions of the Software included in the Owned Intellectual Property contain appropriate copyright legends or notices in the name of the Company.
8. Outbound Licenses and Rights . Section 3.13(g) of the Company Disclosure Schedule lists all Contracts under which the Company has licensed or otherwise granted rights in any of the Company Intellectual Property to any Person (the " Outbound Licenses "). Section 3.13(g) of the Company Disclosure Schedule also lists all of the following related to any such Outbound License or other grants to the Company Intellectual Property made by the Company or any sublicensee: (i) in subpart A of Section 3.13(g) of the Company Disclosure Schedule, any exclusive rights granted or licensed to any Person; (ii) in subpart B of Section 3.13(g) of the Company Disclosure Schedule, any source code escrow or other form of delivery or disclosure of any source code to or for the benefit of any Person; or (iii) in subpart C of Section 3.13(g) of the Company Disclosure Schedule, any other Contracts that give other Persons the right to use, market or otherwise exploit or commercialize any of the Company Intellectual Property or related products or services. Without limiting the foregoing, neither the Company nor, to the Company's Knowledge, any of its sublicensees have licensed or otherwise authorized any Person to copy, distribute, modify, decompile or prepare derivative works of any Software within the Owned Intellectual Property except pursuant an enforceable written agreement. Neither the Company nor any of the Company Subsidiaries has transferred ownership of any Intellectual Property that is or was owned by the Company or any of the Company Subsidiaries to any third party.
9. Indemnity Agreements . The Company has not agreed to indemnify, defend or otherwise hold harmless any other Person with respect to any Loss resulting or arising from the Company Intellectual Property (including without limitation any Loss resulting or arising from the infringement or misappropriation of any Intellectual Property of a third party by any Company Intellectual Property or any claim, suit or assertion of any such infringement or misappropriation), except under those Contracts listed in Section 3.13(h) of the Company Disclosure Schedule.

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9. No Violation of Company Rights . To the Company's Knowledge, no Person has used, disclosed, infringed or misappropriated any of the Company Intellectual Property, other than authorized uses and disclosures in accordance with the Contracts listed in Sections 3.13(a)(ii) and 3.13(g) of the Company Disclosure Schedule. The Company has not commenced or threatened any Proceeding, or asserted any allegation or claim, against any Person for infringement or misappropriation of any Company Intellectual Property or the asserted material breach of any Contract involving any Company Intellectual Property.
10. No Violation of Third Party Rights . Neither the Company nor any Company Subsidiary has any Liability for infringement or misappropriation of the Intellectual Property rights of any third party or for unfair competition or unfair trade practices under the laws of any jurisdiction. Neither the operation of the Company Business nor the use, development, manufacture, marketing, licensing, sale, offering for sale, distribution, or intended use of any Company Product or Service or the conduct of the Company Business by the Company or any Company Subsidiary (i) has violated or violates any license or other Contract between the Company or such Company Subsidiary and any third party, or (ii) directly or indirectly (including via contribution or inducement) has infringed or misappropriated, infringes or misappropriates or will infringe or misappropriate, any Intellectual Property of any other party. There is no pending, or to the Knowledge of the Company or any Company Subsidiary, threatened, claim or litigation contesting the validity, ownership or right of the Company or any Company Subsidiary to use or exercise any Company Intellectual Property, nor, to the Company's Knowledge, is there any bona fide basis for any such claim, nor has the Company or any Company Subsidiary received any notice asserting that any Company Intellectual Property or the proposed use, development, manufacture, sale, offering for sale, licensing, or distribution thereof directly or indirectly (including via contribution or inducement) conflicts with or infringes or shall conflict with or infringe the rights of any other party, nor, to the Company's Knowledge, is there any bona fide basis for any such assertion and neither the Company nor any Company Subsidiary has received any written notice or offer from any third party offering a license under any patents. Neither the Company nor any Company Subsidiary has received any opinion of counsel that any Company Product or Service or the operation of the Company Business, infringes or misappropriates any Third Party Intellectual Property Rights.
11. Confidentiality . The Company has taken all commercially reasonable steps necessary to protect, preserve and maintain Trade Secrets and other Confidential Information included in the Owned Intellectual Property and their secrecy and confidentiality except to the extent disclosed in issued patents or published patent applications. The Company has taken all commercially reasonable steps necessary to comply with all duties of the Company to protect the confidentiality of information and technology provided to the Company by any other Person. Section 3.13(k) of the Company Disclosure Schedule lists all standalone nondisclosure agreements and any other Contract under which the Company has agreed to keep confidential and/or not use any Intellectual Property or other information of another Person (provided that the Company need not separately list for this purpose licenses of Internally Used Shrinkwrap Software). The Company has required each technical employee, consultant and other independent contractor who created or modified any of the Owned Intellectual Property to execute a proprietary information and invention assignment agreement (containing no exceptions or exclusions from the scope of its coverage) in a form reasonably conforming to industry standards. To the Company's Knowledge, none of those current or former employees, consultants or other independent contractors has violated any of those agreements.
12. No Harmful Code . The Company takes commercially reasonable steps (based on standard industry practices) at all times to assure that all Software and data residing on its computer networks material to the business, financial and accounting controls and operations or licensed or otherwise

