AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

 

A GREEMENT AND P LAN OF M ERGER

B Y AND A MONG

A GILENT T ECHNOLOGIES , I NC .,

C OBALT A CQUISITION C ORP .

AND

V ARIAN , I NC .

J ULY  26, 2009

 

A GREEMENT AND P LAN OF M ERGER

This A GREEMENT AND P LAN OF M ERGER (this “ Agreement ”) is made and entered into as of July 26, 2009 (the “ Agreement Date ”) by and among Agilent Technologies, Inc., a Delaware corporation (“ Acquiror ”), Cobalt Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Acquiror (“ Merger Sub ”), and Varian, Inc., a Delaware corporation (the “ Company ”).

R ECITALS

A. The parties intend that, subject to the terms and conditions hereinafter set forth, Merger Sub shall merge with and into the Company (the “ Merger ”), with the Company to be the surviving corporation of the Merger (the “ Surviving Corporation ”), on the terms and subject to the conditions of this Agreement and pursuant to the Certificate of Merger substantially in the form attached hereto as Exhibit A (the “ Certificate of Merger ”) and the applicable provisions of the laws of the State of Delaware.

B. The Boards of Directors of Acquiror, Merger Sub and the Company have determined that the Merger is in the best interests of their respective companies and stockholders and have approved and declared advisable the Merger, this Agreement and the other transactions contemplated by this Agreement. The Board of Directors of the Company has determined to recommend to its stockholders the adoption of this Agreement.

C. Concurrently with the execution and delivery of this Agreement, and as a material inducement to Acquiror’s willingness to enter into this Agreement, each stockholder of the Company listed on Exhibit B-1 attached hereto is executing and delivering to Acquiror a Voting Agreement substantially in the form attached hereto as Exhibit B-2 (the “ Voting Agreement ”) pursuant to which, subject to the terms and conditions set forth therein, such stockholder has agreed to vote all shares of the Company’s capital stock owned by it in favor of adoption of this Agreement and to give Acquiror an irrevocable proxy to do the same.

D. Acquiror, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and to prescribe various conditions to the Merger.

N OW , T HEREFORE , in consideration of the foregoing and the mutual representations, warranties, covenants and conditions contained herein, the parties hereby agree as follows:

ARTICLE 1

C ERTAIN D EFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below.

“ Affiliate ” means with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by Contract, as trustee or executor, or otherwise.

“ Alternative Transaction ” means with respect to the Company, any of the following transactions (other than any such transaction with Acquiror or any of its Affiliates): (a) any acquisition or purchase from the Company by any Person or Group of more than a 15% interest in the total outstanding voting securities of the Company or any tender offer or exchange offer that if consummated would result in any Person or Group beneficially owning securities representing 15% or more of the total outstanding voting power of the Company, or any merger, consolidation, business combination, share exchange or similar transaction involving the Company pursuant to which the stockholders of the Company immediately preceding such transaction hold securities representing less than 85% of the total outstanding voting power of the surviving or resulting entity of such transaction (or parent entity of such surviving or resulting entity); (b) any sale, lease, exchange, transfer, license (other than a license in the ordinary course of business) or disposition of assets (including capital stock or other ownership interests in Subsidiaries) representing 15% or more of the aggregate fair market value of the consolidated assets of the Company and the Company Subsidiaries taken as a whole; (c) any liquidation or dissolution of the Company; or (d) any extraordinary dividend, whether of cash or other property.

“ Alternative Transaction Proposal ” means any offer, proposal or indication of interest (whether binding or non-binding) to the Company or Company Stockholders relating to an Alternative Transaction.

“ Antitrust Filings ” means notification and report forms relating to the transactions contemplated by this Agreement filed with the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice as required by the HSR Act, as well as comparable pre-merger notification forms required by the merger notification or control laws and regulations of any applicable jurisdiction.

“ Applicable Law ” means with respect to any Person, any federal, state, foreign, local, municipal or other law, statute, ordinance, code, permit, rule or regulation issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority and any orders, writs, injunctions, awards, judgments and decrees applicable to such Person or its Subsidiaries, their business or any of their respective assets or properties.

“ Balance Sheet Date ” means April 3, 2009, the date of the Company Balance Sheet.

“ Business Day ” shall mean a day (a) other than Saturday or Sunday, and (b) on which commercial banks are open for business in San Francisco, California.

“ Cash Amount Per Share ” means $52.00.

“ Change of Recommendation ” means the withholding, withdrawal, amendment, qualification or modification, in a manner adverse to Acquiror, of the Company Board’s

recommendation in favor of adoption of this Agreement and in the case of a tender or exchange offer made by a third party directly to the Company Stockholders , a failure, within ten Business Days after such tender or exchange offer shall have been first published, sent or given, to have sent to its security holders pursuant to Rule 14e-2 promulgated under the Exchange Act a statement disclosing that the Company Board recommends that Company Stockholders reject such tender offer or exchange offer and not tender any shares of Company Stock into such tender offer or exchange offer.

“ Closing ” means the closing of the transactions contemplated hereby.

“ Closing Date ” means the second Business Day after the satisfaction or waiver of the conditions set forth in Article 8 (excluding conditions that by their terms are to be satisfied on the Closing Date, but subject to the satisfaction or waiver of such conditions) or on such other date as may be mutually agreed in writing by the Company and Acquiror.

“ COBRA ” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“ Code ” means the Internal Revenue Code of 1986, as amended. Any reference to a specific section of the Code herein will include such section, any valid regulation or Internal Revenue Service guidance promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

“ Company Acquisition ” means, an Alternative Transaction; provided that for purposes of this definition of “Company Acquisition,” (a) each reference to “15%” in the definition of “Alternative Transaction” shall be deemed to be a reference to “50%”, (b) each reference to “85%” in the definition of “Alternative Transaction” shall be deemed to be a reference to “50%”, and (c) clauses (c) and (d) of the definition of “Alternative Transaction” shall be disregarded.

“ Company Balance Sheet ” means the Company’s unaudited consolidated balance sheet as of April 3, 2009 included in the Company Financial Statements.

“ Company Board ” means the board of directors of the Company.

“ Company Business ” means the business of the Company and the Company Subsidiaries as presently conducted, including the production, marketing, sale, support and distribution of all current products and current services.

“ Company Capital Stock ” means the capital stock of the Company.

“ Company Charter Documents ” means the Certificate of Incorporation (including any Certificates of Designation) and Bylaws of the Company, each as amended to date.

“ Company Common Stock ” means the Common Stock, $0.01 par value per share, of the Company.

“ Company Director Stock Units ” means a grant to a Director (as defined under the Company Option Plan) of the right to receive a share of Company Common Stock on a future date under the Company Option Plan.

“ Company ESPP ” means the Company Employee Stock Purchase Plan.

“ Company Option Plan ” means the Company Omnibus Stock Plan, as amended November 8, 2007.

“ Company Options ” means options to purchase shares of Company Common Stock, whether or not under the Company Option Plan, but excluding Company Director Stock Units and options under the Company ESPP.

“ Company Preferred Stock ” means the Preferred Stock, par value $0.01 per share, of the Company.

“ Company Securityholders ” means Company Stockholders, holders of Company Preferred Stock, holders of Company Options, holders of Company Stock-Based Awards and holders of Company Director Stock Units.

“Company Stock-Based Award ” shall mean each right of any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the value of a number of shares of Company Common Stock granted under the Company Option Plan, (including performance shares, restricted stock, restricted stock units, phantom units, deferred stock units and dividend equivalents), other than Company Options, Company Director Stock Units and options awarded under the ESPP.

“ Company Stockholders ” means the holders of shares of Company Common Stock.

“ Company Subsidiary ” means a Subsidiary of the Company.

“ Confidentiality Agreement ” means that certain Confidentiality Agreement by and between Acquiror and the Company dated as of May 18, 2009.

“ Contract ” means any written or oral legally binding contract, agreement, instrument, commitment, obligation or undertaking (including subcontracts, leases, subleases, licenses, sublicenses, mortgages, notes, guarantees, indentures, warranties, guarantees, insurance policies, benefit plans and purchase orders).

“ Delaware Law ” means the Delaware General Corporation Law, as amended.

“ Debt ” means the outstanding amount of (a) indebtedness for borrowed money, (b) amounts owing as deferred purchase price for the purchase of any property, (c) indebtedness evidenced by any bond, debenture, note, mortgage, indenture or other debt instrument or debt security, (d) amounts owing under any capitalized or synthetic leases, (e) obligations secured by any

Encumbrances (other than Permitted Encumbrances), (f) contingent reimbursement obligations under letters of credit, and (g) guarantees or sureties with respect to any indebtedness or obligation of a type described in clauses (a) through (f) above of any Person, of the Company or any of the Company Subsidiaries.

“ Dissenting Shares ” shall mean any shares of Company Capital Stock that are issued and outstanding immediately prior to the Effective Time and in respect of which appraisal rights shall have been perfected in accordance with Delaware Law in connection with the Merger and shall not have been effectively waived, withdrawn or lost.

“ Effective Time ” means the time of the filing of the Certificate of Merger (or such later time as may be mutually agreed in writing by the Company and Acquiror and specified in the Certificate of Merger).

“ Encumbrance ” means, with respect to any asset, any mortgage, deed of trust, lien, pledge, charge, security interest, title retention device, collateral assignment, adverse claim, restriction or other encumbrance of any kind in respect of such asset (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended. Any reference to a specific section of ERISA herein will include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

“ ERISA Affiliate ” means any entity which is a member of: (a) a “controlled group of corporations,” as defined in Section 414(b) of the Code; (b) a group of entities under “common control,” as defined in Section 414(c) of the Code; or (c) an “affiliated service group,” as defined in Section 414(m) of the Code, or treasury regulations promulgated under Section 414(o) of the Code, any of which includes the Company.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.

