AGREEMENT AND PLAN OF MERGER

Exhibit 2.2

AGREEMENT AND PLAN OF MERGER

dated as of May 5, 2009

by and among

Borland Software Corporation,

Bentley Merger Sub, Inc.

Micro Focus International plc

and

Micro Focus (US), Inc.

TABLE OF CONTENTS

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of May 5, 2009, is entered into by and among Borland Software Corporation, a Delaware corporation (the “ Company ”), Bentley Merger Sub, Inc., a Delaware corporation (“ Merger Sub ”), Micro Focus International plc, a company organized under the laws of England and Wales (“ PLC ”) and Micro Focus (US), Inc., a Delaware corporation (“ Parent ”).

RECITALS

WHEREAS, the board of directors of the Company (the “ Company Board ”), subject to the terms and conditions set forth herein, has (i) declared the advisability of this Agreement and approved this Agreement, (ii) resolved to recommend approval and adoption of this Agreement by the Stockholders of the Company and (iii) received a written opinion of the Financial Advisor (as defined in Section 3.25 ) as set forth in Section 3.25 herein;

WHEREAS, the board of directors of Merger Sub has (i) declared the advisability of this Agreement and (ii) approved this Agreement;

WHEREAS, the Company Board and the board of directors of Merger Sub have approved the merger of Merger Sub with and into the Company, with the Company as the surviving corporation, upon the terms and subject to the conditions set forth in this Agreement and General Corporation Law of the State of Delaware (the “ DGCL ”), whereby (i) each issued and outstanding share of the common stock, par value $0.01 per share (the “ Common Shares ”), of the Company (other than Common Shares to be canceled pursuant to Section 2.01(b) and Dissenting Shares (as defined in Section 2.01(d) )), shall be converted into the right to receive the Merger Consideration (as defined in Section 2.01(a) ) and (ii) each Cash-Pay Option (as defined in Section 2.02(b) ) shall be converted into the right to receive the Cash-Pay Option Consideration (as defined in Section 2.02(b) ); and

WHEREAS, the Company, Merger Sub, PLC and Parent desire to make certain representations, warranties, covenants and agreements in connection with the Merger, and also to prescribe various conditions to the Merger.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE 1

THE MERGER

1.01 The Merger . At the Effective Time (as defined in Section 1.02 ), subject to the terms and conditions of this Agreement and in accordance with the provisions of the DGCL, Merger Sub shall be merged (the “ Merger ”) with and into the Company. Following the Merger, the separate corporate existence of Merger Sub shall cease, and the Company shall continue as the surviving corporation (sometimes hereinafter referred to as the “ Surviving Corporation ”) and shall continue to be governed by the laws of the State of Delaware.

1.02 Effective Time . Subject to the provisions of this Agreement, on the Closing Date the parties shall file with the Secretary of State of the State of Delaware a certificate of merger (the “ Certificate of Merger ”), executed in accordance with the relevant provisions of the DGCL. The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware or at such later time as is agreed to by the parties hereto and specified in the Certificate of Merger (the time at which the Merger becomes effective is herein referred to as the “ Effective Time ”).

1.03 Effects of the Merger . The Merger shall have the effects set forth herein, in the Certificate of Merger and in the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of the Company and the Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and the Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

1.04 Certificate of Incorporation and Bylaws of the Surviving Corporation .

(a) At the Effective Time, the Certificate of Incorporation of the Company shall be amended to read in its entirety as the Certificate of Incorporation of Merger Sub, as in effect immediately prior to the Effective Time, provided that the name of the Surviving Corporation shall be as may be set forth by Parent, and as so amended shall be the Certificate of Incorporation of the Surviving Corporation until duly amended in accordance with applicable law and the Surviving Corporation’s Certificate of Incorporation and Bylaws.

(b) The Bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Corporation, until duly amended in accordance with applicable law and the Surviving Corporation’s Certificate of Incorporation and Bylaws.

1.05 Directors . The directors of Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal in accordance with applicable law and the Surviving Corporation’s Certificate of Incorporation and Bylaws.

1.06 Officers . The officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

1.07 Closing . Subject to the conditions contained in this Agreement, the closing of the Merger (the “ Closing ”) shall take place (a) at the offices of Kirkland & Ellis LLP, 555 California Street, San Francisco, California 94104, on the date which is most promptly practicable following the date of the satisfaction (or waiver if permissible) of all of the conditions set forth in Article 6 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), but in no event later than the second (2nd) business day following such date or (b) at such other place and time and/or on such other date as the Company and Parent may agree in writing. The date on which the Closing occurs is hereinafter referred to as the “ Closing Date .”

1.08 Additional Actions . If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments or assurances in law or any other acts are necessary or desirable to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of the Company or Merger Sub, the Company and its officers and directors shall be deemed to have granted to the Surviving Corporation an irrevocable power of attorney to execute and deliver all such deeds, assignments and assurances in law and to take all acts necessary, proper or desirable to vest, perfect or confirm title to and possession of such rights, properties or assets in the Surviving Corporation, and the officers and directors of the Surviving Corporation are authorized in the name of the Company to take any and all such action.

ARTICLE 2

EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE COMPANY AND MERGER SUB

2.01 Effect on Shares of Capital Stock .

(a)  Common Shares of the Company . As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any Common Shares, the Company or Merger Sub, each Common Share that is issued and outstanding immediately prior to the Effective Time (other than (i) Dissenting Shares, and (ii) those Common Shares to be canceled pursuant to Section 2.01(b) ) shall be canceled and extinguished and converted into the right to receive $1.00 in cash (the “ Merger Consideration ”), payable to the holder thereof, without interest or dividends thereon, less any applicable withholding of Taxes, in the manner provided in Section 2.03 . All such Common Shares, when so converted, shall no longer be outstanding and shall automatically be canceled and each holder of a certificate or certificates representing any such Common Shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration.

(b)  Cancellation of Certain Common Shares . As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any Common Shares, the Company or Merger Sub, each Common Share that is owned by the Company or any wholly owned Subsidiary as treasury stock or otherwise or owned by PLC or Parent or any of their respective Subsidiaries immediately prior to the Effective Time shall automatically be canceled and shall cease to exist, and no cash or other consideration shall be delivered or deliverable in exchange therefor.

(c)  Capital Stock of Merger Sub . As of the Effective Time, each share of common stock, par value $.01 per share, of Merger Sub (“ Merger Sub Common Stock ”) issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holders of Merger Sub Common Stock, the Company or Merger Sub, be converted into one validly issued, fully paid and non-assessable share of common stock, par value $.01 per share, of the Surviving Corporation (“ Surviving Corporation Common Stock ”). Each certificate that, immediately prior to the Effective Time, represented issued and outstanding shares of Merger Sub Common Stock shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent the shares of the Surviving Corporation capital stock into which such shares have been converted pursuant to the terms hereof; provided, however, that the record holder thereof shall receive, upon surrender of any such certificate, a certificate representing the shares of Surviving Corporation Common Stock into which the shares of Merger Sub Common Stock formerly represented thereby shall have been converted pursuant to the terms hereof.