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distributed to customers is free of viruses and other disruptive technological means. None of the Company Products or Services contains any undocumented "back door," "drop dead device," "time bomb," "Trojan horse," "virus" or "worm" (as such terms are commonly understood in the software industry) or any other code designed or intended to have, or capable of performing or without user intent will cause, any of the following functions: (i) disrupting, disabling, harming or otherwise impeding in any manner the operation of, or providing unauthorized access to, a computer system or network or other device on which such code is stored or installed; (ii) damaging or destroying any data or file without the user's consent, or (iii) sending information to Company, a Company Subsidiary or any third party.

13. No Special Adverse Circumstances .

13. 1. The computer Software source and object code underlying or utilized in connection with the Owned Intellectual Property does not incorporate, depend upon or require for its functionality any source or object code or other Intellectual Property that is not wholly-owned by the Company or to which the Company does not possess sufficient legal rights to use as currently used by the Company or presently intended to be used by the Company.
    2. No government funding, facilities of a university, college, other educational institution or research center, was used in the creation or development of the Owned Intellectual Property. To the Knowledge of the Company, no current or former employee, consultant or independent contractor, in each case who was involved in, or who contributed to, the creation or development of any Owned Intellectual Property, has performed services for any Governmental Authority, a university, college, or other educational institution, or a research center, during a period of time during which such employee, consultant or independent contractor was also performing services used in the creation or development of the Owned Intellectual Property in a manner that would provide a basis for such Governmental Authority, university, college, or other educational institution, or a research center, to claim ownership of or any rights to use, license, sublicense or otherwise exploit any Owned Intellectual Property that the current or former employee, consultant or independent contractor, has purported to assign to the Company. The Company is not a party to any Contract, license or agreement with any Governmental Authority that grants to such Governmental Authority any right or license with respect to the Owned Intellectual Property, other than as granted in the ordinary course of business pursuant to a non-exclusive license to any Software.
    3. Except as set forth in Section 3.13(m)(iii) of the Company Disclosure Schedule, neither the Company nor any Company Subsidiary is a member or promoter of, or a contributor to, any official or de facto standards setting or similar organization that could reasonably be expected to require or obligate the Company or any Company Subsidiary to license or disclose any Intellectual Property to, any such organization's members or to grant or offer to any of such organization's members, or to any other Person, any license or right to any Company Intellectual Property
    4. Schedule 3.13(m)(iv) of the Company Disclosure Schedule lists all Open Source Materials that have been incorporated into, combined with or distributed with any Company Products or Services. As used in this Section 3.13(m)(iv) , " Open Source Materials " (i) means any software that (1) contains, or is derived in any manner (in whole or in part) from, any software that is distributed as free software, open source software (e.g., without limitation, Linux) or (2) requires as a condition of its use, modification or distribution that it, or other software incorporated, distributed with, or derived from it, be disclosed or distributed in source code form or made available at no charge and (ii) includes without limitation software licensed under the GNU's General Public License (the " GPL ") or Lesser/Library GPL, the Mozilla Public License, the Netscape Public License, the Sun Community