“ Form Agreement ” means any Contract that does not deviate in any material respect from the “form of” such Contract delivered by the Company to Acquiror and labeled as the “form of” such Contract.

“ GAAP ” means United States generally accepted accounting principles.

“ Governmental Authority ” shall mean any supranational, national, state, municipal, local or foreign government, any court, tribunal, arbitrator, administrative agency, commission or other governmental official, authority or instrumentality, in each case whether domestic or foreign, any stock exchange or similar self-regulatory organization or any quasi-governmental body exercising any regulatory, Taxing or other governmental or quasi-governmental authority.

“ Group ” means the definition ascribed to such term under Section 13(d) of the Exchange Act, the rules and regulations thereunder and related case law.

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“ IAS ” means International Accounting Standards.

“ Immediate Family Member ” has the meaning ascribed to such term under Item 404(a) of Regulation S-K promulgated under the Securities Act and Exchange Act.

“ knowledge ” means, (i) with respect to the Company, the knowledge of any of Garry W. Rogerson, A.W. Homan, G. Edward McClammy, Martin O’Donoghue, Sergio Piras, Sean M. Wirtjes and/or Nancy E. Egan with respect to any fact, circumstance, event or other matter in question, and (ii) with respect to Acquiror, the knowledge of any of William Sullivan, Adrian Dillon, Craig Nordlund or Marie Huber with respect to any fact, circumstance, event or other matter in question.

“ Liabilities ” means debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, determined or determinable, known or unknown, including those arising under any law, action or governmental order and those arising under any Contract.

“ Material Adverse Change ” and “ Material Adverse Effect ” when used in connection with an entity means any change, event, circumstance, condition or effect (each, an “ Effect ”), whether or not foreseeable (except to the extent such Effect is reasonably foreseeable based on a disclosure made in the Company Disclosure Letter as reasonably apparent from such disclosure) and regardless of whether or not such Effect is inconsistent with the representations or warranties made by such entity in this Agreement, that is or is reasonably likely to be, individually or in the aggregate, materially adverse to the financial condition, assets (including intangible assets), liabilities, business, operations or results of operations of such entity and its Subsidiaries, taken as a whole, except to the extent that any such Effect is proximately caused by: (a) changes in general economic conditions, changes in securities or other financial markets or changes affecting the industry generally in which such entity operates ( provided that such changes do not affect such entity disproportionately as compared to companies operating in the same industry in which such entity operates); (b) changes in the trading volume or trading prices of such entity’s capital stock in and of themselves ( provided that such exclusion shall not apply to any underlying Effect that may have caused such change in trading prices or volumes, unless such underlying Effect would otherwise be excluded from this definition); (c) acts of war or terrorism ( provided that such acts do not affect such entity disproportionately as compared to companies operating in the same industry in which such entity operates); (d) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world; (e) changes in Applicable Law or GAAP after the Agreement Date ( provided that such changes do not affect such entity disproportionately as compared to companies

operating in the same industry in which such entity operates); (f) any failure to meet published analysts’ estimates or expectations, or internal budgets, plans or forecasts, as to revenue, earnings or other financial performance after the Agreement Date in and of themselves ( provided that such exclusion shall not apply to any underlying Effect that may have caused such failure, unless such underlying Effect would otherwise be excluded from this definition); (g) the announcement or the execution of this Agreement or the pendency or consummation of the Merger, including the loss of employees, customers or suppliers; (h) any actions taken by such entity which Acquiror has approved, consented to or requested, in each case in writing, or the taking by such entity of any action specifically required by the express terms of this Agreement; (i) any Legal Proceeding brought by any of the current or former stockholders of such entity (on their own behalf or on behalf of such entity) against such entity relating specifically to the Merger; or (j) any strikes, lockouts, slowdowns or work stoppages against such entity.

“ Merger Sub Common Stock ” means the Common Stock, $0.01 par value per share, of Merger Sub.

“ NASDAQ ” means the Nasdaq Global Select Stock Market.

“ NYSE ” means the New York Stock Exchange.

“ Permitted Encumbrances ” means: (a) statutory liens for Taxes that are not yet due and payable or which are being contested in good faith and by appropriate Legal Proceedings; (b) statutory liens to secure obligations to landlords, lessors or renters under leases or rental agreements; (c) deposits or pledges made in connection with, or to secure payment of, workers’ compensation, unemployment insurance or similar programs mandated by Applicable Law; (d) statutory liens in favor of carriers, warehousemen, mechanics and materialmen, to secure claims for labor, materials or supplies and other like liens; (e) Encumbrances imposed on the underlying fee interest in leased property; (f) mechanics, carriers’, workmen’s, warehouseman’s, repairmen’s, materialmen’s or other Encumbrances for amounts that are not yet due and payable or that are being contested in good faith and by appropriate Legal Proceedings; (g) non-exclusive object code licenses for software, or non-exclusive licenses to intellectual property of the Company with respect to components incorporated in products sold by the Company, in each case, in the ordinary course of business; (h) defects, imperfections or irregularities in title, easements, covenants and rights of way (unrecorded and of record) and other similar Encumbrances (or other encumbrances of any type), and zoning, building and other similar codes or restrictions, in each case that do not adversely affect in any material respect the current use or operation of the applicable property owned, leased, used or held for use by the Company or any Company Subsidiaries; and (i) Encumbrances that do not materially interfere with the use or operation of the property subject thereto.

“ Person ” means any natural person, corporation, company, limited liability company, general partnership, limited liability partnership, trust, estate, proprietorship, joint venture, association, organization, entity or Governmental Authority.

“ Proxy Statement ” means the proxy statement to be filed by the Company with the SEC in connection with the solicitation of proxies from Company Stockholders for the Company Stockholder Approval (as defined in Section 3.3(a) ), as amended or supplemented.

“ Sarbanes Act ” means the Sarbanes-Oxley Act of 2002.

“ SEC ” means the Securities and Exchange Commission.

“ Securities Act ” means the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder.

“ Subsidiary ” means any corporation, association, business entity, partnership, limited liability company or other Person of which the Company or Acquiror, as the case may be, either alone or together with one or more Subsidiaries or by one or more other Subsidiaries (a) directly or indirectly owns or controls securities or other interests representing more than 50% of the voting power of such Person, or (b) is entitled, by Contract or otherwise, to elect, appoint or designate directors constituting a majority of the members of such Person’s board of directors or other governing body.

“ Superior Proposal ” means, with respect to the Company, an unsolicited, bona fide written Alternative Transaction Proposal, which the Company Board has in good faith determined (after consultation with its outside legal counsel and its financial advisor), taking into account all legal, financial, regulatory, timing and other aspects of the proposal and the identity of the Person making the proposal, (a) is more favorable, from a financial point of view, to the Company Stockholders (in their capacities as stockholders) than the terms of this Agreement (after giving effect to any adjustments to the terms of this Agreement proposed by Acquiror in response to such Alternative Transaction Proposal), (b) provides for consideration consisting exclusively of cash and/or publicly-traded equity securities and financing, to the extent required by the Person making the proposal, that is fully committed and non-contingent, and (c) is reasonably likely to receive all required governmental approvals within a reasonable timeframe and is reasonably likely to be consummated on the terms proposed; provided that, for purposes of this definition of “Superior Proposal” each reference to “15%” or “85%” in the definition of “Alternative Transaction” shall be deemed to be a reference to “50%”, clause (b) of the definition of “Alternative Transaction” shall be limited to any sale of all or substantially all of the assets of the Company and the Company Subsidiaries, and clauses (c) and (d) of the definition of “Alternative Transaction” shall be deleted.

“ Tax ” (and, with correlative meaning, “ Taxes ” and “ Taxable ) shall mean (a) any income, alternative or add-on minimum tax, gross income, estimated, gross receipts, sales, use, ad valorem, value added, transfer, franchise, capital stock, profits, license, registration, withholding, payroll, social security (or equivalent), employment, unemployment, disability, excise, severance, stamp, occupation, premium, property (real, tangible or intangible), environmental or windfall profit tax, custom duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount (whether disputed or not) imposed by any Governmental Authority responsible for the imposition of any such tax (domestic or foreign) (each, a “ Tax Authority ”), (b) any liability for the payment of any

amounts of the type described in clause (a) of this sentence as a result of being a member of an affiliated, consolidated, combined, unitary or aggregate group for any Taxable period, and (c) any liability for the payment of any amounts of the type described in clause (a) or (b) of this sentence as a result of being a transferee of or successor to any Person or as a result of any express or implied obligation to assume such Taxes or to indemnify any other Person.

“ Tax Return ” shall mean any return, statement, report or form (including estimated Tax returns and reports, withholding Tax returns and reports, any schedule or attachment, and information returns and reports) required to be filed with respect to Taxes.

“ Transaction Expenses ” means all costs and expenses incurred in connection with the Merger and this Agreement and the transactions contemplated hereby, or any discussions with respect to any similar transaction with any other Person (including any fees and expenses of legal counsel, financial advisors, investment bankers and accountants).

Other capitalized terms defined elsewhere in this Agreement and not defined in this Article 1 shall have the meanings assigned to such terms in this Agreement.

ARTICLE 2

T HE M ERGER

2.1 Conversion of Shares .

(a) Conversion of Merger Sub Common Stock . Subject to the terms and conditions of this Agreement, at the Effective Time, each share of Merger Sub Common Stock that is issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without the need for any further action on the part of the holder thereof, be converted into one validly issued, fully paid and nonassessable share of Common Stock, $0.01 par value per share, of the Surviving Corporation, and the shares of the Surviving Corporation into which the shares of Merger Sub Common Stock are so converted shall be the only shares of Company Common Stock that are issued and outstanding immediately after the Effective Time.

(b) Conversion of Company Securities .