(d)  Dissenting Shares . Notwithstanding anything in this Agreement to the contrary, any Common Shares issued and outstanding immediately prior to the Effective Time and held by a holder (a “ Dissenting Stockholder ”) who has not voted in favor of the Merger or consented thereto in writing and who has properly demanded appraisal for such Common Shares in accordance with the DGCL (“ Dissenting Shares ”) shall not be converted into a right to receive the Merger Consideration at the Effective Time in accordance with Section 2.01(a) hereof, but shall represent and become the right to receive such consideration as may be determined to be due to such Dissenting Stockholder pursuant to the laws of the State of Delaware, unless and until such holder fails to perfect or withdraws or otherwise loses such holder’s right to appraisal and payment under the DGCL. If, after the Effective Time, such holder fails to perfect or withdraws or otherwise loses such holder’s right to appraisal, such former Dissenting Shares held by such holder shall be treated as if they had been converted as of the Effective Time into a right to receive, upon surrender as provided above, the Merger Consideration, without any interest or dividends thereon, in accordance with Section 2.01(a) . The Company shall give Parent and Merger Sub prompt notice of any demands received by the Company for appraisal of Common Shares, withdrawals of such demands and any other instruments served pursuant to the DGCL and received by the Company, and Parent shall have the right to direct all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.

2.02 Options .

(a) For purposes of this Agreement, the term “ Option ” means each outstanding unexercised option to purchase Common Shares, whether or not then vested or fully exercisable, granted to any current or former employee, consultant or director of the Company or any Subsidiary of the Company or any other person, whether under any stock option plan or otherwise (other than in connection with the ESPP) (including, without limitation, under the Company’s 1997 Stock Option Plan, 1998 Nonstatutory Stock Option Plan, 2002 Stock Incentive Plan and 2003 Supplemental Stock Option Plan, each as amended) (collectively, the “ Stock Plans ”).

(b) The Options shall not be assumed by, continued in effect or replaced with substitute options granted by PLC, Parent or the Surviving Corporation pursuant to or in connection with the Merger. The Company shall take all actions necessary so that at the Effective Time, all Options shall terminate or be canceled, in each case, in accordance with and pursuant to the terms of the Stock Plans under which such Options were granted. In consideration of such termination or cancellation, each holder of a vested Option that has a per-share exercise price less than the Merger Consideration (collectively, the “ Cash-Pay Options ”) terminated or canceled in accordance with this Section 2.02(b) will be entitled to receive in settlement of such Cash-Pay Option as promptly as practicable following the Effective Time, but in no event later than 10 business days after the Effective Time, a cash payment from the Surviving Corporation, subject to any required withholding of Taxes, equal to the product of (i) the total number of Common Shares otherwise issuable upon exercise of such Cash-Pay Option and (ii) the Merger Consideration per Common Share less the applicable exercise price per Common Share otherwise issuable upon exercise of such Cash-Pay Option (the “ Cash-Pay Option Consideration ”). The vesting schedule of the Options shall not be accelerated by any action of the Company or the Company Board except as may be required under the terms of the Options, the Company’s Stock Plans and any applicable employment, separation or change in control agreement as in effect on the date hereof.

(c) Following the Effective Time and as a prerequisite to receiving his or her Cash-Pay Option Consideration, the holder of a Cash-Pay Option shall be required to execute a written acknowledgment to the effect that (i) the payment of the Cash - Pay Option Consideration , if any, will satisfy in full the Company ‘ s obligation to such person pursuant to such Option and (ii) subject to the payment of the Cash - Pay Option Consideration, if any, such Option held by such holder shall, without any action on the part of the Company or the holder, be deemed terminated, canceled, void and of no further force and effect as between the Company and the holder and neither party shall have any further rights or obligations with respect thereto. Such written acknowledgment shall be substantially in the form attached hereto as Exhibit 2.02(c) .

(d) The Company shall take all necessary action to provide that the Company’s 1999 Employee Stock Purchase Plan, as amended, and any other Company employee stock purchase plan (collectively, the “ ESPP ”) and all options or other rights to purchase shares of Company Common Stock granted under the ESPP shall be exercised or terminated prior to the Effective Time and no participant in the ESPP shall thereafter be granted any rights thereunder to acquire any equity securities of the Company, the Surviving Corporation, PLC, Parent or any Subsidiary of any of the foregoing. The Company shall refund any outstanding payroll deductions credited to each participant’s account under the ESPP remaining after the final purchase date under the ESPP, without interest, in accordance with the terms of the ESPP; provided, however, that to the extent the ESPP does not permit the Company to refund any such outstanding payroll deductions in conjunction with the termination of the ESPP, the Company shall declare a special purchase date prior to the Effective Time in order to ensure that no rights to purchase shares of Company Common Stock under the ESPP exist as of the Effective Time.

(e) Prior to the Effective Time, the Company shall take all actions that are necessary to give effect to the transactions contemplated by this Section 2.02 .

2.03 Payment for Common Shares in the Merger .

(a) Prior to the Effective Time, Merger Sub shall appoint a commercial bank or trust company reasonably acceptable to the Company to act as exchange and paying agent, registrar and transfer agent (the “ Agent ”) for the purpose of exchanging certificates representing, immediately prior to the Effective Time, Common Shares for the aggregate Merger Consideration. At or immediately following the Effective Time, PLC shall deposit, or PLC shall otherwise cause to be deposited, by wire transfer of immediately available funds, in trust with the Agent for the benefit of the holders of Common Shares, cash in an aggregate amount equal to (i) the product of (A) the number of Common Shares issued and outstanding immediately prior to the Effective Time and entitled to receive the Merger Consideration in accordance with Section 2.01(a) and (B) the Merger Consideration less (ii) the Company Cash Deposit (as defined below), if any, deposited into the Payment Fund pursuant to this Section 2.03(a) (such difference the “ PLC Total Merger Consideration ”). Immediately prior to the Effective Time, the Company shall deposit, or the Company shall otherwise cause to be deposited, in trust for the benefit of the holders of Common Shares, such amount of cash as PLC or Parent may reasonably request, not to exceed the Company’s Freely Available Cash (as defined below) as of immediately prior to the Effective Time, if any (the amount to be deposited by the Company is referred to herein as the “ Company Cash Deposit ” and together with the PLC Total Merger Consideration, the “ Payment Fund ”) with the Agent for deposit into the Payment Fund. For purposes of this Agreement, “ Freely Available Cash ” means unrestricted cash of the Company that is freely available for purposes of this Section 2.03 and (A) the transfer of such cash to the Company into the Payment Fund does not result in any Tax obligations to the Company or any of its Subsidiaries; (B) such cash can be distributed, contributed or otherwise delivered to the Company into the Payment Fund in accordance with all applicable Laws, including those relating to solvency, adequate surplus and similar capital adequacy tests; and (C) such cash shall not include (i) the dollar amount required to repay, repurchase, defease and/or retire the entire outstanding principal balance of the 2.75 Convertible Senior Notes Due February 15, 2012 (the “ Notes ”) (including any penalties or premiums thereon, and all interest, fees and expenses with respect thereto), (ii) the dollar amount equal to the aggregate amount to be paid to the holders of Cash-Pay Options pursuant to Section 2.02(b) , (iii) the dollar amount of any unpaid Expenses of the Company and any unpaid expenses of the Company incurred in connection with the Company’s sale process, (iv) the aggregate amount of the Change of Control Payments and (v) cash required for the reasonable short-term working capital needs of the Company). The Payment Fund shall be used solely and exclusively for purposes of paying the consideration specified in Section 2.01(a) in accordance with the terms of this Agreement, and shall not be used to satisfy any other obligations of the Company or any of its Subsidiaries. The Payment Fund shall be invested by the Agent as directed by PLC, Parent or the Surviving Corporation in (A) direct obligations of the United States of America, (B) obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of principal and interest, or (C) investments in any money market funds investing solely in any of the foregoing, in each case, with any earnings, gains or interest earned thereon being payable to Parent or the Surviving Corporation. PLC or Parent shall cause the Payment Fund to be promptly replenished to the extent of any losses incurred and not offset by earnings or gains as a result of the aforementioned investments. The Agent shall, pursuant to instructions provided by Merger Sub, make the payments provided for in Section 2.01 of this Agreement out of the Payment Fund (it being understood that any and all earnings, gains or interest earned on funds made available to the Agent pursuant to this Agreement shall be turned over to the Parent or the Surviving Corporation). The Payment Fund shall not be used for any other purpose except as provided in this Agreement. If the Effective Time does not occur by the second business day after the Company deposits the Company Cash Deposit, the Parent and the Merger Sub shall cause the Agent, by the third business day after such deposit, to refund the Company Cash Deposit to the Company by wire transfer of immediately available funds.

