AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

by and between

DELL INC.,

DII — HOLDINGS INC.

and

PEROT SYSTEMS CORPORATION

September 20, 2009

TABLE OF CONTENTS

AGREEMENT AND PLAN OF MERGER

     THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is entered into as of September 20, 2009 by and among Dell Inc., a Delaware corporation (“ Parent ”), DII — Holdings Inc., a Delaware corporation and an indirect, wholly owned subsidiary of Parent (“ Merger Sub ”), and Perot Systems Corporation, a Delaware corporation (the “ Company ”). Each of Parent, Merger Sub and the Company are sometimes referred to herein as a “ Party ” and collectively as the “ Parties .” An index of terms defined in this Agreement is set forth on Annex A attached hereto.

     WHEREAS, the Parties intend that Merger Sub be merged with and into the Company (the “ Merger ”), with the Company surviving the Merger as an indirect, wholly owned subsidiary of Parent pursuant to the provisions of the General Corporation Law of the State of Delaware (the “ DGCL ”) and upon the terms and subject to the conditions set forth herein;

     WHEREAS, on the terms and subject to the conditions set forth herein, including Annex B hereto, Merger Sub has agreed to commence (within the meaning of Rule 14d-2 promulgated under the Exchange Act) an offer (the “ Offer ”) to purchase for cash all of the issued and outstanding shares of the Company’s Class A Common Stock, par value $0.01 per share (the “ Common Stock ”), at a price of $30.00 per share of Common Stock, or any higher price per share of Common Stock paid by Merger Sub pursuant to the terms of the Offer for shares of Common Stock tendered pursuant to the Offer;

     WHEREAS, following consummation of the Offer, Merger Sub shall merge with and into the Company in the Merger and each share of Common Stock that is issued and outstanding immediately prior to the Effective Time (other than shares of Common Stock held in treasury of the Company and shares of Common Stock owned, directly or indirectly, by Parent or Merger Sub or held by the Company or any Subsidiary of the Company, which will be canceled with no consideration issued in exchange therefor, and shares of Common Stock as to which appraisal rights have been perfected pursuant to the DGCL) will be canceled and converted into the right to receive cash in an amount equal to the Per Share Amount, all upon the terms and conditions set forth herein;

     WHEREAS, concurrently with the execution of this Agreement, and as a condition and material inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, Parent, Merger Sub, the Company and certain officers, directors and principal stockholders of the Company listed in Section 3.32 of the Company Disclosure Letter have entered into Tender and Voting Agreements (collectively, the “ Tender Agreements ”);

     WHEREAS, concurrently with the execution of this Agreement, and as a condition and material inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, the officers of the Company listed in Section 3.30 of the Company Disclosure Letter have entered into and delivered to Parent certain Protection of Sensitive Information, Noncompetition and Nonsolicitation Agreements and certain separate employment agreements with Parent (collectively, the “ Employment Agreements ”);

     WHEREAS, concurrently with the execution of this Agreement, and as a condition and material inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, the officer of the Company listed in Section 3.31 of the Company Disclosure Letter has entered into and delivered to Parent that certain Retention Agreement with Parent (the “ Retention Agreements ”);

     WHEREAS, concurrently with the execution of this Agreement, and as a condition and material inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, Parent, Merger Sub, the Company and certain principal stockholders of the Company listed in Section 3.33 of the Company Disclosure Letter have entered into non-competition and non-solicitation agreements (collectively, the “ Non-Competition Agreements ”);

     WHEREAS, concurrently with the execution of this Agreement, and as a condition and material inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, the Company, Perot Systems Family Corporation, a Texas corporation (“ PSFC ”), H. Ross Perot, an individual domiciled in Texas, and Ross Perot, Jr., an individual domiciled in Texas (PSFC, H. Ross Perot and Ross Perot, Jr., collectively, the “ Licensors ”), have entered into a Third Amended and Restated License Agreement amending and restating the terms of the Second Amended and Restated License Agreement, dated May 18, 1988, among the Company and the Licensors (as amended and restated, the “ Amended License Agreement ”);

     WHEREAS, the board of directors of the Company (the “ Board of Directors ”) has (a) determined that the terms of the Offer, the Merger and the other transactions contemplated by this Agreement are fair to and in the best interests of the Company and its stockholders, (b) approved and declared this Agreement advisable in accordance with the DGCL and (c) determined to recommend that the Company’s stockholders accept the Offer and tender their shares of Common Stock to Merger Sub pursuant thereto and, to the extent applicable, to adopt this Agreement; and

     WHEREAS, the board of directors of each of Parent and Merger Sub have approved this Agreement and declared it advisable for Parent and Merger Sub, respectively, to enter into this Agreement.

     NOW, THEREFORE, in consideration of the premises and of representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE 1

THE TENDER OFFER

     Section 1.1 The Offer .

          (a) Provided that this Agreement shall not have been terminated in accordance with ARTICLE 7 and that none of the events set forth in clauses (c) or (d) of the first paragraph of Annex B hereto shall have occurred and be continuing, within ten business days (as such term is defined in Rule 14d-1(g)(3) promulgated under the Exchange Act, “ Business Days ”) after the date hereof, Merger Sub shall (and the Company shall cooperate with Merger Sub to) commence

(within the meaning of Rule 14d-2 promulgated under the Exchange Act) an offer to purchase all outstanding shares of Common Stock of the Company at the purchase price of $30.00 per share of Common Stock (such price, or any higher price per share of Common Stock paid by Merger Sub pursuant to the terms of the Offer, the “ Per Share Amount ”) and shall, upon commencement of the Offer but after affording the Company and its counsel reasonable opportunity to review and comment thereon and giving reasonable and good faith consideration to any comments made thereby, file a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, including the exhibits thereto, the “ Schedule TO ”) and all other necessary documents with the Securities and Exchange Commission (the “ SEC ”) and make all deliveries, mailings and telephonic notices required by Rule 14d-3 promulgated under the Exchange Act, in each case in connection with the Offer (the “ Offer Documents ”), and shall consummate the Offer, subject to the terms and conditions hereof and thereof. The Offer Documents will comply in all material respects with the provisions of all applicable Federal securities Laws. Subject to the terms and conditions of this Agreement and to the satisfaction or waiver of the conditions set forth in Annex B hereto (the “ Tender Offer Conditions ”), Merger Sub shall, upon the expiration of the Offer, accept for payment, and pay for (after giving effect to any required withholding or stock transfer Tax), all shares of Common Stock validly tendered pursuant to the Offer and not withdrawn on the Acceptance Date. The obligation of Merger Sub to accept for payment and to pay for any shares of Common Stock validly tendered shall be subject solely to the satisfaction or waiver by Merger Sub of the Tender Offer Conditions. The Per Share Amount shall be net to the seller in cash, without interest, subject to reduction for any applicable withholding or stock transfer Taxes payable by such seller. No shares of Common Stock held by the Company or its Subsidiaries shall be tendered pursuant to the Offer.

          (b) Parent on behalf of Merger Sub expressly reserves the right from time to time, subject to Section 1.1(c) and Section 1.1(d) , in its sole discretion, to waive any Tender Offer Condition, to increase the Per Share Amount or to make any other changes in the terms and conditions of the Offer; provided , that without the prior written consent of the Company, Merger Sub shall not (i) decrease the Per Share Amount or change the form of consideration payable in the Offer, (ii) decrease the number of shares of Common Stock sought to be purchased in the Offer, (iii) amend or waive satisfaction of the Minimum Condition (as defined in Annex B ), (iv) impose additional conditions to the Offer, (v) make any change in the Offer that would require an extension or delay of the then current Expiration Date; provided , however , that this clause (v) shall not limit the right of Parent and Merger Sub to extend the Expiration Date as required or permitted by Section 1.1(d) , (vi) modify or amend the Tender Offer Conditions (other than to waive such Tender Offer Conditions, except for the Minimum Condition) or (vii) modify or amend any other term of the Offer, in the case of clauses (vi) and (vii) , in any manner materially adverse to the holders of shares of Common Stock in their capacities as holders of shares of Common Stock.