(i) Company Common Stock . Subject to the terms and conditions of this Agreement, at the Effective Time, each share of Company Common Stock that is issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares and shares to be canceled pursuant to Section 2.1(c) ) 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 into and represent the right to receive an amount of cash, without interest, equal to the Cash Amount Per Share. The amount of cash each Company Stockholder is entitled to receive for the shares of Company Common Stock held by such Company Stockholder shall be rounded to the nearest cent and computed after aggregating cash amounts for all shares of Company Common Stock held by such Company Stockholder.

(ii) Company Stock-Based Awards . Subject to the terms and conditions of this Agreement, at the Effective Time, each Company Stock-Based Award (whether vested or unvested), shall be cancelled and converted into a right to receive an amount in cash, without interest, equal to the product of (A) the number of shares of Company Common Stock subject to the Company Stock-Based Award, multiplied by (B) the Cash Amount Per Share; provided , however , that the Surviving Corporation and Acquiror shall be entitled to deduct and withhold from such payment made to the holder of a Company Stock-Based Award the amount of withholding for Taxes required to be deducted and withheld as a result of the transactions contemplated by this Section 2.1(b)(ii) and provided , further , that, notwithstanding the foregoing, the amount payable pursuant to this Section 2.1(b)(ii), as calculated pursuant to this sentence, shall be reduced by the amount, if any, that the holder of the Company Stock-Based Award is obligated to pay to the Company with respect to such Company-Stock Based Award pursuant to the terms of the applicable award agreement. With respect to any outstanding performance-based Company Stock-Based Award, the number of shares of Company Common Stock subject to such Company Stock-Based Award for purposes of (A) above shall be deemed to be one hundred percent (100%) of the target number of shares of Company Common Stock subject to such Company Stock-Based Award (as set forth in the applicable award agreement). The amount of cash each holder of a Company Stock-Based Award is entitled to receive shall be rounded to the nearest cent and computed after aggregating cash amounts for all Company Stock-Based Award held by such Person and shall be in full satisfaction and discharge of all rights of the holder held in such Company Stock-Based Award. For the avoidance of doubt, any Person entitled to a cash payment pursuant to this Section 2.1(b)(ii) in exchange for shares of Company Common Stock subject to a Company Stock-Based Award shall not be entitled to any payment pursuant to Section 2.1(b)(i) with respect to such shares of Company Stock.

(iii) Company Options with an Exercise Price Less than the Cash Amount Per Share . Subject to the terms and conditions of this Agreement, at the Effective Time, each Company Option (whether vested or unvested) with an exercise price that is less than the Cash Amount Per Share that is issued and outstanding immediately prior to the Effective Time, shall, by virtue of the Merger and without the need for any further action on the part of the holder thereof, be cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (A) the number of shares of Company Common Stock subject to such Company Option with an exercise price that is less than the Cash Amount Per Share, multiplied by (B) the Cash Amount Per Share, less the exercise price per share attributable to such Company Option; provided , however , that the Surviving Corporation and Acquiror shall be entitled to deduct and withhold from such payment made to the holder of a Company Option the amount of withholding for Taxes required to be deducted and withheld as a result of the transactions contemplated by this Section 2.1(b)(iii) . The amount of cash each holder of a Company Option with an exercise price that is less than the Cash Amount Per Share is entitled to receive for such Company Option shall be rounded to the nearest cent and computed after aggregating cash amounts for all Company Options held by such Person and shall be in full satisfaction and discharge of all rights of the holder held in such Company Option.

(iv) Cancellation of Company Options with an Exercise Price equal to or in excess of the Cash Amount Per Share . Subject to the terms and conditions of this Agreement, at the Effective Time, each Company Option (whether vested or unvested) with an exercise price equal to or

in excess of the Cash Amount Per Share, in each case that is issued and outstanding immediately prior to the Effective Time, by virtue of the Merger and without the need for any further action on the part of the holder thereof, shall be cancelled and extinguished without any conversion thereof or payment therefor and in full satisfaction and discharge of all rights of the holder held in such Company Option. Acquiror shall not substitute any equivalent option or restricted stock unit for any such Company Option cancelled pursuant to this Section 2.1(b)(iv) .

(v) Company Director Stock Units . Subject to the terms and conditions of this Agreement, at the Effective Time, the directors of the Company holding all of the outstanding Director Stock Unit Awards will cease to be members of the Company Board and, therefore, each Director Stock Unit Award outstanding as of the Effective Time shall become fully vested in accordance with its terms at the Effective Time. At the Effective Time, each Company Director Stock Unit outstanding as of the Effective Time shall be converted automatically into the vested right to receive an amount in cash equal to the product of (A) the Cash Amount Per Share, multiplied by (B) the outstanding number of shares of Company Common Stock subject to the Director Stock Unit Award.

(vi) Necessary Actions . Prior to the Effective Time, the Company shall take all reasonable actions under the terms of the Company Option Plan for the implementation of the provisions of this Section 2.1(b) .

(c) Cancellation of Company-Owned Stock . Notwithstanding Section 2.1(b) , each share of Company Capital Stock held by the Company or any Company Subsidiaries immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof.

(d) Adjustments . In the event of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into capital stock), reorganization, reclassification, combination, recapitalization or other like change with respect to the Company Capital Stock occurring after the Agreement Date and prior to the Effective Time, all references in this Agreement to specified numbers of shares of any class or series affected thereby, and all calculations provided for that are based upon numbers of shares of any class or series (or trading prices therefor) affected thereby, shall be equitably adjusted to the extent necessary to provide the parties the same economic effect as contemplated by this Agreement prior to such stock split, reverse stock split, stock dividend, reorganization, reclassification, combination, recapitalization or other like change.

(e) Payment to Holders of Company Options, Company Director Stock Units and Company Stock-Based Awards . Parent shall cause the Surviving Corporation to pay the amounts payable pursuant to Sections 2.1(b)(ii), (iii) and (v) , subject to such deductions and withholding as may be required pursuant to the provisions of Sections 2.1 and 2.3(b) , and except to the extent required by Applicable Laws, (A) in exchange for Company Options with an exercise price less than the Cash Amount Per Share and in exchange for Company Stock-Based Awards, to the holders thereof through the Surviving Corporation’s payroll process as soon as practicable following the Effective Time, and (B) in exchange for Company Director Stock Units, to the holders thereof as soon as practicable following the vesting date thereof, but in no event more than 60 days following such vesting date.

(f) Setoff . If, as of the Effective Time, there is any outstanding indebtedness of any holder of Company Capital Stock owed to the Company with respect to the purchase by such holder of such Company Capital Stock from the Company, the total amount of such indebtedness (including principal, accrued interest and any other amounts owed to the Company with respect to such purchase) shall be deducted by Parent from the aggregate amount otherwise payable in the Merger to such Company Stockholder for his, her or its Company Securities pursuant to this Section 2.1 .

(g) Dissenting Shares . Dissenting Shares shall not be converted into the right to receive the Cash Amount Per Share, and the holders thereof shall be entitled to only such rights as are granted by Section 262 of the Delaware Law; provided , however , that if any such Company Stockholder shall fail to perfect or shall effectively waive, withdraw or lose such stockholder’s rights under Section 262 of the Delaware Law, such stockholder’s shares of Company Common Stock in respect of which such stockholder would otherwise be entitled to receive fair value under Section 262 of the Delaware Law shall thereupon be deemed to have been converted, at the Effective Time, into the right to receive the Cash Amount Per Share. From and after the Effective Time, a holder of Dissenting Shares shall not be entitled to exercise any of the voting rights or other rights of an equity owner of the Surviving Corporation or of a stockholder of Acquiror.

2.2 Effects of the Merger . At and upon the Effective Time:

(a) the separate existence of Merger Sub shall cease and Merger Sub shall be merged with and into the Company, and the Company shall be the surviving corporation of the Merger pursuant to the terms of this Agreement and the Certificate of Merger;

(b) subject to the provisions of Section 6.5 , 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 as provided by Delaware Law;

(c) subject to the provisions of Section 6.5 , the Bylaws of the Surviving Corporation shall be amended in their entirety to read as the Bylaws of Merger Sub, until thereafter amended as provided by Delaware Law;

(d) the officers of Merger Sub immediately prior to the Effective Time shall be appointed as the officers of the Surviving Corporation immediately after the Effective Time until their respective successors are duly appointed;

(e) the members of the Board of Directors of Merger Sub immediately prior to the Effective Time shall be appointed as the members of the Board of Directors of the Surviving Corporation immediately after the Effective Time until their respective successors are duly elected or appointed and qualified; and

(f) the Merger shall, from and after the Effective Time, have all of the effects provided by Delaware Law.

2.3 Tax Consequences and Withholding .

(a) The parties intend that the Merger shall be treated as a Taxable purchase of securities of the Company pursuant to the Code. However, Acquiror makes no representations or warranties to the Company or to any Company Securityholder regarding (i) the Tax treatment of the Merger or (ii) any of the Tax consequences to the Company or any Company Securityholder of this Agreement, the Merger or any of the other transactions or agreements contemplated hereby.

(b) Acquiror or Acquiror’s agent shall be entitled to deduct and withhold from the amounts payable pursuant to this Agreement to any Company Securityholder, any amounts required to be deducted and withheld under the Code, or any other provision of Applicable Law, with respect to the making of such payment. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Company Securityholder in respect of whom such deduction and withholding was made.