(b) Promptly after the Effective Time, but in no event later than 3 business days after the Effective Time, the Surviving Corporation shall cause the Agent to mail to each record holder of certificates (the “ Certificates ”) that immediately prior to the Effective Time represented Common Shares (i) a notice of the effectiveness of the Merger, (ii) a form letter of transmittal which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Agent, and (iii) instructions for use in surrendering such Certificates and receiving the Merger Consideration in respect thereof.

(c) Upon surrender to the Agent of a Certificate, together with such letter of transmittal duly executed and completed in accordance with the instructions thereto, the holder of such Certificate shall be entitled to receive, within 7 business days after such surrender, in exchange therefor, in the case of Common Shares (other than Common Shares to be canceled pursuant to Section 2.01(b) ), cash in an amount equal to the product of (i) the number of Common Shares formerly represented by such Certificate and (ii) the Merger Consideration, which amounts shall be paid by Agent by check or wire transfer in accordance with the instructions provided by such holder. No interest or dividends will be paid or accrued on the consideration payable upon the surrender of any Certificate. If the consideration provided for herein is to be delivered in the name of a person other than the person in whose name the Certificate surrendered is registered, it shall be a condition of such delivery that the Certificate so surrendered shall be properly endorsed or otherwise in proper form for transfer and that the person requesting such delivery shall pay any transfer or other Taxes required by reason of such delivery to a person other than the registered holder of the Certificate, or that such person shall establish to the satisfaction of the Surviving Corporation that such Tax has been paid or is not applicable. Until surrendered in accordance with the provisions of this Section 2.03 , each Certificate (other than Certificates representing Dissenting Shares or Common Shares to be canceled pursuant to Section 2.01(b) ) shall represent, for all purposes, in the case of Certificates representing Common Shares (other than Common Shares to be canceled pursuant to Section 2.01(b) ), only the right to receive an amount in cash equal to the Merger Consideration multiplied by the number of Common Shares formerly evidenced by such Certificate without any interest or dividends thereon.

(d) The consideration issued upon the surrender of Certificates in accordance with this Agreement shall be deemed to have been issued in full satisfaction of all rights pertaining to such Common Shares formerly represented thereby. After the Effective Time, there shall be no transfers on the stock transfer books of the Surviving Corporation of any Common Shares that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation, they shall be canceled and exchanged as provided in this Article 2 .

(e) Any portion of the Payment Fund (including any amounts that may be payable to the former Stockholders of the Company in accordance with the terms of this Agreement) which remains unclaimed by the former Stockholders of the Company upon the anniversary of the Closing Date shall be returned to the Surviving Corporation, upon demand, and any former Stockholders of the Company who have not theretofore complied with this Article 2 shall, subject to Section 2.03(f) , thereafter look to the Surviving Corporation only as general unsecured creditors thereof for payment of any Merger Consideration, without any interest or dividends thereon, that may be payable in respect of each Common Share held by such Stockholder. Following the Closing, the Agent shall retain the right to invest and reinvest the Payment Fund on behalf of the Surviving Corporation in securities listed or guaranteed by the United States government or as otherwise reasonably directed by the Surviving Corporation, and the Surviving Corporation shall receive the interest earned thereon.

(f) None of Merger Sub, the Company or Agent shall be liable to a holder of Certificates or any other person in respect of any cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. If any Certificates shall not have been surrendered by the sixth anniversary of the Closing Date (or immediately prior to such earlier date on which any Merger Consideration, dividends (whether in cash, stock or property) or other distributions with respect to Common Shares in respect of such Certificate would otherwise escheat to or become the property of any Governmental Authority (as defined in Section 3.03 ), any such shares, cash, dividends or distributions in respect of such Certificate shall, to the extent permitted by applicable law, become the property of the Surviving Corporation, free and clear of all claims or interests of any person previously entitled thereto.

(g) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit (in form and substance acceptable to the Surviving Corporation) of that fact by the person (who shall be the record owner of such Certificate) claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such person of a bond in such amount as the Surviving Corporation may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof pursuant to this Agreement. Parent and Company agree that, for U.S. federal income tax purposes, payments from the Payment Fund to former Stockholders pursuant to Section 2.03(c) shall not be treated as a dividend distribution even if the payments from the Payment Fund are attributable to Company deposits into the Payment Fund.

(h) Each of the Agent, the Surviving Corporation, Parent and PLC shall be entitled to deduct and withhold from the consideration otherwise payable to any holder of Common Shares or Options pursuant to this Agreement such amounts as may be required to be deducted or withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “ Code ”), or any applicable provision of state, local or foreign Tax law. To the extent that amounts are so deducted or withheld and paid over to the appropriate taxing authority by Agent, the Surviving Corporation, Parent or PLC, such amounts shall be treated for all purposes of this Agreement as having been paid to the person to whom such amounts would otherwise have been paid.

2.04 Adjustment of the Merger Consideration and the Cash-Pay Option Consideration .

The Merger Consideration and the Cash-Pay Option Consideration, each payable pursuant to this Article 2 , have been calculated based upon the representations and warranties made by the Company in Section 3.05 . In the event that, at the Effective Time, the actual number of Common Shares outstanding and/or the actual number of Common Shares issuable upon the exercise of Options or similar agreements, or upon conversion of securities (including without limitation, as a result of any stock split, reclassification, stock dividend (including any dividend or distribution of securities convertible into Common Shares) or recapitalization) is greater than as described in Section 3.05(a) (without giving effect to changes in the number of shares of Common Shares or the number of shares issuable upon the exercise of Options outstanding as a result of (i) the exercise of Options granted on or prior to the date hereof, (ii) the issuance of Common Shares upon the exercise of Options granted on or prior to the date hereof, (iii) the grant of Options following the date hereof to the extent permitted pursuant to Section 5.01(b) , the exercise of such Options or the issuance of Common Shares upon the exercise of such Options or (iv) the issuance of Common Shares pursuant to the ESPP), or if the weighted average exercise price of the Options is lower than described in the third sentence of Section 3.05(a) hereof (without giving effect to Options granted after the date hereof to the extent permitted pursuant to Section 5.01(b) ), the Merger Consideration and/or the Cash-Pay Option Consideration, as the case may be, shall be equitably adjusted downward. The provisions of this Section 2.04 shall not, in any event, adversely affect, constitute a waiver of or otherwise impair any of PLC’s, Parent’s or Merger Sub’s rights under this Agreement (including any of PLC’s, Parent’s or Merger Sub’s rights arising from any misrepresentation or breach of the representations and warranties set forth in Section 3.05 hereof).