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Source License, the Sun Industry Standards License, the BSD License, a Microsoft Shared Source License, the Common Public License, the Apache License, and any license listed at www.opensource.org. or any similar license associated with the use of Open Source Materials (an " Open Source License "). Neither the Company nor any Company Subsidiary has (i) incorporated Open Source Materials into, or combined Open Source Materials with, the Company Product or Services or Company Intellectual Property; (ii) distributed Open Source Materials in conjunction with any Company Intellectual Property or Company Products and Services; or (iii) used Open Source Materials, in such a way that, with respect to clause (i), (ii), or (iii), obligates the Company or such Company Subsidiary with respect to any Company Intellectual Property or any Company Product or Service to grant any third party, any rights or immunities under any Company Intellectual Property (including using any Open Source Materials that require, as a condition of use, modification or distribution of such Open Source Materials that other software incorporated into, derived from or distributed with such Open Source Materials be (1) disclosed or distributed in source code form, (2) be licensed for the purpose of making derivative works, or (3) be redistributable at no charge). The Company and each Company Subsidiary is not in breach or violation of any Open Source License.

3.14   Contracts .

1. Section 3.14(a) of the Company Disclosure Schedule sets forth an accurate and complete list of each Contract (or group of related Contracts) to which the Company or a Company Subsidiary is a party (collectively, the " Material Contracts "), by which the Company or a Company Subsidiary is bound or pursuant to which the Company or a Company Subsidiary is an obligor or a beneficiary, which:

1. 1. involves performance of services or delivery of goods or materials, the performance of which extends over a period of more than one year or that otherwise involves an amount or value in excess of $50,000;
   2. is for capital expenditures in excess of $100,000 or provides for payments (whether fixed, contingent, or otherwise) by or to the Company or any Company Subsidiary in an aggregate amount of $50,000 or more;
   3. is a mortgage, indenture, guarantee, loan or credit agreement, security agreement, subordination agreement, intercreditor agreement or other Contract relating to Indebtedness, other than accounts receivables and payables in the ordinary course of business;
   4. is a lease or sublease of any real or personal property, or that otherwise affects the ownership of, leasing of, title to, or use of, any real or personal property (except personal property leases and conditional sales agreements having aggregate payments of less than $50,000 and a term of less than one year);
   5. is a license or other Contract (including without limitation any Inbound License and any Outbound License) under which the Company has licensed or otherwise granted rights in any Company Intellectual Property to any Person (except for licenses implied by the sale of a product to customers in the ordinary course of business) or any Person has licensed or sublicensed to the Company, or otherwise authorized the Company to use, any Third Party Intellectual Property (except for Internally Used Shinkwrap Software)

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2. 6. provides for the development by or for the Company or any Company Subsidiary of any software, semiconductor or semiconductor design or mask work, content (including textual content and visual, photographic or graphics content), technology or Intellectual Property, or providing for the purchase or license by or from the Company of any software, semiconductor or semiconductor design or mask work, content (including textual content and visual, photographic or graphics content), technology or Intellectual Property (other than licenses of Internally Used Shrinkwrap Software);
   7. is for or relating to the employment or receipt of services by the Company or any Company Subsidiary of, any current or former director, officer, employee or consultant or any other type of Contract with any of its officers, employees or consultants that (A) is not immediately terminable by it without cost or other Liability, or (B) provides for any severance, termination or similar pay to, or acceleration of benefits of, such director, officer, employee or consultant, including any contract requiring it to make a payment to any director, officer, employee or consultant on account of the Merger, any transaction contemplated by this Agreement or any Contract that is entered into in connection with this Agreement;
   8. constitutes, involves or establishes any bonus plan or similar compensatory arrangement;
   9. provides for a loan or advance of any amount to any director or officer of the Company, other than advances for travel and other appropriate business expenses in the ordinary course of business;
   10. licenses any Person to manufacture or reproduce any of the Company's products, services or technology or any Contract to sell or distribute any of the Company's products, services or technology;
   11. is a joint venture, partnership or other Contract involving any joint conduct or sharing of any business, venture or enterprise, or a sharing of profits or losses or pursuant to which the Company has any ownership interest in any other Person or business enterprise other than the Indian Subsidiary;
   12. contains any covenant or obligation (A) prohibiting or limiting the right of the Company or any Company Subsidiary to (1) engage or participate in any aspect of its business or any line of business or to compete (geographically or otherwise) in any line of business or market, (2) make, sell, market, distribute or otherwise commercially exploit (or to grant any rights to make, sell, market, distribute or otherwise commercially exploit), or freely set prices for (including "most favored customer" pricing provisions) any products, technologies or services or (3) solicit potential employees, consultants, contractors or other suppliers or customers or (B) that grants any exclusive rights, rights of refusal, rights of first negotiation or similar rights to any party;
   13. involves payments based, in whole or in part, on profits, revenues, fee income or other financial performance measures of the Company;
   14. is a power of attorney granted by or on behalf of the Company;
   15. is a written warranty, guaranty or other similar undertaking with respect to contractual performance extended by the Company other than in the ordinary course of business;