2.4 Further Assurances . At and after the Effective Time, the officers and directors of Acquiror and the Surviving Corporation will be authorized to execute and deliver, in the name and on behalf of the Company and Merger Sub, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company and Merger Sub, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

ARTICLE 3

R EPRESENTATIONS AND W ARRANTIES OF THE C OMPANY

Subject to the exceptions set forth in a numbered or lettered section of the disclosure letter of the Company addressed to Acquiror, dated as of the Agreement Date and delivered to Acquiror concurrently with the parties’ execution of this Agreement (the “ Company Disclosure Letter ”) referencing a representation or warranty (or covenant, as applicable) herein (each of which exceptions, in order to be effective, shall indicate the section and, if applicable, the subsection of this Agreement to which it relates (unless and to the extent the applicability to other representations and warranties (or covenants, as applicable) is reasonably apparent from the actual text of the disclosed exception), , the Company represents and warrants to Acquiror as follows:

3.1 Organization and Good Standing . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has the corporate power and authority to own, operate and lease its properties and to carry on the Company Business. The Company is duly qualified or licensed to do business, and is in good standing (to the extent that such concept is applicable), in each jurisdiction where 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 failure to be so qualified and in good standing, individually or in the

aggregate with any such other failures, would not reasonably be expected to have a Material Adverse Effect on the Company. The Company has delivered or made available to Acquiror or its counsel true and complete copies of the Company Charter Documents. The Company is not in violation of the Company Charter Documents.

3.2 Company Subsidiaries .

(a) Organization and Good Standing . Schedule 3.2(a) of the Company Disclosure Letter sets forth a true, correct and complete list of all Company Subsidiaries. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, (i) each Company Subsidiary is a corporation duly organized, validly existing and in good standing (to the extent that such concept is applicable) under the laws of its jurisdiction of organization, (ii) each Company Subsidiary has the corporate power and authority to own, operate and lease its properties and to carry on its business, (iii) each Company Subsidiary is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, and (iv) each Company Subsidiary is not in violation of its Certificate of Incorporation or Bylaws (or other comparable charter documents), each as amended to date.

(b) Ownership . The Company is the owner of all of the issued and outstanding shares of capital stock of each Company Subsidiary and all such shares are duly authorized, validly issued, fully paid and nonassessable. All of the issued and outstanding shares of capital stock of each Company Subsidiary are owned by the Company free and clear of all Encumbrances (other than Permitted Encumbrances) and are not subject to any preemptive right or right of first refusal created by statute, the Certificate of Incorporation and Bylaws (or other comparable charter documents), as applicable, of such Company Subsidiary or any agreement to which such Company Subsidiary is a party or by which it is bound. There are no stock appreciation rights, options, warrants, calls, rights, legally binding commitments, conversion privileges or preemptive or other rights or agreements outstanding to purchase or otherwise acquire any shares of capital stock of a Company Subsidiary or any securities or debt convertible into or exchangeable for capital stock of a Company Subsidiary or obligating the Company or any Company Subsidiary to grant, extend or enter into any such option, warrant, call, right, legally binding commitment, conversion privilege or preemptive or other right or agreement. Other than the Company Subsidiaries set forth in Schedule 3.2(a) of the Company Disclosure Letter, the Company does not have any Company Subsidiary or any equity or ownership interest (or any interest convertible or exchangeable or exercisable for, any equity or ownership interest), whether direct or indirect, in any Person. The Company is not contractually obligated to make nor is it contractually bound by any agreement or obligation to make any investment in or capital contribution in or on behalf of any other Person.

3.3 Power, Authorization and Validity .

(a) Power and Authority . The Company has all requisite corporate power and authority to enter into, execute, deliver and perform its obligations under this Agreement and, subject to adoption of this Agreement by holders of a majority of the outstanding shares of

Company Common Stock (the “ Company Stockholder Approval ”), to consummate the Merger and other transactions contemplated hereby. The Company Board, by resolutions duly adopted (and not thereafter modified or rescinded) by the unanimous vote of the full Company Board, has (i) determined that this Agreement and the terms and conditions of the Merger and this Agreement are fair to, advisable and in the best interests of the Company and the Company Stockholders, (ii) approved and adopted this Agreement and the Merger, and (iii) directed that the adoption of this Agreement be submitted to the Company Stockholders for consideration and recommended that all of the Company Stockholders adopt this Agreement. The Company Stockholder Approval is the only vote of the holders of any class or series of Company Capital Stock necessary to adopt this Agreement and consummate the Merger and the other transactions contemplated hereby under the Company Charter Documents and Applicable Law. The Company and the Company Subsidiaries are not party to any “stockholder rights plan” or similar anti-takeover agreement or plan that is currently in effect.

(b) No Consents . No consent, approval, order, authorization, release or waiver of, or registration, declaration or filing with, any Governmental Authority is necessary or required to be made or obtained by the Company to enable the Company to lawfully execute and deliver, enter into, and perform its obligations under this Agreement or to consummate the Merger, except for (i) the filing of the Certificate of Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which Company is qualified to do business, (ii) the Company Stockholder Approval, (iii) such filings and notifications as may be required to be made by the Company in connection with the Merger under the HSR Act and other applicable Antitrust Laws (as defined in Section 5.6(a) ) and the expiration or early termination of applicable waiting periods under the HSR Act and such Antitrust Laws, (iv) the filing with the SEC of the Proxy Statement and such reports and filings under the Exchange Act and the rules and regulations thereunder as may be required in connection with this Agreement and the transactions contemplated hereby, (v) such other filings and notifications as may be required to be made by the Company under federal, state or foreign securities laws or the rules and regulations of NASDAQ, and (vi) such other consents, approvals, orders, authorizations, releases, waivers, registrations, declarations or filings that if not made or obtained (A) would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, or (B) would not be material to the Company’s ability to consummate the Merger and the other transactions contemplated by this Agreement or to perform their respective obligations under this Agreement.

(c) Enforceability . This Agreement has been duly executed and delivered by the Company, and assuming the due authorization, execution and delivery of this Agreement by Acquiror and Merger Sub, constitutes the valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, subject to the effect of (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to rights of creditors generally and (ii) rules of law and equity governing specific performance, injunctive relief and other equitable remedies.

(d) Takeover Laws . Assuming the truth of the representations and warranties contained in Section 4.5 , the adoption of this Agreement and the approval of the Merger and the

transactions contemplated hereby by the Company Board referred to in Section 3.3(a) constitute all of the approvals that are necessary to render inapplicable to this Agreement, the Merger, and the transactions contemplated hereby the provisions of Section 203 of Delaware Law and represent the only actions necessary to ensure that Section 203 of Delaware Law does not and will not apply to the execution, delivery, or performance of this Agreement or the consummation of the Merger or other transactions contemplated hereby. No other state takeover or other similar statute or regulation is applicable to this Agreement or the Merger.

3.4 Capital Structure of the Company .

(a) The authorized capital stock of the Company consists solely of 99,000,000 shares of Company Common Stock and 1,000,000 shares of Company Preferred Stock. As of the close of business on July 23, 2009, a total of 28,863,750 shares of Company Common Stock are issued and outstanding and no shares of Company Preferred Stock are issued and outstanding. The Company has reserved (i) an aggregate of 14,712,020 shares of Company Common Stock for issuance pursuant to the Company Option Plan (including shares subject to outstanding Company Options, Company Director Stock Units and Company Stock-Based Awards) and (ii) an aggregate of 1,200,000 shares of Company Common Stock for issuance pursuant to the Company ESPP. As of the close of business on July 23, 2009, (i) a total of 1,895,520 shares of Company Common Stock are subject to outstanding Company Options, (ii) a total of 18,306 shares of Company Common Stock are subject to outstanding Company Director Stock Units, (iii) a total of 256,391 shares have been issued or are subject to issuance pursuant Company Stock-Based Awards that are issued and outstanding, and, between such date and the Agreement Date, the Company has not granted or issued, or committed to grant or issue, any Company Options, Company Director Stock Units, Company Stock-Based Awards or any other securities. As of the close of business on July 23, 2009, (A) a total of 3,717,861 shares of Company Common Stock are reserved for future grant and issuance under the Company Option Plan (excluding shares subject to outstanding Company Options), and (B) a total of 45,947 shares of Company Common Stock are reserved for future grant and issuance under the Company ESPP. Except for the issued and outstanding Company Options, Company Director Stock Units and Company Stock-Based Awards described in the previous sentence, as of the Agreement Date, there are no stock appreciation rights, options, warrants, calls, rights, commitments, conversion privileges or preemptive or other rights or Contracts outstanding to purchase or otherwise acquire any shares of Company Capital Stock or Company Voting Debt or any securities or debt convertible into or exchangeable for Company Capital Stock or Company Voting Debt or obligating the Company to grant, extend or enter into any such option, warrant, call, right, commitment, conversion privilege or preemptive or other right or Contract, and between such date and the Agreement Date, the Company has not granted or issued any of the foregoing securities or rights. All issued and outstanding shares of Company Common Stock, including all Company Stock-Based Awards, have been duly authorized and validly issued, are fully paid and nonassessable, were not issued in violation of and are not subject to any right of rescission, right of first refusal or preemptive right, and have been offered, issued, sold and delivered by the Company in compliance in all material respects with Applicable Law and all requirements set forth in applicable Contracts. There is no Liability for dividends accrued and unpaid by the Company. As of the Agreement Date, there are no shares of Company Common Stock held in treasury by the Company or any Company Subsidiaries.

(b) Schedule 3.4(b) of the Company Disclosure Letter sets forth as of the date set forth therein the total number of vested Company Options and the total number of unvested Company Options and exercise price of such Company Options and, between such date and the Agreement Date, the Company has not granted or issued, or committed to grant or issue, any Company Options. All issued and outstanding Company Options, Company Stock-Based Awards and Company Director Stock Units were issued by the Company in compliance with Applicable Law except as would not have a Material Adverse Effect on the Company and all requirements set forth in the Company Option Plan and the Contracts entered into thereunder in connection with the grant or issuance of such Company Options, Company Stock-Based Awards and Company Director Stock Units. Neither the Company Option Plan, nor the standard form agreements under the Company Option Plan, have been amended, modified or supplemented since the most recent filing by the Company thereof with the SEC, and there are no agreements, understandings or commitments to amend, modify or supplement such plans or agreements.