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the corresponding section of the disclosure schedule delivered by the Company to Merger Sub, Parent and PLC prior to the execution of this Agreement (the “ Company Disclosure Schedule ”) (it being agreed that any disclosure set forth on any particular section of the Company Disclosure Schedule shall be deemed disclosed in another section of the Company Disclosure Schedule if disclosure with respect to the particular section is sufficient to make reasonably clear the relevance of the disclosure to such other section), the Company represents and warrants to each of Merger Sub, Parent and PLC as of the date hereof and as of the Effective Time that:

3.01 Corporate Existence and Power . The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all corporate powers required to carry on its business as now conducted. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect (as defined below). True and complete copies of the certificate of incorporation and bylaws of the Company as currently in effect have been filed with the Securities and Exchange Commission (the “ SEC ”) and referenced as exhibits in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2008. The Company is not in violation of any of the provisions of its certificate of incorporation or bylaws. As used in this Agreement, the term “ Company Material Adverse Effect ” means any circumstance, effect, event, or change that, individually or in the aggregate (i) had, or is reasonably likely to have, a materially adverse effect on the business, assets, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries, taken as a whole, other than resulting from any Excluded Matter or (ii) prevents or materially delays, or is reasonably likely to prevent or materially delay, the ability of the Company and its Subsidiaries to perform their obligations under this Agreement or to consummate the transactions contemplated hereby (the “ Transactions ”) in accordance with the terms hereof. As used in this Agreement, “ Excluded Matter ” means any one or more of the following: (a) changes in general economic conditions which do not have a materially disproportionate effect on the Company and its Subsidiaries taken as a whole, (b) changes affecting the specific industry in which the Company and its Subsidiaries operate which do not have a materially disproportionate effect on the Company and its Subsidiaries taken as a whole relative to other industry participants, (c) changes caused by the taking of any action required by this Agreement or the failure to take any action prohibited by this Agreement, (d) the taking of any action by the Company that has been previously approved in writing by Parent and Merger Sub, (e) changes resulting from a modification after the date of this Agreement in accounting rules or procedures announced by the Financial Accounting Standards Board with respect to U.S. generally accepted accounting principles, (f) changes resulting from a breach of this Agreement by PLC, Parent or Merger Sub, (g) changes resulting from any modification in any Law applicable to the Company, (h) any failure of the Company to meet internal projections or analysts’ expectations for any financial period ending after the date of this Agreement (provided that the underlying causes of such failure shall not be excluded pursuant to this clause (h)) or (j) changes that are attributable to the loss of customers, suppliers or employees due to the fact that Parent is to acquire the Company as a result of the consummation of the transactions contemplated hereby.

3.02 Corporate Authorization .

(a) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Transactions are within the Company’s corporate powers and, except for obtaining the Stockholder Approval, have been duly authorized by all necessary corporate action on the part of the Company. The affirmative vote of the holders of a majority of the outstanding Common Shares to approve and adopt this Agreement and to approve the Merger (the “ Stockholder Approval ”) is the only vote of the holders of any of the Company’s capital stock necessary in connection with the consummation of the Transactions. This Agreement constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar applicable Laws affecting creditors’ rights generally and by general principles of equity.

(b) At a meeting duly called and held prior to the execution of this Agreement at which all directors of the Company were present, the Company Board duly and unanimously adopted resolutions (i) declaring that this Agreement and the Transactions, including the Merger, are fair to and in the best interests of the Company’s stockholders, (ii) approving and declaring advisable this Agreement and the Transactions, including the Merger, in accordance with the requirements of the DGCL, (iii) approving and adopting an amendment to that certain Stockholder Rights Agreement, dated as of October 26, 2001, between the Company and Mellon Investor Services, L.L.C., as rights agent (as amended, the “ Rights Agreement ”) to render the preferred stock purchase rights issued thereunder (the “ Company Rights ”) inapplicable to the Merger, this Agreement and the Transactions, and (iv) recommending that the stockholders of the Company approve and adopt this Agreement.

3.03 Governmental Authorization . The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Transactions require no action by or in respect of, or filing with or notification to, any domestic (federal, state or local) or foreign government or governmental, regulatory or administrative authority, agency, commission, board, bureau, court or instrumentality or arbitrator of any kind (“ Governmental Authority ”), other than (i) the filing of the Merger Certificate with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (ii) compliance with applicable requirements of (A) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) and the rules and regulations thereunder and (B) any required consent, approval, authorization, permit, filing or notification pursuant to applicable foreign merger control or competition laws and regulations, (iii) compliance with applicable requirements of the Exchange Act, the Securities Act of 1933, as amended (the “ Securities Act ”) and other applicable securities laws, whether federal, state or foreign, (iv) compliance with applicable requirements of Nasdaq, or (v) actions, filings or notice the absence of which would not, individually or in the aggregate, have a Company Material Adverse Effect.

3.04 Non-contravention . The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Transactions do not and will not (a) contravene, conflict with, or result in any violation or breach of any provision of the certificate of incorporation or bylaws of the Company or equivalent organization documents of any Subsidiary of the Company, (b) assuming compliance with the matters referred to in Section 3.03, contravene, conflict with, or result in a violation or breach of any foreign or domestic (federal, state or local) law, statute, ordinance, rule, regulation, permit, license, injunction, writ, judgment, decree or order (each, a “ Law ” and, collectively, “ Laws ”) applicable to the Company or any of its Subsidiaries or by which any asset of the Company or any of its Subsidiaries is bound or affected, (c) conflict with, result in any breach, require any consent or action by another Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit the termination, amendment, cancellation, acceleration or require any payment under or other change of any right or obligation or the loss of any benefit to which the Company or any Subsidiary of the Company is entitled under any provision of any contract, instrument, permit, concession, franchise, license, loan or credit agreement, note, bond, mortgage, indenture, lease or other property agreement, partnership or joint venture agreement or other legally binding agreement, whether oral or written (each, a “ Contract ” and, collectively, “ Contracts ”) applicable to the Company or any such Subsidiary or their respective properties or assets, or any permit affecting, or relating in any way to, the assets or business of the Company and its Subsidiaries or (d) result in the creation or imposition of any a lien, claim, security interest or other charge, title imperfection or encumbrance (each, a “ Lien ” and, collectively, “ Liens ”) on any asset of the Company or any Subsidiary of the Company with such exceptions, in the case of each of clauses (a), (b), (c) and (d) of this Section 3.04, as would not, individually or in the aggregate, have a Company Material Adverse Effect.