          (c) No agreement or representation hereby is made or shall be made by Parent or Merger Sub with respect to information supplied by the Company expressly for inclusion in, or with respect to Company information derived from the Company SEC Filings that is included or incorporated by reference in, the Offer Documents. Parent, Merger Sub and the Company each agrees promptly to correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect. Merger Sub shall cause the Schedule TO, as so corrected or supplemented, to be filed with the SEC and

the Offer Documents, as so corrected or supplemented, to be promptly disseminated to the Company’s stockholders, in each case as and to the extent required by applicable Federal securities Laws. The Company and its counsel shall be given a reasonable opportunity to review and comment on any Offer Documents (including each amendment or supplement thereto) before they are filed with the SEC. Merger Sub shall give reasonable and good faith consideration to any comments made by the Company and its counsel. Merger Sub shall provide the Company with (in writing, if written), and shall consult with the Company regarding, any comments (written or oral) that may be received by Parent, Merger Sub or their counsel from the SEC or its staff with respect to the Offer Documents promptly after receipt thereof. The Company and its counsel shall be given a reasonable opportunity to review any proposed responses before they are filed with the SEC.

          (d) The initial expiration date of the Offer shall be the 20 ^th Business Day following the commencement of the Offer (determined using Rules 14d-1(g)(3) and 14d-2 promulgated under the Exchange Act) (such date, or such subsequent date to which the expiration of the Offer is extended pursuant to and in accordance with the terms of this Agreement, the “ Expiration Date ”). Merger Sub shall not terminate or withdraw the Offer other than in connection with the effective termination of this Agreement in accordance with Section 7.1 hereof. Notwithstanding the foregoing, unless this Agreement is terminated in accordance with ARTICLE 7 , Merger Sub, without Parent or Merger Sub obtaining the consent of the Company, (i) shall extend the Expiration Date for any period required by the rules and regulations of the SEC or the New York Stock Exchange (the “ NYSE ”) applicable to the Offer, including in connection with an increase in the Per Share Amount, (ii) shall extend the Expiration Date if, on any then scheduled Expiration Date, any of the Tender Offer Conditions is not satisfied or waived by Parent, for such periods for up to five Business Days at a time (or such other period as shall be approved by the Company) as Merger Sub may deem reasonably necessary, but, except as provided in Section 1.1(d)(iii) or as required by the rules and regulations of the SEC or the NYSE applicable to the Offer (including in connection with an increase in the Per Share Amount), in no event may the Expiration Date be extended pursuant to this clause (ii) to a date later than the Outside Date, and (iii) may extend the Expiration Date beyond the Outside Date for up to a period not to exceed the period which ends on the 15 ^th Business Day after the date that either (w) the Company shall have publicly announced the receipt of an Acquisition Proposal in the event such announcement is made less than 10 Business Days prior to the Outside Date, (x) the Company publicly announces its reaffirmation of its approval or recommendation of the Offer following the public announcement of the receipt of any Acquisition Proposal in the event that such reaffirmation or announcement is made less than 10 Business Days prior to the Outside Date, (y) an Adverse Recommendation Change has occurred prior to the Outside Date or (z) the Company advises Parent of an Acquisition Proposal in accordance with Section 5.3(d) if such advisement is received by Parent less than 10 Business Days prior to the Outside Date. Except as expressly provided in this Section 1.1(d) , Parent shall not extend the Offer if all of the Tender Offer Conditions are satisfied or waived and it is permitted under applicable Law to accept for payment and pay for validly tendered shares of Common Stock that are not validly withdrawn. Nothing in this Section 1.1(d) shall affect any termination rights in ARTICLE 7 .

          (e) In the event the Acceptance Date occurs but Merger Sub does not acquire a sufficient number of shares of Common Stock to enable a Short-Form Merger to occur

pursuant to Section 2.7 hereof, Merger Sub may (in its sole discretion) provide a “subsequent offering period” for a number of days to be determined by Parent but not less than three nor more than 20 Business Days in accordance with Rule 14d-11 promulgated under the Exchange Act.

          (f) Promptly upon the satisfaction or waiver by Merger Sub of the Tender Offer Conditions in accordance with Section 1.1(b) , Merger Sub shall (i) as soon as practicable after the Expiration Date, accept for payment and pay for all shares of Common Stock validly tendered and not properly withdrawn pursuant to the Offer (the date of acceptance for payment, the “ Acceptance Date ”), which acceptance may be by oral notice to the Paying Agent, (ii) on the Acceptance Date, deposit or cause to be deposited with the Paying Agent, cash in U.S. dollars sufficient to pay the aggregate Per Share Amount for all such accepted shares of Common Stock and (iii) as soon as practicable following such deposit, cause the Paying Agent to pay for all shares of Common Stock so accepted for payment. Parent shall provide or cause to be provided to Merger Sub on a timely basis the funds necessary to purchase any shares of Common Stock that Merger Sub becomes obligated to purchase pursuant to the Offer.

          (g) Promptly after the Acceptance Date, the Company shall take all action requested by Parent necessary to elect to be treated as a “controlled company” as defined by New York Stock Exchange Rule 303A.00 and make any necessary filings and disclosures associated with such status.

     Section 1.2 Company Action .

          (a) The Company hereby consents to the Offer and represents that the Board of Directors, at a duly called and held meeting, has unanimously (by all directors present) adopted resolutions: (i) determining that the terms of the Offer, the Merger and the other transactions contemplated by this Agreement are fair to and in the best interests of the Company and its stockholders, and declaring the Agreement advisable; (ii) approving the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Tender Agreements, the Offer and the Merger; (iii) recommending that the stockholders of the Company accept the Offer, tender their shares of Common Stock to Merger Sub pursuant to the Offer and, if applicable, approve and adopt this Agreement and the Merger (the actions in clause (iii) , “ Recommendation ”); (iv) rendering the restrictions on business combinations contained in Section 203 of the DGCL inapplicable to the Tender Agreements, the Offer, this Agreement and the other transactions contemplated hereby, including the Merger; (v) resolving to make the Recommendation to the stockholders of the Company and directing, that, to the extent required by the DGCL, this Agreement be submitted for adoption by the stockholders of the Company at the Company Meeting and (vi) electing that the Offer and the Merger, to the extent of the Board of Directors’ power and authority and to the extent permitted by Law, not be subject to any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of anti-takeover Laws (collectively, “ Takeover Laws ”) of any jurisdiction that may purport to be applicable to this Agreement (such actions by the Board of Directors described in the preceding clauses (i) through (vi) , collectively, the “ Board Actions ”). The Company hereby consents to the inclusion of the Recommendation in the Offer Documents. The Company has been advised that certain officers, directors and principal stockholders of the Company who own shares of Common Stock intend either to tender their shares of Common Stock pursuant to the Offer or vote to adopt the Agreement.

          (b) The Company shall file with the SEC, concurrently with the filing by Parent and Merger Sub of the Schedule TO with respect to the Offer, a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the “ Schedule 14D-9 ”) that will comply in all material respects with the provisions of all applicable Federal securities Laws. The Company agrees to mail such Schedule 14D-9 to the stockholders of the Company along with the Offer Documents promptly after the commencement of the Offer. Subject to any Adverse Recommendation Change in accordance with this Agreement, the Schedule 14D-9 and the Offer Documents shall contain the Recommendation. The Company agrees to promptly correct the Schedule 14D-9 if and to the extent that it shall have become false or misleading in any material respect (and each of Parent and Merger Sub, with respect to written information supplied by it, shall promptly notify the Company of any required corrections of such information and cooperate with the Company with respect to correcting such information) and to supplement the information contained in the Schedule 14D-9 to include any information that shall become necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Company shall cause the Schedule 14D-9 as so corrected or supplemented to be filed with the SEC and promptly disseminated to the Company’s stockholders, in each case as and to the extent required by applicable Federal securities Laws. Parent and its counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 before it is filed with the SEC. The Company shall give reasonable and good faith consideration to any comments made by Parent and its counsel. The Company shall provide Parent and Merger Sub (in writing, if written), and consult with Parent and Merger Sub regarding, any comments (written or oral) that the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of such comments. Parent and Merger Sub and their counsel shall be given a reasonable opportunity to review and comment on any proposed responses before they are filed with the SEC.