(c) Company Debt . No bonds, debentures, notes or other Debt of the Company or any Company Subsidiaries (i) having the right to vote on any matters on which stockholders may vote (or which is convertible into, or exchangeable for, securities having such right) or (ii) the value of which is based upon or derived from capital or voting stock of the Company (collectively, “ Company Voting Debt ”), is issued or outstanding as of the Agreement Date. Schedule 3.4(c) to the Company Disclosure Letter accurately lists all outstanding Debt of the Company and the Company Subsidiaries as of the Agreement Date. All Debt may be prepaid at the Closing without penalty under the terms of the agreements governing such Debt.

(d) No Other Rights . The Company Charter Documents do not provide, and the Company is not a party to or otherwise bound by any Contract providing, registration rights, rights of first refusal, preemptive rights, co-sale rights or other similar rights or other restrictions applicable to any securities of the Company or any Company Subsidiary issued and outstanding as of the Agreement Date or that may be subsequently issued. The Company is not a party to any Contract regarding the voting of any outstanding securities of the Company (other than the Voting Agreements). The Company has no obligation to repurchase, redeem or acquire any shares of capital stock of the Company, of any Company Subsidiary or any other entity.

3.5 No Conflict . Neither the execution and delivery of this Agreement by the Company, nor the consummation of the Merger or the other transactions contemplated hereby: (a) conflicts with, or (with or without notice or lapse of time, or both) results in a termination, breach or violation of, or constitutes a default under, or give rise to a right of termination, cancellation, modification or acceleration of any obligation or modification, impairment or loss of any benefit under, or require any consent, approval or waiver from any Person pursuant to (i) any provision of the Company Charter Documents or other comparable charter documents of any Company Subsidiary, each as currently in effect, (ii) subject to compliance with the requirements described in subclauses (i)-(v) of Section 3.3(b) , any Applicable Law applicable to the Company, any Company Subsidiary or any of

their respective assets or properties, or (iii) any Company Material Contract (as defined in Section 3.12 ) or any material Contract providing for the license to (or for the benefit or use of) the Company or any Company Subsidiary of any Third Party Intellectual Property which is in any manner incorporated in any Company Product, or would be infringed by the manufacture, sale, offering for sale, use, importation or distribution of any Company Product in the absence of such Contract, or any Contract pursuant to which the Company or any Company Subsidiary grants any right or license to another Person under any material Company IP Right (except in the cases of subclause (ii) and (iii), where such conflicts, terminations, breaches, violations or defaults, rights of termination or cancellation, acceleration or modification, impairment, loss, or failures to obtain such consents, approvals or waivers, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company); or (b) will result in the creation of any Encumbrance on any of the properties or assets of the Company or the Company Subsidiaries that would be material to the Company and the Company Subsidiaries, taken as a whole.

3.6 SEC Filings .

(a) SEC Reports . The Company has filed with the SEC all registration statements, prospectuses, reports, forms, statements, schedules, certifications and other documents (including exhibits and all other items incorporated by reference) required to be filed or furnished by the Company under Applicable Law since September 29, 2006 (all such required registration statements, prospectuses, reports, forms, statements, schedules, certifications and other documents, including those that the Company may file subsequent to the Agreement Date and through the Effective Time, are referred to herein as the “ Company SEC Documents ”), and all such Company SEC Documents in the form filed with the SEC are available on the SEC’s EDGAR website. As of their respective filing dates (or, if amended or superseded by a filing prior to the Agreement Date, then on the date of such filing), the Company SEC Documents (i) were prepared in accordance and complied in all material respects with the requirements of the Securities Act, the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Documents and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. None of the Company Subsidiaries is required to file any forms, reports or other documents with the SEC.

(b) Financial Statements . Each of the consolidated financial statements (including, in each case, any related notes thereto) contained in the Company SEC Documents (the “ Company Financial Statements ”), including each Company SEC Document filed after the Agreement Date until the Closing, (i) complied, as of their respective dates of filing with the SEC, as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (ii) was prepared in accordance with GAAP (except in the case of unaudited interim financial statements, as may be permitted by the SEC on Form 10-Q or Form 8-K) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto), and (iii) fairly presented in all material respects the consolidated financial position of Company and the Company Subsidiaries as at the respective dates thereof and the consolidated results of Company’s and the Company Subsidiaries’ operations and

cash flows for the periods indicated (except that the unaudited interim financial statements were subject to normal and recurring year-end and quarter-end adjustments). Except as reflected in the Company Balance Sheet (or described in the notes thereto), neither the Company nor any of the Company Subsidiaries has any Liabilities of any nature that would be required by GAAP to be reflected on a consolidated balance sheet of the Company and the Company Subsidiaries, or described in the notes thereto, except (i) Liabilities incurred since the Balance Sheet Date in the ordinary course of business consistent with past practices, (ii) Liabilities reserved against in the Company Balance Sheet (but only to the extent of such reserves), (iii) Liabilities for Transaction Expenses, and (iv) Liabilities that would not reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole.

(c) Sarbanes Act . The Company is in compliance in all material respects with the applicable provisions of the Sarbanes Act, and the related rules and regulations promulgated under such act or the Exchange Act, in each case, as currently in effect. Since September 29, 2006, to the knowledge of the Company, no party has submitted any complaint to the Audit Committee of the Company Board pursuant to the procedures established in accordance with Section 10A(m)(4) of the Exchange Act. To the Company’s knowledge, there are no material violations of the Company’s code of conduct, adopted pursuant to NASDAQ Rule 4350(n). No attorney representing the Company or any of the Company Subsidiaries has reported any material violation to the Company’s chief legal officer, chief executive officer, or any committee of the Company Board, including any qualified legal compliance committee, as contemplated by the rules set forth in 17 CFR Part 205.

(d) Controls . The Company has established and maintains a system of internal accounting controls reasonably sufficient to provide reasonable assurances that (i) receipts and expenditures of the Company and the Company Subsidiaries are being made only in accordance with authorizations of management and the Company Board, (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of the Company and the Company Subsidiaries. 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 differences. To the Company’s knowledge, there are no “significant deficiencies” or “material weaknesses” (each as defined by Rule 1-02(a)(4) of Regulation S-X promulgated by the SEC) in the design or operation of the Company’s internal controls and procedures which would reasonably be expected to materially and adversely affect the Company’s ability to record, process, summarize and report financial data. To the Company’s knowledge, there is no fraud, whether or not material, that involves management or other current or former employees of the Company or any of the Company Subsidiaries who have a role in the Company’s internal controls over financial reporting. The Company has established and maintains “disclosure controls and procedures” (as defined in Rule 13a-15 promulgated under the Exchange Act) designed to ensure that information required to be disclosed by the Company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to the Company’s principal executive officer and principal financial officer, or

persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the “principal executive officer” and the “principal financial officer” of the Company required by Section 302 of the Sarbanes Act with respect to such reports. Since September 29, 2006, each of the principal executive officer of the Company and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company, as applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes Act and the rules and regulations promulgated thereunder with respect to the Company SEC Reports and the statements contained in such certifications were true and accurate at the time of filing or submission thereof. The Company has established and maintains “internal control over financial reporting” (as defined in Rule 13a-15 promulgated under the Exchange Act).

(e) Off-Balance Sheet Arrangements . Neither the Company nor any Company Subsidiary is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar Contract or arrangement (including without limitation any Contract or arrangement relating to any transaction or relationship between or among the Company and any of the Company Subsidiaries, on the one hand, and any unconsolidated Affiliate on the other hand), including without limitation any “off-balance sheet arrangement” (as defined in Item 303(a) of Regulation S-K promulgated by the SEC)), where the purpose or intended effect of such contract or arrangement is to avoid disclosure of any material transaction involving, or material liabilities of, the Company or any of the Company Subsidiaries in the Company’s or such Company Subsidiary’s published financial statements or other Company SEC Documents.

(f) Amendments . The Company has heretofore delivered to Acquiror a complete and correct copy of any amendments or modifications, which have not yet been filed with the SEC but which are required to be filed, to agreements, documents or other instruments which previously had been filed by the Company with the SEC pursuant to the Securities Act or the Exchange Act. No “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC) filed as an exhibit to the Company SEC Documents has been amended or modified, except for amendments or modifications so furnished or which have been filed as an exhibit to a subsequently dated Company SEC Document. The Company has heretofore delivered to Acquiror a complete and correct copy of any comment letters or similar correspondence received by the Company from the SEC between September 29, 2006 and the Agreement Date. The SEC has not provided comments to the Company in connection with any Company SEC Documents that to the Company’s knowledge remain unresolved and are material. To the knowledge of the Company, no investigation by the SEC with respect to the Company or any of the Company Subsidiaries is pending or threatened.

(g) Proxy Statement . The information supplied by the Company for inclusion in the Proxy Statement shall not at the time the Proxy Statement is filed with the SEC contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. The information supplied by the Company for inclusion or incorporation by reference in the Proxy Statement shall not, on the date the Proxy Statement is mailed to Company Stockholders and at the time of the meeting of Company

Stockholders to consider the Company Stockholder Approval (the “ Company Stockholders’ Meeting ”), contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Company Stockholders’ Meeting which has become false or misleading. The Proxy Statement will, when filed, comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any information supplied by Acquiror, Merger Sub or any of their respective Representatives that is contained in the Proxy Statement.