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2. 16. is a settlement agreement with respect to any pending or threatened Proceeding entered into within three years prior to the Agreement Date, other than (A) releases immaterial in nature or amount entered into with former employees or independent contractors of the Company in the ordinary course of business in connection with routine cessation of such employee's or independent contractor's employment with the Company or (B) settlement agreements for cash only (which has been paid) and does not exceed $25,000 as to such settlement;
   17. was entered into other than in the ordinary course of business and that involves an amount or value in excess of $100,000 or contains or provides for an express undertaking by the Company to be responsible for consequential or liquidated damages;
   18. is made with a dealer, distributor, OEM (original equipment manufacturer), VAR (value added reseller), systems integrator, sales representative or similar Contract under which any third party is authorized to sell, sublicense, lease, distribute, market or take or solicit orders for any of the products, services or technology of the Company or any Company Subsidiary;
   19. is related to the sale, issuance, grant, exercise, award, purchase, repurchase or redemption of any shares of its capital stock or other securities or any options, warrants or other rights to purchase or otherwise acquire any such shares of capital stock, other securities or options, warrants or other rights therefor, except for those Contracts conforming to the standard agreement under the Stock Option Plan;
   20. is a Contract with any labor union or any collective bargaining agreement or similar Contract with its employees;
   21. is a Contract providing for indemnification or warranting by it (other than pursuant to its standard customer agreement);
   22. is a Contract in which any of its officers, directors, employees or stockholders or any member of their immediate families is directly or indirectly interested (whether as a party or otherwise) including without limitation any indemnification agreement, but excluding any agreement for the purchase of Company Capital Stock and any Option or Warrant or which is otherwise covered by another subparagraph of this Section;
   23. is a Contract pursuant to which it has acquired a business or entity, or assets of a business or entity, whether by way of merger, consolidation, purchase of stock, purchase of assets, license or otherwise since inception;
   24. is a Contract with a Governmental Authority or with a prime contractor to any Governmental Authority or with a subcontractor;
   25. is a Contract under which the Company's entering into this Agreement or the consummation of the Merger or the transactions contemplated thereby shall give rise to, or trigger the application of, any rights of any third party or any obligations of the Company or any Company Subsidiary that would come into effect upon the consummation of the Merger; or

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2. 26. is otherwise material to the business, properties or assets of the Company or under which the consequences of a default or termination could have a Material Adverse Effect on the Company.

3. The Company has made available to the Purchaser an accurate and complete copy (in the case of each written Contract) or an accurate and complete written summary (in the case of each oral Contract) of each of the Material Contracts. With respect to each such Material Contract:

xxvi.                         the Contract is legal, valid, binding, enforceable and in full force and effect except to the extent it has previously expired in accordance with its terms;

xxvii.                         the Company has and, to the Company's Knowledge, the other parties to the Contract have performed all of their respective obligations required to be performed under the Contract;

xxviii.                         the Company is not, nor to the Company's Knowledge, is any other party to the Contract, in breach or default under the Contract and no event has occurred or circumstance exists that (with or without notice, lapse of time or both) would constitute a breach or default by the Company or, to the Company's Knowledge, by any such other party or permit termination, cancellation, acceleration, suspension or modification of any obligation or loss of any benefit under, result in any payment becoming due under, result in the imposition of any Encumbrances on any of the Company Capital Stock or any of the properties or assets of the Company under, or otherwise give rise to any right on the part of any Person to exercise any remedy or obtain any relief under, the Contract, nor has the Company given or received notice or other communication alleging the same; and

xxix.                         except as set forth in Section 3.14(b) of the Company Disclosure Schedule, the Contract is not under negotiation (nor has written demand for any renegotiation been made), no party has repudiated any portion of the Contract and the Company has no Knowledge that any party to the Contract does not intend to renew it at the end of its current term.