          (c) In connection with the Offer, the Company shall promptly furnish, or cause its transfer agent to furnish, Parent and Merger Sub with mailing labels, security position listings, non-objecting beneficial owner lists and all reasonably available listings and computer files containing the names and addresses of the record holders of the Common Stock as of the most recent practicable date and shall furnish, or cause its transfer agent to furnish, Parent and Merger Sub with such additional available information and assistance (including updated lists of stockholders and their addresses, mailing labels and lists of security positions and non-objecting beneficial owner lists as they become available) and such other assistance as Parent and Merger Sub or their agents may reasonably request in communicating the Offer to the record and beneficial holders of Common Stock. Subject to the requirements of applicable Law and stock exchange rules, and except for such actions as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Offer and the Merger prior to a termination in accordance with Section 7.1 , such information and materials shall be deemed “Evaluation Material” under the Confidentiality Agreement. In connection with the Offer, the Company shall furnish Parent with such information (which will be treated and held in confidence by Parent in accordance with the immediately preceding sentence) and assistance as Parent or its officers, employees, accountants, counsel and other representatives may reasonably request in connection with the preparation of the Offer and Offer Documents and communicating the Offer to the record and beneficial holders of shares of Common Stock.

     Section 1.3 Top-Up Option .

          (a) Grant of Top-Up Option . The Company hereby grants to Parent and Merger Sub an irrevocable option (the “ Top-Up Option ”) to purchase, at a price per share equal to the Per Share Amount (the “ Per Common Share Price ”), up to that number of newly issued shares of Common Stock (the “ Top-Up Option Shares ”) that, when added to the number of shares of Common Stock owned, directly or indirectly, by Parent or Merger Sub at the time of exercise of the Top-Up Option (excluding shares of Common Stock tendered in the Offer pursuant to guaranteed delivery procedures as to which delivery has not been completed as of the time of exercise of the Top-Up Option), constitutes one share of Common Stock more than 90% of the sum of (x) the total number of shares of Common Stock outstanding immediately after the issuance of the Top-Up Option Shares and (y) the total number of shares of Common Stock that are issuable within ten Business Days after the issuance of the Top-Up Option Shares upon the vesting, conversion or exercise of all outstanding options, warrants, convertible or exchangeable securities and similar rights, regardless of the conversion or exercise price or other terms and conditions thereof. The Top-Up Option may be exercised at any time on or after any Expiration Date and on or prior to the fifth Business Day after the later to occur of the Expiration Date or the expiration date of any “subsequent offering period” under Section 1.1(e) ; provided , however , that the obligation of the Company to deliver Top-Up Option Shares upon the exercise of the Top-Up Option is subject to the conditions that (i) no provision of any applicable Law (other than pursuant to the rules and regulations of the NYSE) shall prohibit the exercise of the Top-Up Option or the delivery of the Top-Up Option Shares in respect of such exercise, (ii) the issuance of Top-Up Option Shares pursuant to the Top-Up Option would not require approval by the Company’s stockholders under applicable Law (other than pursuant to the rules and regulations of the NYSE), (iii) immediately after the exercise of the Top-Up Option and issuance of the Top-Up Option Shares, the number of shares of Common Stock owned, directly or indirectly, by Parent or Merger Sub (excluding shares of Common Stock tendered in the Offer pursuant to guaranteed delivery procedures as to which delivery has not been completed as of the time of exercise of the Top-Up Option) constitutes one share of Common Stock more than 90% of the total outstanding shares of Common Stock, (iv) the number of Top-Up Option Shares issued pursuant to the Top-Up Option shall in no event exceed the number of authorized and unissued shares of Common Stock not otherwise reserved for issuance for outstanding Company Stock Options or other obligations of the Company and (v) Merger Sub has accepted for payment and deposited or caused to be deposited with the Paying Agent pursuant to Section 1.1(f)(ii) cash sufficient to pay the aggregate Per Share Amount for all accepted shares of Common Stock. The Parties shall cooperate to ensure that the issuance of the Top-Up Option Shares is accomplished consistent with all applicable Laws (other than pursuant to the rules and regulations of the NYSE), including compliance with an applicable exemption from registration of the Top-Up Option Shares under the Securities Act of 1933, as amended (the “ Securities Act ”).

          (b) Exercise of Top-Up Option . Upon the exercise of the Top-Up Option in accordance with Section 1.3(a) , Merger Sub shall so notify the Company and shall set forth in such notice (i) the number of shares of Common Stock expected to be owned, directly or indirectly, by Parent or Merger Sub immediately preceding the purchase of the Top-Up Option Shares and (ii) a place and time selected by Merger Sub for the closing of the purchase of the Top-Up Option Shares with the time for the closing being not more than five Business Days after the exercise of the Top-Up Option. The Company shall, as soon as practicable following receipt

of such notice, notify Merger Sub of the sum of (1) the number of shares of Common Stock then outstanding and (2) the total number of shares of Common Stock that are issuable within ten Business Days after the scheduled closing of the purchase of the Top-Up Option Shares upon the vesting, conversion or exercise of all outstanding options, warrants, convertible or exchangeable securities and similar rights, regardless of the conversion or exercise price or other terms and conditions thereof. At the closing of the purchase of the Top-Up Option Shares, Merger Sub shall pay the Company the aggregate purchase price payable for the Top-Up Option Shares pursuant to this Section 1.3 , and the Company shall cause to be issued to Merger Sub a certificate representing the Top-Up Option Shares. The aggregate purchase price payable for the Top-Up Shares may be paid either (i) entirely in cash or (ii) at the election of Merger Sub or Parent, by paying in cash an amount equal to not less than the aggregate par value of the Top-Up Option Shares and by Merger Sub executing and delivering to the Company an unsecured promissory note having a principal amount equal to the balance of the aggregate purchase price for the Top-Up Option Shares. Any such promissory note shall bear interest at the rate of interest that would be payable by Parent under its commercial paper program for a similar term of borrowing as of the date of the promissory note, shall mature on the first anniversary of the date of execution and delivery of such promissory note and may be prepaid at any time and from time to time, in whole or in part, without premium or penalty.

          (c) Adjustment upon Changes in Capitalization . In the event of any change in the number of shares of outstanding Common Stock by reason of any stock dividend, stock split, recapitalization, combination, exchange of shares, merger, consolidation, reorganization or the like or any other change in the corporate or capital structure of the Company that would have the effect of diluting Merger Sub’s rights under the Top-Up Option, the number of Top-Up Option Shares and the Per Common Share Price shall be adjusted appropriately so as to restore Merger Sub to its rights hereunder with respect to the Top-Up Option; provided , however , that nothing in this Section 1.3 shall be construed as permitting the Company to take any action or enter into any transaction otherwise prohibited by this Agreement.

          (d) Acknowledgement . Parent and Merger Sub acknowledge that the Top-Up Option Shares that Merger Sub may acquire upon exercise of the Top-Up Option will not be registered under the Securities Act and will be issued in reliance upon an exemption thereunder for transactions not involving a public offering. Parent and Merger Sub represent and warrant to the Company that Merger Sub is, and will be upon the purchase of the Top-Up Option Shares, an “accredited investor,” as defined in Rule 501 of Regulation D under the Securities Act. Merger Sub agrees that the Top-Up Option and the Top-Up Option Shares to be acquired upon exercise of the Top-Up Option are being and will be acquired by Merger Sub for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof (within the meaning of the Securities Act).

     Section 1.4 Directors .