3.05 Capitalization .

(a) The authorized capital stock of the Company consists of 200,000,000 shares of Common Shares and 1,000,000 shares of preferred stock, $0.01 par value per share, of the Company (“ Preferred Stock ”), 150,000 of which have been designated as Series D Junior Participating Preferred Stock and are reserved for issuance upon exercise of the Company Rights. As of the date of this Agreement, (i) 73,115,736 Common Shares were issued and outstanding, (ii) no shares of Preferred Stock were issued and outstanding, (iii) 14,402,193 Common Shares were reserved for issuance pursuant to the Stock Plans, of which 10,529,919 Common Shares are subject to outstanding Options, and (iv) no more than 2,113,118 Common Shares were reserved for issuance pursuant to options or other purchase rights then outstanding under the ESPP. Subject to Section 5.01(b) , the Company has outstanding Cash-Pay Options pursuant to which an aggregate of 1,787,500 Common Shares are issuable and the weighted average exercise price for such Cash-Pay Options is $0.39. All outstanding shares of capital stock of the Company have been, and all shares that may be issued pursuant to any Company Stock Plan will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued and are (or, in the case of shares that have not yet been issued, will be) fully paid, nonassessable and free of preemptive rights.

(b) Except, (x) as set forth in Section 3.05(a) , (y) for the rights issued pursuant to the Rights Agreement, or (z) for changes since the date of this Agreement resulting from the exercise of Options outstanding on such date and disclosed on Section 3.05 of the Company Disclosure Schedule and any additional changes since the date of this Agreement resulting from the grant of Options in accordance with Section 5.01(b) or the exercise thereof, there are not now, and at the Effective Time there will not be, any outstanding (i) shares of capital stock or voting securities of the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, (iii) options, warrants or other rights or arrangements to acquire from the Company, or other obligations or commitments of the Company to issue, transfer or sell any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities or other equity interests in, the Company or any Subsidiary of the Company, (iv) restricted shares, restricted share units, stock appreciation rights, performance shares, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities or ownership interests in, the Company, (v) voting trusts, proxies or other similar agreements or understandings to which the Company or any of its Subsidiaries is a party granting to any person or group of persons the right to elect, or to designate or nominate for election, a director to the Company Board or by which the Company or any of its Subsidiaries is bound with respect to the voting of any shares of capital stock of the Company or any of its Subsidiaries, (vi) contractual obligations or commitments of any character to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound restricting the transfer of, or requiring the registration for sale of, any shares of capital stock of the Company or any of its Subsidiaries, or (vii) obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the capital stock of the Company. No capital stock of the Company is owned by any Subsidiary of the Company.

(c) (i) Section 3.05(c) of the Company Disclosure Schedule identifies, with respect to each Option outstanding as of the date of this Agreement, (A) the name of each holder of such Option, (B) the number of shares subject to such Option, (C) the exercise price of such Option, (D) the number of shares subject to such Option that are vested, (E) the vesting schedule of such Option and (F) the grant date of such Option; (ii) the Stock Plans set forth on Section 3.05(c) of the Company Disclosure Schedule are the only plans or programs the Company or any of its Subsidiaries has maintained under which stock options, restricted shares, restricted share units, stock appreciation rights, performance shares or other compensatory equity-based awards have been granted and remain outstanding or may be granted; (iii) all Options may, by their terms, be treated in accordance with Section 2.02(b) ; and (iv) no Options (other than the Options specifically listed on Section 3.05(c) of the Company Disclosure Schedule or granted in accordance with Section 5.01(b) ) shall become vested or exercisable.

(d) With respect to the Options, (i) each grant of an Option was duly authorized no later than the date on which the grant of such Option was by its terms to be effective (the “ Grant Date ”) by all necessary corporate action, including, as applicable, approval by the Company Board (or a duly constituted and authorized committee thereof), or a duly authorized delegate thereof, and any required stockholder approval by the necessary number of votes or written consents, (ii) each such grant was made in accordance with the terms of the applicable Stock Plan, the Exchange Act and all other applicable Laws, including the Nasdaq Marketplace Rules, (iii) the per share exercise price of each Option was not, and will not be deemed to be, less than the fair market value of a Common Share on the applicable Grant Date, and (iv) each such grant was properly accounted for in all material respects in accordance with generally accepted accounting principles in the United States in the financial statements (including the related notes) of the Company and disclosed in the SEC Reports (as defined in Section 3.07(a) ) in accordance with the Exchange Act and all other applicable Laws.

3.06 Subsidiaries .

(a) Each Subsidiary of the Company is an organization duly formed, validly existing and in good standing under the laws of its jurisdiction of organization and has all organizational powers required to carry on its business as now conducted. Each such Subsidiary is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. All “significant subsidiaries” (as defined in Regulation S-K under the Exchange Act; provided however that the 10% threshold referred to in such definition shall be deemed to be 5% for the purposes of this Agreement) of the Company and their respective jurisdictions of organization are identified in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2008. Section 3.05 of the Company Disclosure Schedule sets forth for each Subsidiary of the Company: (i) its authorized capital stock or share capital; (ii) the number of issued and outstanding shares of capital stock or share capital; and (iii) the Company’s direct or indirect equity interest therein. Except for equity interest in its Subsidiaries, the Company does not own, directly or indirectly, any capital stock or other ownership interest in any Person. No Subsidiary of the Company owns, directly or indirectly, any capital stock or other ownership interest in any Person, except for the capital stock and/or other ownership interest in another wholly-owned Subsidiary of the Company. The Company has heretofore made available to Parent and Merger Sub a complete and correct copy of the certificate of incorporation and the bylaws (or equivalent organizational documents) of each Subsidiary of the Company in full force and effect as of the date hereof. No Subsidiary of the Company is in violation of any of the provisions of its certificate of incorporation or bylaws (or equivalent organizational documents).

(b) All of the outstanding capital stock of, or other voting securities or ownership interests in, each Subsidiary of the Company is owned by the Company, directly or indirectly, free and clear of any Lien and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other voting securities or ownership interests), except for such restrictions resulting from local applicable Laws. There are no outstanding (i) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or other voting securities or ownership interests in any Subsidiary of the Company, (ii) options, warrants or other rights or arrangements to acquire from the Company or any of its Subsidiaries, or other obligations or commitments of the Company or any of its Subsidiaries to issue, any capital stock of or other voting securities or ownership interests in, or any securities convertible into or exchangeable for any capital stock of or other voting securities or ownership interests in, any Subsidiary of the Company, or (iii) restricted shares, stock appreciation rights, performance shares, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities or ownership interests in, any Subsidiary of the Company. There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the capital stock of any of the Company’s Subsidiaries.

(c) Neither the Company nor any of its Subsidiaries directly or indirectly owns any equity, ownership, profit, voting or similar interest in or any interest convertible, exchangeable or exercisable for, any equity, profit, voting or similar interest in, any Person (other than a Subsidiary of the Company).

3.07 SEC Filings .

(a) The Company has timely filed with the SEC all documents (including exhibits and any amendments thereto) required by Law to be so filed by it since January 1, 2006. The Company has delivered, or otherwise made available through the Company’s filings with the SEC, to Parent (i) the Company’s annual reports on Form 10-K for its fiscal years ended December 31, 2008, 2007 and 2006, (ii) its proxy or information statements relating to meetings of, or actions taken without a meeting by, the stockholders of the Company since December 31, 2007, and (iii) all of its other reports, statements, schedules and registration statements filed with the SEC since January 1, 2006 (the documents referred to in this Section 3.07 , together with all information incorporated by reference therein in accordance with applicable SEC regulations, are collectively referred to in this Agreement as the “ SEC Reports ”).