4. To the Company's Knowledge, no director, agent, employee or consultant or other independent contractor of the Company is a party to, or is otherwise bound by, any Contract, including any confidentiality, noncompetition or proprietary rights agreement, with any other Person that in any way adversely affects or will affect (i) the performance of his or her duties for the Company, (ii) his or her ability to assign to the Company rights to any invention, improvement, discovery or information relating to the business of the Company or (iii) the ability of the Company to conduct its business as currently conducted or proposed to be conducted.
5. The Company is not, and the Company has not at any time since its inception been, party to any Contract with (i) any Governmental Authority, (ii) any prime contractor to any Governmental Authority or (iii) any subcontractor with respect to any Contract described in clause (i) or (ii).

3.15   Tax Matters .

1. All Tax Returns of the Company and of any Company Subsidiary required to be filed on or before the Closing Date have been timely filed (including extensions), and each such Tax Return is accurate and complete in all material respects and was prepared in substantial compliance with applicable Law. The Company and each Company Subsidiary has timely paid all Taxes (whether or not

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shown on any such Tax Returns) required to be paid with respect to such Tax Returns. No claim has ever been made by a Governmental Authority in writing in a jurisdiction where the Company does not file a Tax Return that it is or may be subject to taxation by that jurisdiction. The Company has not requested an extension of time within which to file any Tax Return which has not since been filed. The Company has delivered or made available to Purchaser complete and accurate copies of all Tax Returns of the Company (and its predecessors) for the years ended September 30, 2005, 2006 and 2007.

2. The amounts reflected as Liabilities in line items on the Balance Sheet, the Interim Balance Sheet or the Closing Balance Sheet for all Taxes are adequate to cover all Liabilities for all unpaid Taxes, whether or not disputed, that have accrued with respect to, or are applicable to, the period ended on and including the Closing Date. Neither the Company nor any Company Subsidiary has any Liability for unpaid Taxes accruing during the period beginning on the date of the Closing Balance Sheet, and ending on the Closing Date, except for Taxes arising in the ordinary course of business after such date.
3. All Taxes that the Company or any Company Subsidiary is required by Law to withhold or collect, (including without limitation sales and use Taxes and amounts required to be withheld or collected pursuant to Sections 1441, 1442, 1445 and 1446 of the Code or similar provisions under any foreign law or in connection with any amount paid or owing as wages, salaries or other payments to any employee, independent contractor, creditor, stockholder, or other Person, including without limitation any amounts required to be withheld and paid over under the Federal Insurance Contribution Act, Medicare, Federal Unemployment Tax Act, and relevant federal and state income and employment tax withholding laws), have been duly and timely withheld or collected and paid over. To the extent required by applicable Law, all such amounts have been timely paid over to the proper Governmental Authority or, to the extent not yet due and payable, are held in separate bank accounts for such purpose.
4. No federal, state, local or foreign audits or other Proceedings are pending or being conducted, nor has the Company or any Company Subsidiary received any (i) written notice from any Governmental Authority that any such audit or other Proceeding is pending, threatened or contemplated or (ii) notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted or assessed by any Governmental Authority against the Company or any Company Subsidiary, with respect to any Taxes due from or with respect to the Company or a Company Subsidiary or any Tax Return filed by or with respect to the Company or a Company Subsidiary. Neither the Company nor any Company Subsidiary has granted, nor has it been requested to grant, any waiver of any statutes of limitations applicable to any claim for Taxes or with respect to any Tax assessment or deficiency.
5. All Tax deficiencies that have been claimed, proposed or asserted in writing against the Company or any Company Subsidiary have been fully paid or finally settled.
6. The Company and each Company Subsidiary has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of income Tax under Section 6662 of the Code or any comparable provisions of