          (a) Subject to compliance with applicable Law, promptly upon the deposit with the Paying Agent by Merger Sub in accordance with Section 1.1(f) of cash in U.S. dollars sufficient to pay the aggregate Per Share Amount for all shares of Common Stock validly tendered and not properly withdrawn pursuant to the Offer which represent at least 66 ² / ₃ % of the total outstanding shares of Common Stock, and from time to time thereafter, Parent shall be

entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors equal to the product of (i) the total number of directors on the Board of Directors (giving effect to the directors designated by Parent and elected or appointed to the Board pursuant to this sentence and including directors continuing to serve as directors of the Company) multiplied by (ii) the percentage (the “ Board Percentage ”) that the aggregate number of shares of Common Stock beneficially owned by Parent, Merger Sub or any of their affiliates (including, for purposes of such percentage, the shares of Common Stock that are accepted for payment pursuant to the Offer and that the Per Share Amount has been deposited for) bears to the aggregate number of shares of Common Stock outstanding; provided , that following the time directors designated by Parent are elected or appointed to the Board of Directors, and prior to the Effective Time, the Board of Directors shall always have at least three directors who are directors of the Company on the date hereof and who are neither officers of the Company nor designees, affiliates or associates (within the meaning of the Federal securities Laws) of Parent (each, an “ Independent Director ”); provided , further , that if there are in office fewer than three Independent Directors, the Company shall take all actions necessary to cause a person or, if there are two vacancies, two persons designated by the remaining Independent Director(s) to fill such vacancy(ies) who shall be neither an officer of the Company nor a designee, affiliate or associate of Parent, and each such person(s) shall be deemed to be an Independent Director for purposes of this Agreement, or, if no Independent Directors remain, the other directors shall designate three persons to fill the vacancies who shall be neither an officer of the Company nor a designee, affiliate or associate of Parent, and each such person shall be deemed to be an Independent Director for purposes of this Agreement. At each such time, the Company shall, subject to any limitations imposed by applicable Law or NYSE rules, also cause (x) each committee of the Board of Directors, (y) if requested by Parent, the board of directors of each of the Company’s Subsidiaries and (z) if requested by Parent, each committee of such board of directors of each of the Company’s Subsidiaries to include persons designated by Parent constituting the Board Percentage of each such committee or board as Parent’s designees constitute on the Board of Directors. The Company shall, upon request by Parent, secure the resignations of such number of directors as necessary to enable Parent’s designees to be elected or appointed to the Board of Directors in accordance with the terms of this Section 1.4(a) and shall cause Parent’s designees to be so elected or appointed. The Company shall promptly amend, or cause to be amended, the Bylaws, if necessary, to comply with the obligations of the Company pursuant to this Section 1.4 . The Company shall promptly take, at the Company’s expense, any lawful action necessary to effect any such election, including mailing to its stockholders the information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder ( provided , that Parent has provided the information described in the following sentence), unless such information has previously been provided to the Company’s stockholders in the Schedule 14D-9. Parent shall supply to the Company in writing and be solely responsible for any information with respect to itself and its nominees, directors and affiliates required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder.

          (b) Notwithstanding anything in this Agreement to the contrary, following the time directors designated by Parent are elected or appointed to the Board of Directors and prior to the Effective Time, the affirmative vote of a majority of the Independent Directors shall be required to (i) authorize any Contract between the Company and any of its Subsidiaries, on the one hand, and Parent, Merger Sub and any of their affiliates (other than the Company and any of its Subsidiaries), on the other hand, (ii) amend or terminate this Agreement on behalf of the

Company, (iii) use or waive any of the Company’s rights or remedies hereunder, (iv) extend the time for performance of Parent’s or Merger Sub’s obligations hereunder or (v) take any other action by the Company in connection with this Agreement or the transactions contemplated hereby required to be taken by the Board of Directors. The Independent Directors shall have the authority to retain such counsel (which may include current counsel to the Company) and other advisors at the expense of the Company as determined appropriate by the Independent Directors and shall have the authority to institute any action on behalf of the Company to enforce the performance of this Agreement.

ARTICLE 2

THE MERGER

     Section 2.1 The Merger . Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, Merger Sub shall merge with and into the Company at the Effective Time. As a result of the Merger, the separate corporate existence of Merger Sub shall cease, and the Company shall continue as the surviving corporation of the Merger (the “ Surviving Corporation ”).

     Section 2.2 Closing . Subject to the provisions of ARTICLE 6 , the closing of the Merger (the “ Closing ”) shall take place at the offices of Vinson & Elkins L.L.P., The Terrace 7, 2801 Via Fortuna, Suite 100, Austin, Texas 78746, at 10:00 a.m., local time, on the date (the “ Closing Date ”) that is the second Business Day after the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in ARTICLE 6 (other than those conditions that by their nature are to be satisfied by actions to be taken at the Closing, but subject to the satisfaction or waiver of such conditions), or at such other place, date and time as the Company and Parent may agree in writing; provided , however , that if, as of or immediately following the Acceptance Date, the expiration of any “subsequent offering period” pursuant to Section 1.1(e) or the purchase of the Top-Up Option Shares, Parent determines that a Short-Form Merger is available pursuant to Section 2.7 and Section 253 of the DGCL, the Closing shall, subject to the satisfaction or waiver of the conditions set forth in ARTICLE 6 , occur no later than the second Business Day immediately following the Acceptance Date, the expiration of such “subsequent offering period” or the purchase of the Top-Up Option Shares, as applicable.

     Section 2.3 Effective Time . Subject to the provisions of this Agreement, at the Closing, the Parties will cause a certificate of merger or a certificate of ownership and merger, as applicable (the “ Certificate of Merger ”), to be filed with the Secretary of State of the State of Delaware in accordance with Section 251 of the DGCL (or to the extent provided in Section 2.7 hereof, Section 253 of the DGCL). The Merger will become effective at such time as the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or at such later date or time as may be agreed by the Company and Merger Sub in writing and specified in the Certificate of Merger in accordance with the DGCL (the effective time of the Merger being hereinafter referred to as the “ Effective Time ”).

     Section 2.4 Effect of the Merger . At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the DGCL.

     Section 2.5 Certificate of Incorporation; Bylaws .

          (a) The certificate of incorporation of the Company as in effect immediately prior to the Effective Time shall be amended in its entirety in the Merger to read as set forth in Exhibit A hereto, and as so amended, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with applicable Law.

          (b) At the Effective Time, the bylaws of the Company shall be amended and restated in its entirety to read as the bylaws of Merger Sub in effect immediately prior to the Effective Time, except that the name of the Surviving Corporation shall be “Perot Systems Corporation.”

     Section 2.6 Directors and Officers . Each of the Parties shall take all necessary action to cause the directors of Merger Sub immediately prior to the Effective Time to be the initial directors of the Surviving Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation, and the officers of Merger Sub immediately prior to the Effective Time to be the initial officers of the Surviving Corporation, in each case retaining their respective positions, and until the earlier of their death, resignation or removal or until their respective successors are duly elected or appointed and qualified.

     Section 2.7 Merger Without Meeting of Stockholders . Notwithstanding anything in this Agreement to the contrary, but subject to ARTICLE 6 , if, as of immediately following the Acceptance Date, the expiration of any “subsequent offering period” pursuant to Section 1.1(e) , the purchase, if applicable, of the Top-Up Option Shares, and, if necessary, the expiration of the period for guaranteed delivery of shares of Common Stock in the Offer, Parent or any direct or indirect Subsidiary of Parent, taken together, shall own at least 90% of the total outstanding shares of Common Stock, the Parties shall, subject to ARTICLE 6 hereof, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the satisfaction of such threshold, without a meeting of stockholders of the Company, in accordance with Section 253 of the DGCL (such Merger, a “ Short-Form Merger ”).

     Section 2.8 Conversion of Securities . At and as of the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or its stockholders:

          (a) All of the shares of Common Stock (except as provided in Section 2.8(b) or Section 2.8(c) below) shall be converted into the right to receive in cash the Per Share Amount (the “ Merger Consideration ”) payable to the holder thereof, without interest, in the manner provided in Section 2.9 , less any required withholding Taxes; provided , that it shall be a condition to the receipt by a stockholder of the Company of any Merger Consideration with respect to any share of Common Stock that the certificate representing such share immediately prior to the Effective Time (the “ Certificates ”) shall have first been delivered to the Paying Agent pursuant to Section 2.9(c) , duly endorsed in blank or accompanied by a duly executed stock power. Except as otherwise provided in Section 2.8(b) , all shares of Common Stock outstanding immediately prior to the Effective Time, shall no longer be outstanding upon the Effective Time and shall automatically be cancelled and shall cease to exist, and each such

certificate which immediately prior to the Effective Time represented any shares of Common Stock shall thereafter only represent the right to receive the Merger Consideration therefor.