(b) As of its filing date, the SEC Reports complied, and each such SEC Report filed subsequent to the date hereof will comply, as to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the published rules and regulations of the SEC thereunder, as the case may be, each as in effect on its respective filing date.

(c) As of its filing date (or, if amended or superseded by a filing prior to the date hereof, on the date of such filing), each SEC Report filed pursuant to the Securities Act did not, and each such SEC Report filed subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

(d) Each SEC Report that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the Securities Act, as of the date such registration statement or amendment became effective (or, if amended or superseded by a subsequent filing prior to the date hereof, on the date of such filing), did not, and each such SEC Report filed subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

(e) Each required form, report and document containing financial statements that has been filed with or submitted to the SEC by the Company since August 14, 2002, was accompanied by the certifications required to be filed or submitted by the Company’s chief executive officer and/or chief financial officer, as required, pursuant to the Sarbanes-Oxley Act and, at the time of filing or submission of each such certification, such certification was true and accurate and complied with the Sarbanes-Oxley Act. As of the date of this Agreement, no Subsidiary of the Company is subject to the periodic reporting requirements of the Exchange Act. None of the Company, any current executive officer of the Company or, to the Company’s knowledge, any former executive officer of the Company has received written notice from any Governmental Authority challenging or questioning the accuracy, completeness, form or manner of filing of such certifications made with respect to the SEC Reports filed prior to the date of this Agreement.

3.08 Financial Statements; Internal Controls .

(a) The audited consolidated financial statements and unaudited consolidated interim financial statements of the Company included in the SEC Reports (i) comply, as of their respective filing dates with the SEC, in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto (including Regulation S-X), (ii) have been prepared in accordance with generally accepted accounting principles in the United States applied on a consistent basis during the periods involved (except, in the case of unaudited statements, for the absence of footnotes), and (iii) fairly present (except as may be indicated in the notes thereto) the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and their consolidated results of operations and cash flows for the periods then ended (subject to normal year-end adjustments in the case of any unaudited interim financial statements). Except as set forth on Section 3.08(a) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries have any Indebtedness.

(b) The Company’s system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) is reasonably sufficient in all material respects to provide reasonable assurance (i) that transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in the United States, (ii) that receipts and expenditures are executed in accordance with the authorization of management, and (iii) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of the Company’s assets that would materially affect the Company’s financial statements. No significant deficiency or material weakness was identified in management’s assessment of internal controls as of December 31, 2008 (nor has any such deficiency or weakness been identified between that date and the date of this Agreement).

(c) The Company’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are reasonably designed to ensure that (i) all information (both financial and non-financial) required to be disclosed by the Company in the reports that it files or submits under the Securities Act is recorded, processed, summarized and reported to the individuals responsible for preparing such reports within the time periods specified in the rules and forms of the SEC, and (ii) all such information is accumulated and communicated to the Company’s management or to other individuals responsible for preparing such reports as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the principal executive officer and principal financial officer of the Company required under the Exchange Act with respect to such reports.

(d) The audit committee of the Company Board includes an Audit Committee Financial Expert, as defined by Item 407(d)(5)(ii) of Regulation S-K.

(e) The Company has adopted a code of ethics, as defined by Item 406(b) of Regulation S-K, for senior financial officers, applicable to its principal financial officer, comptroller or principal accounting officer, or persons performing similar functions. The Company has promptly disclosed any change in or waiver of the Company’s code of ethics with respect to any such persons, as required by Form 8-K. To the knowledge of the Company, there have been no violations of provisions of the Company’s code of ethics by any such persons.

(f) Except as set forth in Section 3.08(f) of the Company Disclosure Schedule, none of the Company or any of its Subsidiaries is indebted to any director or officer of the Company or any of its Subsidiaries (except for amounts due as normal salaries and bonuses or in reimbursement of ordinary business expenses and directors ’ fees) and no such person is indebted to the Company or any of its Subsidiaries, and there have been no other transactions of the type required to be disclosed pursuant to Items 402 or 404 of Regulation S - K promulgated by the SEC.

3.09 Disclosure Documents .

(a) Each document required to be filed by the Company with the SEC or required to be distributed or otherwise disseminated to the Company’s stockholders in connection with the Transactions (the “ Company Disclosure Documents ”), including the proxy or information statement of the Company (the “ Proxy Statement ”) to be filed with the SEC for use in connection with the solicitation of proxies from the Company’s stockholders in connection with the adoption of this Agreement and the Company Stockholders Meeting, and any amendments or supplements thereto, when filed, distributed or disseminated, as applicable, will comply as to form and substance in all material respects with the applicable requirements of the Exchange Act.

(b) (i) The Proxy Statement, as supplemented or amended, if applicable, at the time such Proxy Statement or any amendment or supplement thereto is first mailed to stockholders of the Company, at the time such stockholders vote on adoption of this Agreement and at the Effective Time, and (ii) any Company Disclosure Documents (other than the Proxy Statement), at the time of the filing of such Company Disclosure Documents or any supplement or amendment thereto and at the time of any distribution or dissemination thereof, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties contained in this Section 3.09(b) will not apply to statements or omissions included in the Company Disclosure Documents based upon information furnished to the Company in writing by Parent specifically for use therein.

3.10 Absence of Certain Changes .

(a) Since December 31, 2008, (i) the business of the Company and each of its Subsidiaries has been conducted in the ordinary course consistent with past practice, (ii) there has not been any event, change, development or set of circumstances that has had or is reasonably expected to have, individually or in the aggregate, a Company Material Adverse Effect, and (iii) through the date of this Agreement, there has not been any action or event, nor any authorization, commitment or agreement by the Company or any of its Subsidiaries with respect to any action or event, that if taken or if it occurred after the date hereof would be prohibited by Section 5.01 .

(b) Since December 31, 2008, none of the Company and its Subsidiaries has engaged, except in the ordinary course of business consistent with past practice, in (i) any trade loading practices or any other promotional sales or discount activity with any customers or distributors with the intent of accelerating to prior fiscal quarters (including the current fiscal quarter) sales to the trade or otherwise that would otherwise be expected to occur in subsequent fiscal quarters, (ii) any practice which would have the effect of modifying the fiscal quarter during which collections of receivables or payments by the Company or any of its Subsidiaries occur such that such collections or payments occur during a fiscal quarter other than as would be expected based on past practice, or (iii) any other promotional sales or discount activity similar to that described in clauses (i) and (ii) above.

3.11 No Undisclosed Material Liabilities . There are no liabilities or obligations of the Company or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances that would reasonably be expected to result in such a liability or obligation, other than:

(a) liabilities or obligations disclosed and provided for in the Company’s balance sheet as of December 31, 2008 (the “ Company Balance Sheet ”);

(b) normal or recurring liabilities incurred since December 31, 2008 in the ordinary course of business and in amounts consistent with past practice that would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect; and

(c) liabilities or obligations expressly contemplated by this Agreement.