3.7 Litigation . (a) There is no action, suit, arbitration, mediation, proceeding, claim or investigation (each, a “ Legal Proceeding ”) pending against the Company or any Company Subsidiary (or to the knowledge of the Company, against any officer, director, employee or agent of the Company or any Company Subsidiary in their capacity as such) before any Governmental Authority, arbitrator or independent mediator, nor, to the knowledge of the Company, has any such Legal Proceeding been threatened and (b) there is no judgment, decree, injunction, rule or order of any Governmental Authority, arbitrator or independent mediator outstanding against the Company or any Company Subsidiary, or to the knowledge of the Company, against any officer, director, employee or agent of the Company or any Company Subsidiary in their capacity as such or relating to their employment, services or relationship with the Company or such Company Subsidiary, in either case, that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. Neither the Company nor any Company Subsidiary has any material Legal Proceeding pending against any Governmental Authority or other Person. There has not been since September 29, 2006, nor are there any currently pending, any internal investigations or inquiries being conducted by (x) the Company, (y) the Company Board (or any committee thereof) or (z) any third party at the request of the Company or the Company Board, in each case, concerning any financial, accounting, Tax, conflict of interest, illegal activity, fraudulent or deceptive conduct or other misfeasance or malfeasance issues involving the Company, any Company Subsidiary or any of their respective officers, directors or employees in their capacity as such.

3.8 Compliance with Laws .

(a) Applicable Laws . The Company and each Company Subsidiary is and has been in compliance with all Applicable Law, except for any such noncompliance that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. Since September 29, 2006, neither the Company nor any of the Company Subsidiaries has received any written notice or other written communication from any Governmental Authority asserting that the Company or any of the Company Subsidiaries has failed to comply, or is not in compliance, with Applicable Law that would reasonably be expected to result in any Liability that is material to the Company and the Company Subsidiaries, taken as a whole (which such failure to comply or non-compliance has not been fully remedied) and to the Company’s knowledge, no investigation or review of the Company or any of the Company Subsidiaries with respect to the foregoing by any Governmental Authority is pending or threatened.

(b) Governmental Permits . The Company and each Company Subsidiary holds all permits, licenses and approvals from all Governmental Authorities that are necessary and/or legally required to be held by it to conduct the Company Business and that are material to the Company and the Company Subsidiaries, taken as a whole (“ Governmental Permits ”). The Company and each Company Subsidiary is now in material compliance with all Governmental Permits, and all such Governmental Permits are valid and in full force and effect. Since September 29, 2006, neither the Company nor any Company Subsidiary has received any written notice or other written communication from any Governmental Authority alleging (i) any actual or possible violation of any Governmental Permit or any failure to comply with any term or requirement of any Governmental Permit (which such violation or failure to comply has not been fully remedied) or (ii) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any Governmental Permit, in each case, that would reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole.

(c) Product Disclosures . Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, since September 29, 2006, (i) all materials, products and services distributed or marketed by the Company and each Company Subsidiary have at all times made all disclosures to users or customers required by Applicable Law, and (ii) none of such disclosures made or contained in any such materials have been, at the time they were made, inaccurate, misleading or deceptive.

(d) Unlawful Payments . Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, neither the Company nor any Company Subsidiary nor any director or officer (or to the knowledge of the Company, any agent or employee) of the Company or any Company Subsidiary has, for or on behalf of the Company or any Company Subsidiary, (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, (iii) made any bribe, kickback or other illegal payment to assist the Company or any of the Company Subsidiaries in obtaining or retaining business for, or with, or directing business to, any Person or in securing any unlawful advantage, or (iv) made any other payment in violation of Applicable Law.

(e) Export Control Laws . Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, the Company and each Company Subsidiary has conducted its export transactions in accordance in all respects with applicable provisions of United States export control laws and regulations, including but not limited to the Export Administration Act and implementing Export Administration Regulations. Without limiting the foregoing, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company: (i) the Company and each Company

Subsidiary has obtained all export licenses and other approvals required for its exports of products, software and technologies from the United States; (ii) the Company and each Company Subsidiary is in compliance with the terms of all export licenses or other approvals applicable to the Company and each Company Subsidiary; and (iii) there are no pending or, to the knowledge of the Company, threatened Legal Proceedings against the Company or any Company Subsidiary with respect to such export licenses or other approvals.

(f) NASDAQ . The Company is in material compliance with the applicable criteria for continued listing of the Company Common Stock on NASDAQ, including all applicable corporate governance rules and regulations.

3.9 Taxes .

(a) The Company and each Company Subsidiary have properly completed and timely filed all material Tax Returns required to be filed by them and have timely paid all material Taxes due and owing (whether or not shown on any Tax Return). All such Tax Returns are complete and accurate and were prepared in compliance with all Applicable Law in all material respects.

(b) The Company and each Company Subsidiary has established an adequate accrual or reserve in accordance with GAAP for the payment of all income Taxes and all other material Taxes payable by them in respect of the periods or portions thereof prior to the Balance Sheet Date (which accrual or reserve as of the Balance Sheet Date is fully reflected on the Company Balance Sheet), and has no material Liability for income Taxes or other material Taxes for periods or portions of periods prior to the Balance Sheet Date in excess of the accruals or reserves so established. Neither the Company nor any Company Subsidiary has any Liability for unpaid Taxes accruing after the Balance Sheet Date except for (i) Taxes arising in the ordinary course of business consistent with past practice subsequent to the Balance Sheet Date and (ii) Taxes that would not in the aggregate be material to the Company and the Company Subsidiaries, taken as a whole.

(c) No deficiencies for any material Tax have been threatened, claimed or proposed in writing or assessed by any Tax Authority against the Company or any Company Subsidiary. Neither the Company nor any Company Subsidiary has received any written notification from any Tax Authority regarding any issues that (a) are currently pending before such Tax Authority regarding the Company or any Company Subsidiary, or (b) have been raised by such Tax Authority and not yet finally resolved and, in the case of either clause (a) or (b) above, that would be material to the Company and the Company Subsidiaries, taken as a whole. No Tax Return of the Company or any Company Subsidiary is under audit by any Tax Authority. All past Tax audits (if any) have been completed and fully resolved to the satisfaction of the applicable Tax Authority conducting such audit and all Taxes determined by such audit to be due from the Company or any Company Subsidiary have been paid in full to the applicable Tax Authority. No Tax liens are currently in effect against any of the assets of the Company or any Company Subsidiary other than liens that arise by operation of Applicable Law for Taxes not yet due and payable. There is not in effect any waiver by the Company or any Company Subsidiary of any statute of limitations with respect to any Taxes. Neither the Company nor any Company Subsidiary has consented to extend to a date later than the Agreement Date the period in which any Tax may be assessed or collected by any Tax Authority.

(d) The Company and each Company Subsidiary have complied (and until the Closing Date will comply) with all Applicable Law in all material respects relating to the payment and withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445 and 1446 of the Code or similar provisions under any foreign law), has, within the time and in the manner prescribed by law, withheld and paid over to the proper Tax Authority (or are properly holding for such timely payment) all amounts required to be so withheld and paid over in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party under all Applicable Law (including Federal Insurance Contribution Act, Medicare Federal Unemployment Tax Act, federal and state income Taxes and relevant state income and employment Tax withholding laws), in each such case, in all material respects, and has timely filed all withholding Tax Returns, for all periods through and including the Closing Date.

(e) Neither the Company nor any Company Subsidiary has filed any disclosures under Section 6662 or Section 6664 of the Code, or Revenue Procedure 94-69, or comparable provisions of state, local or foreign law to prevent the imposition of penalties with respect to any Tax reporting position taken on any Tax Return.

(f) Neither the Company nor any Company Subsidiary has consummated, has participated in, or is currently participating in any transaction which was or is a “Tax shelter” transaction as defined in Sections 6662 or 6111 of the Code or the Treasury Regulations promulgated thereunder. Neither the Company nor any Company Subsidiary has participated in, nor are any of them currently participating in, a “Listed Transaction” or a “Reportable Transaction” within the meaning of Section 6707A(c) of the Code or Treasury Regulation Section 1.6011-4(b), or any transaction requiring disclosure under a corresponding or similar provision of state, local, or foreign law.

(g) Neither the Company (since April 2, 1999) nor any Company Subsidiary (since the time it became such) has ever been a member of a consolidated, combined, unitary or aggregate group of which the Company was not the ultimate parent corporation.

(h) Neither the Company nor any Company Subsidiary has any Liability for the Taxes of any Person (other than the Company or any Company Subsidiary) under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or foreign law) as a transferee or successor, by contract or otherwise.

(i) The Company for itself and for each Company Subsidiary has disclosed in Schedule 3.9(i)  of the Company Disclosure Letter the amount of any deferred gain or loss arising out of any intercompany transaction within the meaning of Section 1.1502-13 of the Treasury Regulations.

(j) Neither the Company nor any Company Subsidiary will be required to include any item of income in, or exclude any item of deduction from, Taxable income for any

Taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting for a Taxable period ending on or prior to the Closing Date; (ii) “closing agreement” described in Section 7121 of the Code (or any corresponding or similar provision of state, local, or foreign Tax law); (iii) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local, or foreign Tax law); (iv) installment sale or open transaction disposition made on or prior to the Closing Date; or (v) prepaid amount received or accrued on or prior to the Closing Date.

(k) Neither the Company nor any Company Subsidiary has incurred a dual consolidated loss within the meaning of Section 1503 of the Code for which the Company has made a no foreign use election.

(l) Neither the Company nor any Company Subsidiary has been or will be required to include any adjustment in, or exclude an item of deduction from, Taxable income for any Tax period (or portion thereof) ending after the Closing Date pursuant to Section 481 or 263A of the Code or any comparable provision under state, local or foreign Tax laws as a result of transactions, events or accounting methods employed prior to the Merger.

(m) To the knowledge of the Company, no claim has ever been made in writing by a Governmental Authority in a jurisdiction where the Company or any of its Company Subsidiaries does not file Tax Returns that the Company or any of the Company Subsidiaries is or may be subject to Taxation by that jurisdiction. Neither the Company nor any of the Company Subsidiaries has a permanent establishment in any country outside of its country of incorporation.