          (b) Notwithstanding anything in this Agreement to the contrary, shares of Common Stock that are outstanding immediately prior to the Effective Time and that are held by any Person who is entitled to demand and properly demands appraisal of such shares of Common Stock (“ Appraisal Shares ”) pursuant to, and who complies in all respects with, Section 262 of the DGCL (“ Section 262 ”) shall not be converted into the right to receive the Merger Consideration as provided in Section 2.8(a) , but rather the holders of such Appraisal Shares shall be entitled to payment of the fair value of such Appraisal Shares in accordance with Section 262 (and at the Effective Time such Appraisal Shares shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and such holders shall cease to have any right with respect thereto, except the right to receive the fair value of such Appraisal Shares in accordance with Section 262); provided , however , that if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262, then the right of such holder to be paid the fair value of such holder’s Appraisal Shares shall cease and such Appraisal Shares shall be deemed to have been converted as of the Effective Time into, and to have become exchangeable solely for the right to receive, Merger Consideration as provided in Section 2.8(a) . The Company shall give Parent (i) prompt notice of any demands for appraisal received by the Company, withdrawals of such demands, and any other instruments served pursuant to DGCL and received by the Company and (ii) opportunity to direct all negotiations and proceedings with respect to demands for appraisal under DGCL.

          (c) Each share of Common Stock held in the treasury of or reserved for issuance by the Company and each share of Common Stock owned by Parent, Merger Sub or any direct or indirect wholly owned subsidiary of Parent or the Company immediately prior to the Effective Time shall be cancelled and extinguished without any conversion thereof and no portion of the Merger Consideration shall be allocated or paid thereto.

          (d) Each share of the Merger Sub’s common stock, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time shall be converted into one validly issued, fully paid and nonassessable share of the Surviving Corporation’s common stock, par value $0.01 per share.

          (e) The Merger Consideration shall be adjusted to reflect any change in the number of shares of Common Stock issued and outstanding as of the Effective Time by reason of any stock dividend, stock split, recapitalization, combination, exchange of shares, merger, consolidation, reorganization or the like or any other change in the corporate or capital structure; provided , however , that nothing in this Section 2.8(e) shall be construed as permitting the Company to take any action or enter into any transaction otherwise prohibited by this Agreement.

     Section 2.9 Surrender of Shares; Stock Transfer Books .

          (a) Prior to the Effective Time, Parent or Merger Sub will designate a bank, trust company or transfer agent reasonably acceptable to the Company to act as paying agent (the

“ Paying Agent ”) to facilitate the receipt by the Company’s stockholders of the Per Share Amount in connection with the Offer and the Merger Consideration in connection with the Merger.

          (b) At or before the Effective Time, Parent shall cause the Merger Consideration to be delivered (other than any portion thereof allocable to any Appraisal Shares, which shall be withheld by Parent or the Surviving Corporation to satisfy related appraisal or dissenters rights matters and the costs thereof) by wire transfer of immediately available funds to an account designated in writing by the Paying Agent (the “ Payment Account ”). The Paying Agent shall, pursuant to irrevocable instructions, deliver the Merger Consideration contemplated to be paid pursuant to Section 2.8(a) out of the Payment Account. The Payment Account shall be invested by the Paying Agent as directed by Parent; provided , however , that such investments shall be in obligations of or guaranteed by the United States of America or any agency or instrumentality thereof and backed by the full faith and credit of the United States of America, in commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively, or in certificates of deposit, bank repurchase agreements or banker’s acceptances of commercial banks with capital exceeding $1 billion (based on the most recent financial statements of such bank that are then publicly available). Any net profit resulting from, or interest or income produced by, such investments shall be payable to Parent or an affiliate of Parent as Parent directs; provided , however , that any net loss resulting from such investments shall be promptly reimbursed by Parent to the Payment Account upon demand by the Paying Agent. The Payment Account shall not be used for any purpose other than as set forth in this Section 2.9(b) .

          (c) Promptly after the Effective Time, the Surviving Corporation shall cause to be mailed to each holder of record of a Certificate whose shares of Common Stock were converted into the right to receive the Merger Consideration pursuant to Section 2.8(a) and cause to be furnished promptly to any record holder upon request thereby after the Effective Time, a letter of transmittal, which shall (i) specify that delivery of the Certificates shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Paying Agent and (ii) provide instructions for the holders of the Certificates to use in effecting the surrender of the Certificates pursuant to such letter of transmittal. Upon surrender to the Paying Agent of a Certificate, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions contained therein, and along with such other documents as may be required pursuant to such instructions, including those documents set forth in Section 2.8(a) (or, if such shares of Common Stock are held in book-entry or other uncertificated form, upon the entry through a book-entry transfer agent of the surrender of such shares on a book-entry account statement (it being understood that any references herein to “Certificates” shall be deemed to include references to book-entry account statements relating to the ownership of shares of Common Stock)), the holder of such Certificate shall be entitled to receive in exchange therefor the Merger Consideration which such holder has the right to receive in respect of the shares of Common Stock formerly represented by such Certificate, and the Certificate so surrendered shall forthwith be canceled. No interest will be paid or accrued on any Merger Consideration payable to holders of Certificates. In the event of a transfer of ownership of shares of Common Stock which is not registered in the transfer records of the Company, the Merger Consideration may be issued to a transferee if the Certificate representing such shares is presented to the Paying Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid. Until

surrendered as contemplated by this Section 2.9(c) , each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration.

          (d) Each of the Paying Agent, Parent and the Surviving Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Common Stock such amounts as may be required to be deducted or withheld therefrom under the Code or under any provision of state, local or foreign tax Law or under any other applicable Law. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid. As used in this Agreement, “ Code ” means the Internal Revenue Code of 1986, as amended.

     Section 2.10 No Further Ownership Rights in Company Capital Stock . All amounts paid upon the surrender or exchange of shares of Common Stock in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to such shares, and there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be forwarded to the Paying Agent where they shall be cancelled and exchanged as provided in Section 2.9 .

     Section 2.11 Lost, Stolen or Destroyed Certificates . In the event any Certificate shall have been lost, stolen or destroyed, the Paying Agent shall issue in exchange for such lost, stolen or destroyed Certificate, upon the making of an affidavit of that fact by the holder thereof, such amounts as may be required pursuant to Section 2.9 with respect to the number of shares of Common Stock represented by such Certificate; provided , however , that Parent may, in its discretion and as a condition precedent to the payment thereof, require the owner of such lost, stolen or destroyed Certificate to deliver a bond in such sum as Parent may direct as indemnity against any claim that may be made against Parent, the Surviving Corporation or the Paying Agent with respect to the Certificate alleged to have been lost, stolen or destroyed.

     Section 2.12 Termination of Payment Account, Escheat, etc. Any portion of the Payment Account which remains undistributed to the holders of Common Stock for one year after the Effective Time shall be delivered to Parent upon demand, and any holders of certificates formerly representing shares of Common Stock who have not theretofore complied with the exchange procedures set forth above shall thereafter look only to Parent (subject to abandoned property, escheat or similar Laws, as general creditors thereof) for the Merger Consideration, without any interest thereon. None of Parent, the Paying Agent, the Surviving Corporation or any party hereto shall be liable to any Person for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat, or similar Law.

     Section 2.13 Company Equity Plans .

          (a) Except as set forth in Section 2.13(c) and except for any option to purchase Common Stock pursuant to the ESPPs (defined below), each option to purchase Common Stock or stock appreciation right settleable in Common Stock (collectively, the

“ Company Stock Option Awards ”) granted under any equity based compensation plan of the Company (the “ Company Stock Plans ”) that is outstanding under a Company Stock Plan immediately prior to the time that the Company becomes a member of the same “affiliated group,” within the meaning of Section 1504 of the Code, of Parent (such time the “ 80% Threshold Time ”), will vest and be cancelled subject to and immediately following the 80% Threshold Time, and the holder of such Company Stock Option Awards will, in full settlement of such Company Stock Option Awards, receive from or on behalf of Merger Sub an amount (subject to any applicable withholding Tax) in cash equal to the product of (x) the excess, if any, of the Merger Consideration over the exercise price or base price, as applicable, per share of such Company Stock Option Award, multiplied by (y) the total number of shares of Common Stock subject to such Company Stock Option Award (the aggregate amount of such cash hereinafter referred to as the “ Option Award Consideration ”). Merger Sub shall pay or cause to be paid to holders of the Company Stock Option Awards the Option Award Consideration as soon as administratively practicable following the 80% Threshold Time.