3.12 Litigation .

(a) There is no suit, claim, action, proceeding or investigation (“ Proceeding ”) pending or, to the knowledge of the Company, threatened against, the Company or any of its Subsidiaries or any of their respective businesses or assets or any of the directors or employees of the Company or any of its Subsidiaries or, to the knowledge of the Company, its stockholders or representatives (in each case insofar as any such matters relate to their activities with the Company or any of its Subsidiaries) at law or in equity, or before any Governmental Authority, arbitrator or arbitration panel. Neither the Company nor any of its Subsidiaries is subject to any order, writ, injunction or decree against the Company or any of its Subsidiaries or naming the Company or any of its Subsidiaries as a party or, to the knowledge of the Company, by which any of the employees or representatives of the Company or any of its Subsidiaries is prohibited or restricted from engaging in or otherwise conducting the business of the Company or any of its Subsidiaries as presently conducted.

(b) To the knowledge of the Company, there is no investigation or review by any Governmental Authority or self-regulatory authority with respect to the Company or any of its Subsidiaries (excluding investigations and reviews of Proprietary Rights applications by the intellectual property offices of a Governmental Authority) or any of their respective employees (insofar as any such investigation or review relates to their activities with the Company or any of its Subsidiaries) pending or threatened, nor has any Governmental Authority or self-regulatory authority indicated to the Company or any of its Subsidiaries in writing or, to the knowledge of the Company, verbally, an intention to conduct the same.

3.13 Compliance with Law .

(a) The Company and its Subsidiaries and their businesses and operations are and, since January 1, 2006 have been, in compliance with all Laws applicable to the Company or such Subsidiaries, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received any written notice since January 1, 2006 (i) of any administrative or civil, or criminal investigation or audit (other than Tax audits) by any Governmental Authority relating to the Company or any of its Subsidiaries or any of their respective properties or assets, or (ii) from any Governmental Authority alleging that the Company or any of its Subsidiaries is not in compliance with any Law or Order.

(b) Each of the Company and its Subsidiaries has in effect all material permits necessary for it to own, lease or otherwise hold and to operate its real properties and tangible assets and to carry on its businesses and operations as now conducted. Since January 1, 2006, there have occurred no material defaults (with or without notice or lapse of time or both) under, violations of, or events giving to others any right of termination, amendment or cancellation, with or without notice or lapse of time or both, of, any such permit. The Transactions would not reasonably be expected to cause the revocation or cancellation (with or without notice or lapse of time or both) of any such permit.

3.14 Contracts .

(a) Neither the Company nor any of its Subsidiaries is a party to any of the following types of Contracts (each such Contract and each Contract disclosed on the Company Disclosure Schedule being referred to in this Agreement as a “ Material Contract ”):

(i) Contract required to be filed by the Company with the SEC pursuant to Item 601 of Regulation S-K under the Securities Act;

(ii) Contract (A) that involves performance of services or delivery of goods, materials, supplies or equipment or developmental commitments to the Company or any of its Subsidiaries, or the payment therefor by the Company or any of its Subsidiaries, in either case providing for an annual payment by the Company of $100,000 or more or (B) between the Company and any distributor or reseller of the products of the Company or any of its Subsidiaries that holds inventory of the products of the Company or any of its Subsidiaries (“ Product Inventory ”) whose aggregate value, as of December 31, 2008, exceeded $100,000, pursuant to which the Company or any of its Subsidiaries may be required to repurchase Product Inventory upon the termination of such Contract;

(iii) Contract that contains any exclusivity provisions restricting the Company or any of its affiliates or limits the freedom of the Company or any of its affiliates to compete in any line of business or with any Person or in any area or which would so limit the freedom of the Company or any of its affiliates after the Closing Date;

(iv) lease or sublease (whether of real or personal property) to which the Company or any of its Subsidiaries is party as either lessor or lessee, providing for either (i) annual payments of $100,000 or more or (ii) aggregate payments after the date hereof of $100,000 or more;

(v) Contract relating in whole or in part to the use, exploitation or practice of any Proprietary Right by the Company or any of its Subsidiaries (including any license or other Contract under which the Company or any of its Subsidiaries is licensee or licensor of any such Proprietary Right (other than Contracts providing for annual payments of less than $300,000 and Contracts licensing off the shelf software with a total replacement cost of less than $100,000);

(vi) Contract relating to Indebtedness (whether incurred, assumed, guaranteed or secured by any asset);

(vii) Contract under which the Company or any of its Subsidiaries has, directly or indirectly, made any loan, capital contribution to, or other investment in, any Person (other than the Company or any of its Subsidiaries and other than investments in marketable securities in the ordinary course of business consistent with past practices);

(viii) Contract under which the Company or any of its Subsidiaries has any obligations which have not been satisfied or performed (other than confidentiality obligations) relating to the acquisition or disposition of any business (whether by merger, sale of stock, sale of assets or otherwise);

(ix) Contract providing for indemnification of any Person with respect to liabilities relating to any current or former business of the Company, any of its Subsidiaries or any predecessor Person other than indemnification obligations of the Company or any of its Subsidiaries pursuant to the provisions of a Contract entered into by the Company or any of its Subsidiaries in the ordinary course of business consistent with past practices;

(x) partnership, joint venture or other similar Contract or arrangement; or

(xi) employee collective bargaining agreement or other Contract with any labor union or employment Contract (other than for employment at-will or similar arrangements).

(b) Neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any other party thereto, is in violation of or in default under (nor does there exist any condition, and no event or circumstances have occurred, which upon the passage of time or the giving of notice would cause such a violation of or default under) in any material respect in any Material Contract. Each Material Contract is a valid and binding agreement of the Company or its Subsidiary, as applicable, and, to the knowledge of the Company, any other party thereto, and is in full force and effect except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar Laws affecting creditors’ rights generally and by general principles of equity.

3.15 Taxes .

(a) All material Tax Returns required by applicable Law to be filed with any Taxing Authority by, or on behalf of, the Company or any of its Subsidiaries have been filed when due in accordance in all material respects with all applicable Laws (taking into account any extension of time which has been granted within which to file), and all such Tax Returns are, or shall be at the time of filing, true and complete in all material respects.

(b) The Company and each of its Subsidiaries has paid (or has had paid on its behalf) or has withheld and remitted to the appropriate Taxing Authority all Taxes due and payable, or, where payment is not yet due or where Taxes are being contested in good faith, has established (or has had established on its behalf and for its sole benefit and recourse) in accordance with generally accepted accounting principles in the United States an adequate accrual for all material Taxes through the end of the last period for which the Company and its Subsidiaries ordinarily record items on their respective books.

(c) The U.S. federal and state income and franchise Tax Returns of the Company and its Subsidiaries through the Tax year ended December 31, 2003 have been examined and closed or are Tax Returns with respect to which the applicable period for assessment under applicable Law, after giving effect to extensions or waivers, has expired.

(d) There are no material Liens or encumbrances for Taxes on any of the assets of the Company or any of its Subsidiaries.

(e) No federal, state, local or foreign audits, examinations, investigations or other Proceedings are pending or, to the knowledge of the Company, threatened with regard to any Taxes or Tax Returns of the Company or its Subsidiaries.

(f) There is currently no effective agreement or other document extending, or having the effect of extending, the period of assessment or collection of any Taxes with respect to the Company or any of its Subsidiaries.

(g) Neither the Company nor any of its Subsidiaries has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code in the five years prior to the date of this Agreement.