(n) Each of the Company and each Company Subsidiary has in its possession documentation adequate to substantiate Taxes paid by it to any foreign Tax Authorities.

(o) Schedule 3.9(o) of the Company Disclosure Letter sets forth a complete and accurate list of all material agreements, rulings, settlements or other Tax documents relating to Tax incentives between Company or any Subsidiary and any Governmental Authority. The Company and its Company Subsidiaries are in compliance with the requirements for any applicable Tax holidays or incentives.

(p) Neither the Company nor any Company Subsidiary is a party to or bound by any Tax sharing, Tax indemnity, or Tax allocation agreement nor does the Company or any Company Subsidiary have any Liability or potential Liability to another party under any such agreement.

(q) Neither the Company nor any Company Subsidiary has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying for Tax-free treatment under Section 355 of the Code (a) in the two years prior to the Agreement Date or (b) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the Merger.

(r) To the knowledge of the Company, each of the Company’s and the Company Subsidiaries’ “nonqualified deferred compensation plans” within the meaning of Code Section 409A comply with or are exempt from Code Section 409A; specifically each such “nonqualified deferred compensation plan” that is subject to Code Section 409A has been administered in good faith and operated in material compliance with Code Section 409A, and no such “nonqualified deferred compensation plan” that is not subject to Code Section 409A has been materially modified within the meaning of Code Section 409A. To the knowledge of the Company, no event has occurred that would be treated by Section 409(A)(b) as a transfer of property for purposes of Section 83 of the Code. To the knowledge of the Company, each Company Option has been issued at not less than 100% of fair market value on the date of grant.

3.10 Title to Properties .

(a) The Company and each Company Subsidiary has good and valid title to all of their respective tangible assets and personal properties (including those shown on the Company Balance Sheet, except assets and personal properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all Encumbrances, except (a) Permitted Encumbrances, and (b) mortgages deeds of trust, security interests or other encumbrances on title related to indebtedness reflected on the consolidated financial statements of the Company included in the Company SEC Documents. All properties used in the operation of the Company Business are reflected on the Company Balance Sheet to the extent required under GAAP to be so reflected.

(b) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, the tangible personal property and equipment of each of the Company and each Company Subsidiary that are used in the operations of their respective businesses are (i) reasonably suitable for the uses to which they are currently employed, (ii) in reasonable operating condition and repair, subject to normal wear and tear, (iii) maintained in the ordinary course of business consistent with past practice, (iv) to the knowledge of the Company, free from any material defects, and (v) to the extent leased, subject to a valid, fully effective lease that affords the Company or such Company Subsidiary peaceful and undisturbed leasehold possession of the personal property that is the subject of the lease.

(c) Schedule 3.10(c)-1 of the Company Disclosure Letter sets forth, as of the Agreement Date, a complete and correct list of all real property and interests in real property currently owned by the Company or any Company Subsidiary (each, an “ Owned Real Property ”). Schedule 3.10(c)-2 of the Company Disclosure Letter sets forth, as of the Agreement Date, (i) a true and complete list of all real property leased, subleased or otherwise occupied by the Company or any Company Subsidiary that either alone, or grouped with other real property leased, subleased or otherwise occupied by the Company or any Company Subsidiary in the same geographic location and use, consists of 50,000 square feet or more (each, a “ Leased Real Property ”), (ii) the address for each Leased Real Property, and (iii) the rent amounts payable by the Company or the Company Subsidiary related to such Leased Real Property as of the date set forth in such schedule. All of the leases, subleases and other agreements with respect to the Leased Real Property are referred to herein as “ Lease Agreements .” Except as would not reasonably be expected to have, individually

or in the aggregate, a Material Adverse Effect on the Company, no Owned Real Property or Lease Agreement is subject to any Encumbrance other than Permitted Encumbrances, including any mortgage, pledge, lien, encumbrance, sublease, assignment, license or other agreement granting to any third party any interest in such Owned Real Property or Lease Agreement or any right to the use or occupancy of any Owned Real Property or Leased Real Property. With respect to each Owned Real Property or Leased Real Property, neither the Company nor any Company Subsidiary has subleased, licensed or otherwise granted anyone a right to use or occupy such Owned Real Property or Leased Real Property, as applicable, or any material portion thereof. The Company and the Company Subsidiaries enjoy peaceful and undisturbed possession of the Owned Real Property and the Leased Real Property, except where the failure to have such possession would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

(d) To the knowledge of the Company, the Company and the Company Subsidiaries are not in violation of any zoning, building, safety or environmental ordinance, regulation or requirement applicable to the operation of the Owned Real Property or Leased Real Property, except for such violations that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, nor to the knowledge of the Company, has the Company or any of the Company Subsidiaries received any notice of violation of any such ordinance, regulation or requirement with which it has not complied.

(e) For the avoidance of doubt, the representations and warranties set forth in this Section 3.10 do not apply to Intellectual Property, which matters are addressed in Section 3.14 .

3.11 Absence of Certain Changes . Since the Balance Sheet Date to and including the Agreement Date, (a) except for actions taken or not taken in connection with the transactions contemplated by this Agreement, or any actions taken or not taken during such period in connection with discussions entered into in respect of a similar transaction with any other Person, the Company and the Company Subsidiaries, taken as a whole, have operated their business, in all material respects, in the ordinary course consistent with its past practices, (b) since such date there has not been any Material Adverse Change on the Company that is continuing, and (c) the Company has not taken any action that would be prohibited by Section 5.4 if proposed to be taken after the Agreement Date.

3.12 Contracts, Agreements, Arrangements, Commitments and Undertakings . Schedules 3.12(a)-(l)  of the Company Disclosure Letter set forth a list of each of the following Contracts to which the Company or any Company Subsidiary is a party or to which the Company or any Company Subsidiary or any of their respective assets or properties is bound (each a “ Company Material Contract ”) as of the Agreement Date:

(a) any Contract that is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC);

(b) (i) any material joint venture or partnership Contract that involves a sharing of revenues, profits, cash flows, expenses or losses with any other party, or (ii) any Contract that

involved a payment of royalties to any other party in amounts in excess of $500,000 during the Company’s fiscal year 2008, or (iii) other than any Contracts referred to in the previous clause (ii) and other than any Contracts that license to the Company or any Company Subsidiary generally commercially available off the shelf technology or Intellectual Property, any Contract pursuant to which the Company or any Company Subsidiary acquired or is granted any right to any Third Party Intellectual Property Rights (as defined in Section 3.14(a)(v) ) pursuant to which the Company or any Company Subsidiary is required to pay in excess of $250,000 per annum;

(c) any Contract for capital expenditures that require future payments in excess of $500,000 by the Company or any Company Subsidiary.

(d) any indenture, mortgage, trust deed, promissory note, loan agreement, security agreement, guarantee or other Contract for or with respect to the borrowing of money, a line of credit, any currency exchange, commodities or other hedging arrangement (other than monthly balance sheet hedging arrangements entered into in the ordinary course of business consistent with past practice), or a leasing transaction of a type required to be capitalized in accordance with GAAP, in each case, in excess of $5,000,000, other than (i) accounts receivables and payables and (ii) loans between any of the Company and/or any wholly-owned Company Subsidiary, in each case in clauses (i) and (ii) in the ordinary course of business consistent with past practice;

(e) any Contract under which it is lessee of or holds or operates any tangible personal property owned by any third party which is material to the operations of the Company and the Company Subsidiaries, taken as a whole;

(f) any Contract that (i) restricts it from engaging in any material aspect of its business, (ii) restricts it from participating or competing in any material line of business or market, or (iii) grants to any Person an exclusive license to any Company-Owned IP Right, in each case other than Contracts that are not, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole;

(g) any material Contract granting any right or license under any material Company IP Right (other than (A) Contracts for the direct sale or provision of products or services to, or by, the Company or any Company Subsidiary, (B) Contracts with distributors and resellers entered into in the ordinary course of business which do not provide for the grant to the Company or any Company Subsidiary of any material Company IP Rights, or (C) Contracts disclosed by the Company in the Company Disclosure Letter under sub-clause (b) of this Section 3.12 ) or (ii) any material Contract pursuant to which a third party has been granted a right to control the prosecution or enforcement of a patent that is a material Company-Owned IP Right;

(h) any Contract of guarantee, assumption or endorsement of, or any similar commitment with respect to, the Debt or performance obligations of any other Person, in each case, that is material to the Company and the Company Subsidiaries taken as a whole;

(i) any Contract pursuant to which it has acquired a business or entity, or all or substantially all of the assets of a business or entity, whether by way of merger, consolidation, purchase of stock, purchase of assets, license or otherwise, which has any obligations which have not been satisfied or performed that are or would be material to the Company and the Company Subsidiaries, taken as a whole;

(j) any Contract pursuant to which it is a lessor or lessee of any individual parcel of real property in excess of 50,000 square feet or any Contract pursuant to which it is a lessor or lessee relating to a parcel of real property, which when coupled with other parcels of real property leased by or to the Company or any Company Subsidiary, in the same geographic location and use exceeds 50,000 square feet;

(k) any Contract with any investment banker, broker, advisor or similar party, or any accountant or legal counsel retained by it in connection with this Agreement and the transactions contemplated hereby; or

(l) any settlement or litigation “standstill” agreement, or any tolling agreement (other than settlement agreements entered into in the ordinary course of business with employees upon the termination of their employment where all material obligations of the Company have been fully performed by the Company (it being understood that anti-disparagement and confidentiality provisions and mutual releases shall not be considered material obligations of the Company for this purpose)).

A true and complete copy of each agreement or document required by these subsections (a)-(l) of this Section 3.12 to be listed on Schedule 3.12 of the Company Disclosure Letter has been delivered or made available to Acquiror or its counsel. All Company Material Contracts are in written form.