          (b) Except as set forth in Section 2.13(c) , each restricted stock unit (including any restricted stock award, phantom restricted stock award, deferred stock unit, whether performance-based, time-based or otherwise) (the “ Company Restricted Stock Units ”) that is outstanding under any Company Stock Plan immediately prior to the 80% Threshold Time, will become vested or earned and be cancelled subject to and immediately following the 80% Threshold Time and converted into the right to receive an amount (subject to any applicable withholding Tax) in cash equal to the product of (x) the Merger Consideration multiplied by (y) the total number of shares of Common Stock subject to such Company Restricted Stock Unit (the aggregate amount of such cash hereinafter referred to as the “ Restricted Stock Unit Consideration ”). Merger Sub shall pay or cause to be paid to holders of the Company Restricted Stock Units the Restricted Stock Unit Consideration as soon as practicable following the 80% Threshold Time; provided , however , outstanding stock award deferrals under the Amended and Restated Perot Systems Corporation 2006 Non-Employee Director Equity Compensation Plan shall be paid at the time(s) specified by the terms of such plan.

          (c) Except as set forth in Section 2.13 of the Company Disclosure Letter, to the extent a holder of a Company Stock Option Award or a Restricted Stock Unit is listed in Section 2.13(c) of the Company Disclosure Letter (a “ Rollover Eligible Employee ”), and enters into a Rollover Restricted Stock Unit Election Form, the form of which is attached as Appendix A to Section 2.13 of the Company Disclosure Letter (the “ Equity Conversion Agreement ”), on or before September 30, 2009 to convert a percentage of his Option Award Consideration or Restricted Stock Unit Consideration into restricted stock unit awards of Parent, rather than receiving the amounts described in Sections 2.13(a) or 2.13(b) , as applicable, the percentage of such Rollover Eligible Employee’s Option Award Consideration and Restricted Stock Unit Consideration elected to be converted in the Equity Conversion Agreement (together, “ Rollover Amount ”) shall be converted into the right to receive a time-based vesting restricted stock unit award agreement settleable in the common stock, $0.01 par value per share, of Parent (“ Parent Stock ” and such award, the “ Parent Restricted Stock Unit ”). The Parent Restricted Stock Unit shall have material terms and conditions substantially the same as those contained in the form of the agreement attached as Appendix B to Section 2.13(c) of the Company Disclosure Letter. The number of Parent Restricted Stock Units to which a Rollover Eligible Employee will be entitled shall be determined by multiplying the Rollover Amount by two and dividing such

amount by the Fair Market Value of a share of Parent Stock. For purposes of this Section 2.13(c) , “Fair Market Value” shall mean the closing trading price of a share of Parent Stock as reported on Nasdaq Global Select Market on the Closing Date. Any Option Award Consideration or Restricted Stock Unit Consideration payable to the Rollover Eligible Employee after the application of the Equity Conversion Agreement shall be payable pursuant to Sections 2.13(a) and 2.13(b) .

          (d) The Company shall take such action as may be necessary to (i) establish the end of the purchase period in effect as of the date hereof under the Company’s 1999 Employee Stock Purchase Plans (“ ESPPs ”) no later than the last day of the offering period ending immediately after the commencement of the Offer with respect to any offering otherwise then in effect (the “ ESPP Exercise Date ”), (ii) suspend any subsequent purchase periods that would otherwise arise after the close of the purchase period currently in effect and prior to the Effective Time and (iii) terminate the ESPPs as of the Effective Time or such earlier date as determined by the Company to be administratively reasonable. Each ESPP participant’s accumulated payroll contributions as of the ESPP Exercise Date that are not withdrawn as of such date shall be applied toward the purchase of shares of Common Stock in accordance with the terms of the ESPPs. As promptly as reasonably practicable following the ESPP Exercise Date, following the application of accumulated payroll contributions toward the purchase of shares of Common Stock in accordance with the preceding sentence, Parent shall cause or permit the Company or the Merger Sub, as applicable, to return to participants any of their respective accumulated payroll contributions not applied to the purchase of shares of Common Stock under the ESPPs, if any.

          (e) At the Effective Time, Parent shall assume the obligations and succeed to the rights of the Company under the Company Stock Plans with respect to the Company Stock Option Awards and the Company Restricted Stock Units (the “ Company Equity Awards ”). Prior to the Effective Time, the Company and Parent shall take all action required to reflect the transactions contemplated by this Section 2.13 to ensure that, following the Effective Time, no Person other than Parent and its Subsidiaries shall have any right (i) to acquire equity securities of the Company or any Subsidiary thereof or (ii) to receive any payment in respect of any equity based compensatory award other than with respect to the payment of the Option Award Consideration and the Restricted Stock Unit Consideration as provided in Sections 2.13(a) and 2.13(b) . From and after the Effective Time, all references to the Company (other than any references relating to a “change in control” of the Company) in each Company Stock Plan and in each agreement evidencing any award of Company Equity Awards shall be deemed to refer to Parent. Nothing in this Section 2.13 is intended to release any employee or service provider to the Company from any provisions relating to any non-competition, non-solicitation, or confidentiality provisions of any Company Equity Award and any associated damages or forfeitures (the “ Equity Award Restrictive Covenants ”), which shall survive the Effective Time. The Company shall take such action as may be necessary to insure the survival of the Equity Award Restrictive Covenants and the succession of Parent to the benefits of the Equity Award Restrictive Covenants.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as set forth in the disclosure letter delivered by the Company to Merger Sub and Parent prior to the execution and delivery of this Agreement (the “ Company Disclosure Letter ”) with respect to specific numbered and lettered sections and subsections of this ARTICLE 3 or for which such disclosure is reasonably apparent as responsive to any other section or subsection of this ARTICLE 3 , the Company hereby represents and warrants to Merger Sub and Parent as follows:

     Section 3.1 Organization and Standing; Subsidiaries . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Each Subsidiary of the Company has been duly organized, and is validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, as the case may be. Section 3.1 of the Company Disclosure Letter contains a complete list of every Subsidiary of the Company and the jurisdiction of each such Subsidiary’s incorporation or organization, as the case may be. The Company and each of its Subsidiaries are duly qualified to conduct business and are in good standing to do business in each jurisdiction where such qualification or good standing is required, except where the failure to be so qualified or to be in good standing would not have a Company Material Adverse Effect. The Company and each of its Subsidiaries have all requisite power and authority and all authorizations, licenses and permits necessary to own, lease and operate their respective properties and other assets, to conduct their respective businesses as presently conducted and as proposed to be conducted, except where the failure to have such power and authority, authorizations, licenses and permits would not have a Company Material Adverse Effect. The copies of the Company’s certificate of incorporation (the “ Certificate of Incorporation ”) and bylaws (the “ Bylaws ”) that are filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (the “ Company Form 10-K ”) are complete and correct copies thereof as in effect on the date hereof. The Company has delivered to Parent true and complete copies of the certificate of incorporation and bylaws (or similar organizational documents) of each Subsidiary of the Company, each as amended to date and currently in effect (the “ Subsidiary Charter Documents ”). The Company is not in material violation of any provision of the Certificate of Incorporation or the Bylaws. No Subsidiary of the Company is in violation of any provision of its Subsidiary Charter Documents, except for violations that would not have a Company Material Adverse Effect. For purposes of this agreement, the term “ Subsidiary ” means, with respect to a Party, any corporation, more than 50% of the outstanding voting securities of which are owned or controlled, directly or indirectly, by such Party or any Subsidiary of such Party, or a partnership, limited liability company, trust, association or other business entity in which such Party or any Subsidiary of such Party is a general partner, manager or trustee or owns or controls, directly or indirectly, interests entitling it to receive more than 50% of the profits or losses of such entity. As used in this Agreement, “ Law ” shall mean any preliminary or permanent foreign or domestic law, statute, code, ordinance, rule, regulation, or Order.

     Section 3.2 Capitalization .