(h) Neither the Company nor any of its Subsidiaries has participated in a “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(1).

(i) Except as set forth in Section 3.15(i) of the Company Disclosure Schedule, there is no Contract or other arrangement, plan or agreement by or with the Company or any of its subsidiaries covering any person that, individually or collectively, could give rise to the payment of any amount by the Company or any of its subsidiaries that would not be deductible by the Company or such subsidiary by reason of Sections 280G or 162(m) of the Code (or any corresponding provision of state, local or foreign law).

(j) “ Tax ” means (i) any tax, governmental fee or other like assessment or charge of any kind whatsoever (including withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any Governmental Authority responsible for the imposition of any such tax (domestic or foreign) (a “ Taxing Authority ”), and any liability for any of the foregoing as transferee, (ii) in the case of the Company or any of its Subsidiaries, liability for the payment of any amount of the type described in clause (i) as a result of being or having been before the Effective Time a member of an affiliated, consolidated, combined or unitary group, or a party to any agreement or arrangement, as a result of which liability of a Person or any of its Subsidiaries to a Taxing Authority is determined or taken into account with reference to the activities of any other Person, and (iii) liability of a Person or any of its Subsidiaries for the payment of any amount as a result of being party to any Tax Sharing Agreement or with respect to the payment of any amount imposed on any Person of the type described in (i) or (ii) as a result of any existing express or implied agreement or arrangement (including an indemnification agreement or arrangement). “ Tax Return ” means any report, return, document, declaration or other information or filing required to be supplied to any Taxing Authority with respect to Taxes, including information returns, any documents with respect to or accompanying payments of estimated Taxes, or with respect to or accompanying requests for the extension of time in which to file any such report, return, document, declaration or other information. “ Tax Sharing Agreements ” means all existing agreements or arrangements (whether or not written) binding a Person or any of its Subsidiaries that provide for the allocation, apportionment, sharing or assignment of any Tax liability or benefit, or the transfer or assignment of income, revenues, receipts or gains for the purpose of determining any Person’s Tax liability (excluding any indemnification agreements or arrangements pertaining to the sale or lease of assets of the Company or any of its Subsidiaries).

3.16 Employee Benefit Plans .

(a) Except as disclosed in Section 3.16(a) of the Company Disclosure Schedule, there exist no employment, consulting, severance, retention, termination or change-of-control agreements, arrangements or understandings between the Company or any of its Subsidiaries and any individual current or former employee, independent contractor, officer or director (or any dependent, beneficiary or relative of any of the foregoing) of the Company or any of its Subsidiaries (collectively, the “ Employees ”) with respect to which the annual cash, noncontingent payments thereunder exceed $150,000 or where the contingent and noncontingent annual compensation is reasonably likely to exceed $200,000.

(b) “ Benefit Plans ” means each “employee benefit plan,” as defined in Section 3(3) of ERISA, each employment, severance or similar contract, plan, arrangement or policy and each other plan or arrangement providing for compensation, bonuses, profit-sharing, stock option or other stock related rights or other forms of incentive or deferred compensation, vacation benefits, insurance (including any self-insured arrangements), health or medical benefits, employee assistance program, disability or sick leave benefits, workers’ compensation, supplemental unemployment benefits, severance benefits and post-employment or retirement benefits (including compensation, pension, health, medical or life insurance benefits) which (i) are maintained, administered or contributed to by the Company or any affiliate of the Company as of the date of this Agreement and covers any Employees, or (ii) with respect to which the Company or any of its Subsidiaries has any liability. With respect to Benefit Plans, programs, and other arrangements providing incentive compensation or other benefits similar to those provided under any Benefit Plans to any Employee, which plan, program or arrangement is subject to the laws of any jurisdiction outside the United States (“ Foreign Plans ”), (A) to the knowledge of the Company, the Foreign Plans have been maintained in all material respects in accordance with all applicable Laws, (B) if intended to qualify for special Tax treatment, the Foreign Plans meet all requirements for such treatment, (C) if intended to be funded and/or book-reserved, the Foreign Plans are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions, and (D) no liability which could be material to the Company and its Subsidiaries taken as a whole exists or reasonably could be imposed upon the assets of the Company or any of its Subsidiaries by reason of such Foreign Plans, other than to the extent reflected on the Company Balance Sheet.

(c) Neither the Company nor any ERISA Affiliate nor any predecessor thereof sponsors, maintains or contributes to, has in the past sponsored, maintained or contributed to, or otherwise has any liability with respect to (i) any Benefit Plan subject to Title IV of ERISA, (ii) any non-U.S. defined benefit plan, or (iii) any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA.

(d) Each Benefit Plan which is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter, or has pending or has time remaining in which to file an application for such determination, from the Internal Revenue Service, and the Company is not aware of any facts that would result in revocation of any such determination letter. The Company has made available to Parent copies of the most recent Internal Revenue Service determination letters with respect to each such Benefit Plan. Each Benefit Plan has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations, including ERISA and the Code, which are applicable to such Benefit Plan. The Company has no knowledge of the occurrence of any events with respect to any Benefit Plan that could result in payment or assessment by or against the Company of any excise Taxes under Sections 4972, 4975, 4976, 4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code.

(e) Except as disclosed in Section 3.16(e) of the Company Disclosure Schedule, the consummation of the Transactions will not (either alone or together with any other event) entitle any employee, director or independent contractor of the Company or any of its Subsidiaries to severance pay or accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable or trigger any other material obligation pursuant to, any agreement, any Benefit Plan or other employee plan.

(f) Neither the Company nor any of its Subsidiaries has any material liability in respect of post-retirement health, medical or life insurance benefits for Employees of the Company or any of its Subsidiaries except as required to avoid excise Tax under Section 4980B of the Code. All contributions, premiums and other payments that are due have been paid with respect to each Benefit Plan. Except as disclosed in Section 3.16(f) of the Company Disclosure Schedule, no unfunded liabilities with respect to any Benefit Plans exist.

(g) There is no Proceeding pending against or involving (and, to the knowledge of the Company, there is no audit or investigation pending or threatened, and there is no Proceeding threatened, against or involving), any Benefit Plan or any fiduciary thereof with respect to their duties under the Benefit Plan or the assets of any of the trusts thereunder, before any court or arbitrator or any Governmental Authority.

(h) The Company has identified in Section 3.16(h) of the Company Disclosure Schedule and has made available to Parent true and complete copies of (i) all Benefit Plans, (ii) all severance plans and agreements and employment agreements with or relating to directors or executive officers of the Company or any of its Subsidiaries, and (iii) all plans, programs, agreements and other arrangements of the Company and each of its Subsidiaries with or relating to its Employees which contain change in control provisions. Section 3.16(h) of the Company Disclosure Schedule sets forth the amount of any compensation or remuneration of any kind or nature which is or may become payable to any Employee, in whole or in part, by reason of the execution and delivery of this Agreement or the consummation of the Transactions (the “ Change of Control Payments ”).

3.17 Labor and Employment Matters .

(a) Neither the Company nor any of its Subsidiaries is a party to, or bound by, any collective bargaining agreements or understandings with any labor unions or labor organizations. There is no (i) unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceeding pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries relating to their businesses, (ii) activity or proceeding by a labor union or representative thereof to the knowledge of the Company to organize any emplo