3.13 No Default; No Restrictions .

(a) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, (i) the Company or the applicable Company Subsidiary has performed all of the obligations required to be performed by it and is entitled to all benefits under each Company Material Contract, (ii) each of the Company Material Contracts is in full force and effect and enforceable against the Company in accordance with its terms, except that such enforceability (A) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting or relating to creditors’ rights generally, and (B) is subject to general principles of equity, and (iii) there exists no default or event of default or event, occurrence, condition or act, on the part of or attributable to the Company or any Company Subsidiary, or to the knowledge of the Company, on the part of or attributable to any other contracting party, which, with or without the giving of notice, the lapse of time or the happening of any other event or conditions, would reasonably be expected to (A) become a material default or event of default under any Company Material Contract or (B) give any third party (1) the right to declare a material default or exercise any material remedy under any Company Material Contract, (2) the right to a material rebate or reimbursement under any Company Material Contract, (3) the

right to accelerate the maturity or performance of any material obligation of the Company or any of the Company Subsidiaries under any Company Material Contract, or (4) the right to cancel, terminate or adversely modify any Company Material Contract. Neither the Company nor any Company Subsidiary has received any written notice or other communication regarding any actual or possible material violation or breach of or default under, or intention to cancel or materially adversely modify, any Company Material Contract where the subject matter of such notice remains pending and unresolved.

(b) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, to the knowledge of the Company, with respect to any Contract with a Governmental Authority, there is not an existing: (i) civil fraud or criminal investigation by any Governmental Authority; (ii)  qui tam action brought against the Company or any of the Company Subsidiaries under the Civil False Claims Act; (iii) suspension or debarment proceeding (or equivalent proceeding) against the Company or any of the Company Subsidiaries; (iv) claim or request by a Governmental Authority for a contract price adjustment based on asserted defective pricing, disallowance of cost or non-compliance with statute, regulation or contract, other than in connection with routine audits requested by such Governmental Authority and involving amounts that would not be material to the Company and the Company Subsidiaries, taken as a whole; (v) dispute involving the Company or any of the Company Subsidiaries on such Contract, other than routine audits performed by such Governmental Authority in the ordinary course which have not resulted in any material claims by such Governmental Authority against the Company or any of the Company Subsidiaries; or (vi) claim or equitable adjustment by the Company or any of the Company Subsidiaries relating to such Contract, other than in connection with routine audits requested by such Governmental Authority involving amounts that would not be material to the Company and the Company Subsidiaries, taken as a whole.

3.14 Intellectual Property .

(a) As used in this Agreement, the following terms shall have the meanings indicated below:

(i) “ Intellectual Property ” means any and all worldwide industrial and intellectual property rights and all rights associated therewith, including all patents and applications therefor, all rights in inventions (whether patentable or not), invention disclosures, trade secrets, proprietary information, know how, technology, technical data, proprietary processes and rights in formulae, algorithms, specifications, customer lists and supplier lists, all industrial designs and any registrations and applications therefor, all trade names, logos, trade dress, trademarks and service marks, trademark and service mark registrations, trademark and service mark applications therefor and any and all goodwill associated with and symbolized by the foregoing items, Internet domain name registrations, Internet and World Wide Web URLs or addresses, all copyrights, copyright registrations and applications therefor, and all other rights corresponding thereto, all rights in mask works, mask work registrations and applications therefor, and any equivalent or similar rights in semiconductor masks, layouts, architectures or topology, all computer software, including all source code, object code, firmware, development tools, files, records and data, all schematics, netlists, test methodologies,

test vectors, emulation and simulation tools and reports, hardware development tools, and all rights in prototypes, breadboards and other devices, all databases and data collections and all rights therein, all moral and economic rights of authors and inventors, however denominated, and all tangible embodiments of the foregoing.

(ii) “ Company IP Rights ” means (A) any and all Intellectual Property used in the conduct of the Company Business; and (B) any and all other Intellectual Property owned by the Company or the Company Subsidiaries.

(iii) “ Company-Owned IP Rights ” means Company IP Rights that are owned, or are purported by the Company to be owned, by the Company or any Company Subsidiary.

(iv) “ Company Registered Intellectual Property ” means all United States, international and foreign: (A) patents and patent applications (including provisional applications); (B) registered trademarks and service marks, applications to register trademarks and service marks, intent-to-use applications, or other registrations or applications related to trademarks and service marks; (C) registered Internet domain names; (D) registered copyrights and applications for copyright registration; and (E) any other Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any Governmental Authority owned by, registered or filed in the name of, the Company or any Company Subsidiary.

(v) “ Third Party Intellectual Property Rights ” means any Intellectual Property owned by a third party.

(vi) “ Company Products ” means all services or products currently produced, marketed, licensed, sold, distributed or performed by or on behalf of the Company or any Company Subsidiary.

(vii) “ Open Source Materials ” means all software or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution terms (including but not limited to the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL) the Sun Industry Standards License (SISL) and the Apache License).

(b) The Company and the Company Subsidiaries (i) own or (ii) have the valid right or license to all material Company IP Rights ( provided , however , with respect to Third Party patents, such representation and warranty is made to the knowledge of the Company). The Company IP Rights are sufficient for the conduct of the Company Business ( provided , however , with respect to Third Party patents, such representation and warranty is made to the knowledge of the Company).

(c) During the three years prior to and including the Agreement Date, neither the Company nor any Company Subsidiary has transferred ownership of any Intellectual Property that is or was material Company-Owned IP Rights, to any third party.

(d) The Company and the Company Subsidiaries own and have good and exclusive title to each material item of Company-Owned IP Rights and each material item of Company Registered Intellectual Property, free and clear of any Encumbrances and any licenses (other than licenses granted in the ordinary course of the Company Business).

(e) Neither the execution and delivery or effectiveness of this Agreement nor the performance of the Company’s obligations under this Agreement will because of an agreement to which the Company or any Company Subsidiary is a party: (i) cause the forfeiture or termination of, give rise to a right of forfeiture or termination of any material Company-Owned IP Rights, (ii) materially impair the right of the Company, any Company Subsidiary or Surviving Corporation to use, possess, sell or license any material Company-Owned IP Right or portion thereof, or (iii) result in the grant to any Person of any rights or licenses to, or options to license, any of Acquiror’s or any Acquiror Subsidiary’s Intellectual Property (excluding the Surviving Corporation’s or any Company Subsidiary’s Intellectual Property). After the Closing, all material Company-Owned IP Rights will not be subject to any restrictions on transferability, alienation or licensing by Surviving Corporation, or any requirement to make any payment of any kind to any third party, because of any agreement to which the Company or any Company Subsidiary is a party, subject to any Permitted Encumbrances and licenses granted in the ordinary course of the Company Business.

(f) Each material item of Company Registered Intellectual Property is subsisting (or in the case of applications, applied for) and valid (excluding applications), all registration, maintenance and renewal fees currently due in connection with such material Company Registered Intellectual Property have been paid and all documents, recordations and certificates in connection with such material Company Registered Intellectual Property currently required to be filed have been filed with the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of prosecuting, maintaining and perfecting such material Company Registered Intellectual Property and recording the Company’s and the Company Subsidiaries’ ownership interests therein.

(g) To the knowledge of the Company, there is no material unauthorized use of any Company-Owned IP Right, unauthorized disclosure of Confidential Information (as defined in Section 3.14(n) ) or infringement or misappropriation of any Intellectual Property rights in any Company-Owned IP Rights by any third party, including any employee or former employee of the Company or any Company Subsidiary. Since September 29, 2006, neither the Company nor any Company Subsidiary has brought any Legal Proceeding for infringement or misappropriation of any Intellectual Property.

(h) Since September 29, 2006, neither the Company nor any Company Subsidiary has been sued in any Legal Proceeding (or received any written notice or, to the knowledge of the Company, threat) which involves a claim of infringement or misappropriation of any Third Party Intellectual Property Right or which contests the validity, ownership or right of the Company or any Company Subsidiary to exercise any Intellectual Property right or which involves a claim that the Company or any Company Subsidiary has breached or is not in compliance with the terms of any Contract governing the use of Open Source Materials or that any Company Product (or

any portion thereof) is required to be (A) disclosed or distributed in source code form, (B) licensed for the purpose of making derivative works, or (C) redistributable at no charge, in each case pursuant to the terms of any Contract governing the use of Open Source Materials. Since September 29, 2006, neither the Company nor any Company Subsidiary has received any written communication challenging the validity, enforceability, or Company’s ownership of, any material Company-Owned IP Rights.

(i) The operation of the Company Business, including (i) the design, development, manufacturing, reproduction, marketing, licensing, sale, offer for sale, importation, distribution, provision and/or use of any Company Product and (ii) the Company’s or any Company Subsidiary’s use of any product, device or process used in the Company Business, does not infringe or misappropriate any Third Party Intellectual Property Right ( provided , however , with respect to Third Party patents, such representation and warranty is made to the knowledge of the Company) and does not constitute unfair competition or unfair trade practices under the laws of any jurisdiction in a manner reasonably expected to result in a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole and, to the knowledge of the Company, there is no substantial basis for a claim that the design, development, manufacturing, reproduction, marketing, licensing, sale, offer for sale, importation, distribution, provision and/or use of any Company Product or the operation of the Company Business is infringing or has infringed on or misappropriated any Third Party Intellectual Property Right.

(j) To the knowledge of the Company, none of the Company-Owned IP Rights, the Company Products, the Company or any Company Subsidiary is subject to any proceeding (other than normal prosecution of patent and trademark applications in any foreign or domestic Patent and Trademark Office), outstanding order or stipulation (A) restricting in any manner the use, transfer, or licensing by the Company or any Company Subsidiary of any Company-Owned IP Right or any Company Product, or which would reasonably be expected to affect the validity, use or enforcea