          (a) The authorized capital stock of the Company consists of: (i) 300,000,000 shares of Common Stock; (ii) 24,000,000 shares of Class B Common Stock, par value $0.01 per share (“ Class B Common Stock ”); and (iii) 5,000,000 shares of preferred stock, par value $0.01 per share (“ Preferred Stock ”). As of the close of business on September 17, 2009, (x) 121,322,396 shares of Common Stock were issued (and not held in the treasury of the Company) and outstanding, (y) 4,152,279 shares of Common Stock were issued and held in the treasury of the Company and (z) no shares of Class B Common Stock or Preferred Stock were issued and outstanding or held in the treasury of the Company. Since September 17, 2009 through the date hereof, no shares of Common Stock, shares of Class B Common Stock or shares of Preferred Stock have been issued other than the issuance of shares of Common Stock upon the exercise or settlement of Company Equity Awards. As of the close of business on September 17, 2009, (x) an aggregate of 15,915,046 shares of Common Stock were subject to and reserved for issuance upon (1) exercise of Company Stock Option Awards or (2) lapse of restrictions of Company Restricted Stock Units or director deferred shares granted under the 2001 Long-Term Incentive Plan, the 1996 Non-Employee Director Stock Option/Restricted Stock Plan, and the 2006 Non-Employee Director Equity Compensation Plan, (y) an aggregate of 32,682,156 shares of Common Stock were subject to and reserved for issuance under the 2001 Long-Term Incentive Plan, the 2006 Non-Employee Director Equity Compensation Plan and the 2003 Non-Employee Director Equity Compensation Plan, and (z) an aggregate of 3,921,796 shares of Common Stock were reserved for issuance pursuant to the ESPPs, and since September 17, 2009 and through the date hereof, no Company Equity Awards have been granted, no additional shares of Common Stock have become subject to issuance under the Company Stock Plans. Section 3.2(a) of the Company Disclosure Letter sets forth as of the close of business on September 17, 2009 each outstanding Company Equity Award granted under the Company Stock Plans and (i) the name of the holder of such Company Equity Award, (ii) the number of shares of Common Stock subject to such outstanding Company Equity Award, (iii) the exercise price or base price of such Company Equity Award, (iv) the date on which such Company Equity Award was granted or issued, (v) the applicable vesting schedule, and the extent to which such Company Equity Award is vested and exercisable as of the date hereof, and (vi) with respect to Company Stock Options, the date on which such Company Stock Option expires. All shares of Common Stock subject to issuance under the Company Stock Plans, upon issuance in accordance with the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable.

          (b) All of the issued and outstanding shares of Common Stock have been duly authorized, validly issued and are fully paid and nonassessable and are free and clear of all Encumbrances created by or imposed upon the holders thereof, and are not subject to any preemptive rights or rights of first refusal created by statute, the Certificate of Incorporation or Bylaws or any Contract to which the Company is a party or by which it is bound. Except as set forth in the Certificate of Incorporation, (i) no subscription, warrant, option, conversion, exchange or other right (contingent or otherwise) to purchase or otherwise acquire any shares of capital stock of the Company is authorized or outstanding, (ii) the Company has no obligation, contract or commitment (contingent or otherwise) to issue any subscription, warrant, option, conversion, exchange or other such right or to issue, transfer, deliver, sell or cause to be outstanding, directly or indirectly, any shares of its capital stock or any evidences of

indebtedness of the Company and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend or make any other distribution in respect thereof. All of the issued and outstanding shares of Common Stock and all outstanding subscription, warrant, option, conversion, exchange or other rights to purchase or otherwise acquire such Common Stock, directly or indirectly, have been offered, issued, granted or sold by the Company in compliance with applicable federal and state securities Laws or pursuant to valid exemptions therefrom. No debt securities of the Company are issued and outstanding.

          (c) Each outstanding share of capital stock or other equity interest of each Subsidiary of the Company is duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights and is held, directly or indirectly, by the Company or another Subsidiary of the Company free and clear of all Encumbrances. There are no subscriptions, options, warrants, rights, calls, contracts or other commitments, understandings, restrictions or arrangements relating to the issuance or sale with respect to any shares of capital stock or other ownership interests of any Subsidiary of the Company, including any right of conversion or exchange under any outstanding security, instrument or Contract. No Subsidiary of the Company has any obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein. The Company does not own or control, directly or indirectly, any shares of capital stock of any other corporation or any interest in any partnership, joint venture, limited liability company or similar third party business enterprise or Person (excluding partnerships, joint ventures or similar third party business enterprises that have in the aggregate a book value of not more than $1,000,000 in the aggregate with all such Persons), nor does the Company have the right to acquire, directly or indirectly, any outstanding capital stock of, or other equity interests in, any other entity or Person (excluding capital commitments or other obligations of less than or equal to $1,000,000 to any partnership, joint venture or similar third party business enterprise). No Subsidiary of the Company owns any capital stock of the Company.

     Section 3.3 Authorization . The execution, delivery and performance by the Company of this Agreement, the Tender Agreements, the Employment Agreements, the Retention Agreements, the Non-Competition Agreements, the Amended License Agreement and all other agreements contemplated hereby and thereby to be executed by the Company in connection with the transactions contemplated by this Agreement, and the consummation by the Company of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate action (other than, in the case of the Merger, (a) the adoption of this Agreement by the holders of at least 66 ² / ₃ % of the total outstanding shares of Common Stock (the “ Company Stockholder Approval ”) (if required under the DGCL) and (b) the filing with the Secretary of State of the State of Delaware the Certificate of Merger as required by the DGCL). This Agreement, the Tender Agreements, the Employment Agreements, the Retention Agreements, the Non-Competition Agreements, the Amended License Agreement and each other agreement contemplated hereby and thereby to be executed by the Company in connection with the transactions contemplated by this Agreement have been duly and validly executed and delivered by the Company and constitute legal, valid and binding obligations of the Company enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization and other Laws relating to creditors’ rights and to general principles of equity. The Board of Directors, at a duly called and held meeting, has unanimously (by all

directors present) adopted the Board Actions. In the event that Section 253 of the DGCL is inapplicable and unavailable to effectuate the Merger, the only vote of the stockholders required to adopt this Agreement and approve the transactions contemplated hereby is the Company Stockholder Approval.

     Section 3.4 Non-Contravention; Governmental Authorities and Consents .

          (a) The execution, delivery and performance by the Company of this Agreement, the Tender Agreements, the Employment Agreements, the Retention Agreements, the Non-Competition Agreements, the Amended License Agreement and the other agreements contemplated hereby and thereby to be executed by the Company in connection with the transactions contemplated by this Agreement, and the consummation of the transactions contemplated hereby and thereby, will not violate any provision of Law (subject to compliance with the requirements set forth in clauses (i) through (iii) of Section 3.4(b) and, in the case of the consummation of the Merger, obtaining the Company Stockholder Approval (if required under the DGCL)) and will not violate or conflict with, result in the breach of any of the terms, conditions or provisions of, constitute a default under, create in any party the right to terminate, enforce or modify, accelerate payment or create or impose a lien pursuant to, or require a filing, consent or waiver under, (i) the Certificate of Incorporation or Bylaws or any Subsidiary Charter Documents (each as amended to date), (ii) any written or oral contract, subcontract, understanding, bond, option, warranty, purchase order, sublicense, insurance policy, mortgage, indenture, lease, license, note, agreement, right of Intellectual Property or other legally binding instrument or arrangement to which the Company or any of its Subsidiaries is a party or by which it or any of their respective properties or assets is bound (each, a “ Contract ”) or (iii) any permit, decree, judgment, Order, injunction, statute, rule, regulation or other restriction applicable to the Company, any of its Subsidiaries or their respective properties, in the case of clauses (ii) and (iii) other than any such violation, conflict, breach, default or right to terminate, enforce, modify, accelerate payment or create or impose a lien, or requirement of a filing, consent or waiver that would not have a Company Material Adverse Effect. As used in this Agreement, “ Order ” shall mean any order, judgment, writ, stipulation, award, injunction, decree, arbitration award or finding of any Governmental Authority, arbitrator or mediator.

          (b) No consent, approval, Order, or authorization of, or registration, qualification, designation, declaration, or filing with, any Governmental Authority is required on the part of the Company or any of its Subsidiaries in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except for (i) applicable requirements of the Securities Exchange Act of 1934 (the “ Exchange Act ”) (including the filing of the Schedule 14D-9 in connection with the Offer and the Proxy Statement, if applicable, in connection with the Company Stockholder Approval), applicable requirements of Antitrust Laws, competition or merger control consents, and state securities, takeover and “blue sky” Laws, (ii) the applicable requirements of the NYSE, (iii) the filing with the Secretary of State of the State of Delaware of the Certificate of Merger as required by the DGCL and (iv) where the failure to obtain such consents, approvals, Orders, authorizations, registrations, qualifications, designations, declarations or to make such filings would not have a Company Material Adverse Effect. As used in this Agreement, “ Antitrust Laws ” means (i) the Sherman Act of 1890, as amended, (ii) the Clayton Antitrust Act of 1914, as amended, (iii) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), (iv) any

applicable requirements of Council Regulation (EC) No. 139/2004 of the Council of the European Union or (v) any other Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or significant impediments or lessening of competition or creation or strengthening of a dominant position through merger or acquisition and any other Law requiring parties to submit a filing to a Governmental Authority and observe a waiting period under any of the foregoing Laws. As used in this Agreement, “ Governmental Authority ” means any governmental or quasi-governmental body of the United States, or any other country, including any state, province, county, city or other political subdivision thereof, or any authority, agency, court, instrumentality or statutory or regulatory body of any of the foregoing.

     Section 3.5 Compliance .

          (a) The Company and each of its Subsidiaries is and, since January 1, 2009, has been in compliance with all Laws or Orders applicable to the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries or any of their respective businesses or properties is bound, except for such non-compliance that would not have a Company Material Adverse Effect. To the Company’s knowledge, no Governmental Authority has issued any notice or notification stating that the Company or any of its Subsidiaries is not in compliance with any Law, except where such non-compliance would not have a Company Material Adverse Effect.

          (b) The Company and each of its Subsidiaries has not, since January 1, 2004, violated any applicable U.S. Export and Import Laws, or made a voluntary disclosure with respect to any violation of such Laws, except, in either case, as would not have a Company Material Adverse Effect. Except as would not have a Company Material Adverse Effect, the Company and each of its Subsidiaries has been and is in compliance with all applicable Foreign Export and Import Laws since January 1, 2004. Except as would not have a Company Material Adverse Effect, and to the extent applicable, the Company and each of its Subsidiaries has prepared and applied for all import and export licenses required in accordance with U.S. Export and Import Laws and Foreign Export and Import Laws for the conduct of its business. Except as would not have a Company Material Adverse Effect, (i) the Company and each of its Subsidiaries has at all times been in compliance with all applicable Laws relating to trade embargoes and sanctions and (ii) no product, service or financing provided by it has been, directly or indirectly, provided to, sold to or performed for or on behalf of Cuba, Iran, Libya, North Korea, Sudan, Syria, or any other country or Person against whom the United States maintains economic sanctions or an arms embargo unless authorized by license or by Law. As used in this Agreement, (i) “ Foreign Export and Import Laws ” means the Laws and regulations of a foreign government regulating exports, imports or re-exports to or from the foreign country, including the export or re-export of any goods, services or technical data and (ii) “ U.S. Export and Import Laws ” means the Arms Export Control Act (22 U.S.C. 2778), the International Traffic in Arms Regulations (ITAR) (22 CFR 120-130), the Export Administration Act of 1979, as amended (50 U.S.C. 2401-2420), the Export Administration Regulations (EAR) (15 CFR 730-774), the Foreign Assets Control Regulations (31 CFR Parts 500-598), the Laws and regulations administered by Customs and Border Protection (19 CFR Parts 1-199) and all other Laws of the United States and regulations regulating exports, imports or re-exports to or from the

United States, including the export or re-export of goods, services or technical data from the United States.

          (c) There is no export or import related Proceeding pending, or to the knowledge of the Company, threatened against either the Company or any of its Subsidiaries or any of their respective officers or directors (in their capacity as an officer or director) by or before (or, in the case of a threatened matter, that would come before) any Governmental Authority, except as would not have a Company Material Adverse Effect.

     Section 3.6 Litigation . Except for matters that would not have a Company Material Adverse Effect, as of the date of this Agreement there is no action, suit, mediation, arbitration, claim, charge, grievance, complaint or proceeding, or any governmental action, proceeding, inquiry or investigation (collectively, “ Proceeding ”) pending or, to the knowledge of the Company, threatened, against the Company, any Subsidiary of the Company, or any of its or their respective properties or assets in or before any Governmental Authority or before any mediator or arbitrator. As of the date of this Agreement, the Company is not subject to or bound by any Order that would obligate the Company to pay in excess of $5,000,000. As used in this Agreement, the term “ Company Material Adverse Effect ” means any circumstance, event, change or effect (whether or not foreseeable as of the date of this Agreement) that, individually or in the aggregate with all other circumstances, events, changes and effects, (a) is, or would reasonably be expected to be, materially adverse to the assets, business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole (whether or not such circumstance, event, change or effect has, during the period or at any time in question, manifested itself in the historical financial statements of the Company), or (b) would prevent or materially impair the ability of the Company to perform its obligations under this Agreement or consummate the transactions contemplated hereby; provided , however , that, for the purposes of clause (a) , no event, change or effect to the extent arising out of, resulting from or attributable to the following shall be deemed to constitute a Company Material Adverse Effect or shall be taken into account when determining whether a Company Material Adverse Effect has occurred or is reasonably expected to occur: (i) general industry, economic, market or political conditions; (ii) acts of war, sabotage or terrorism; (iii) the announcement or pendency of the transactions contemplated by this Agreement; (iv) any failure, in and of itself, by the Company to meet any internal or published projections, predictions, estimates or expectations (whether such projections, predictions, estimates or expectations were made by the Company or independent third parties) for any period ending on or after the date of this Agreement; (v) any changes in GAAP, applicable Law or the interpretation thereof; (vi) the taking of any specific action at the express written direction of Parent; or (vii) a decline in the market price, or a change in the trading volume, of the shares of Common Stock (it being understood that any cause of any such decline or change may be taken into consideration when determining whether a Company Material Adverse Effect has occurred or is reasonably expected to occur); provided , further , however , that any circumstance, event, change and effect referred to in clauses (i) , (ii) or (v) immediately above shall be taken into account in determining whether a Company Material Adverse Effect has occurred or is reasonably expected to occur to the extent (but only to the extent) that such event, change or effect has a disproportionate effect on the Company and its Subsidiaries, taken as a whole, compared to other participants in the industries in which the Company and its Subsidiaries conduct their businesses.

     Section 3.7 SEC Filings; Company Financial Statements .

          (a) The Company has filed or furnished each form, report, statement, schedule, document, certification, registration statement, prospectus and definitive proxy statement (including all exhibits, amendments and supplements thereto and all information incorporated by reference) required to be filed or furnished by the Company with the SEC under the Securities Act or the Exchange Act (the “ Company SEC Filings ”) since January 1, 2007. The Company SEC Filings (i) were prepared in accordance and complied as to form in all material respects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be and (iii) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing) 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 light of the circumstances under which they were made, not misleading. As of the date of this Agreement, there is no Proceeding pending or, to the knowledge of the Company, threatened, against the Company or any Subsidiary of the Company at or before the SEC. The Company has made available to Parent copies of all comment letters received from the SEC since January 1, 2007 and relating to the Company SEC Filings, together with all written responses of the Company thereto provided or made available to the SEC, in each case to the extent such comment letters and responses are not available on the SEC’s EDGAR database. As of the date of this Agreement, the Company has not received any notice from the SEC that any Company SEC Filing is the subject of any ongoing review by the SEC. No Subsidiary of the Company is required to file or furnish any reports or other documents with the SEC.

          (b) Each set of consolidated financial statements (including, in each case, any related notes thereto) contained in the Company SEC Filings (including each of the Company SEC Filings filed or furnished after the date hereof until the Acceptance Date) (the “ Company Financial Statements ”): (i) complied (and will comply) as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto in effect at the time of such filing; (ii) was prepared (and will be prepared) in accordance with United States generally accepted accounting principles (“ GAAP ”) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, may not contain footnotes or as otherwise permitted by the rules and regulations of the SEC) and (iii) fairly presented (and will fairly present) in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries at the respective dates thereof and the consolidated results of the Company’s and its Subsidiaries’ operations and cash flows for the periods indicated, subject, in the case of unaudited interim financial statements, to normal year-end adjustments. Except as reflected in the Company Financial Statements or as otherwise disclosed in the Company SEC Filings, neither the Company nor any of its Subsidiaries is a party to any material off-balance sheet arrangement (as defined in Item 303 of Regulation S-K promulgated under the Securities Act (“ Regulation S-K ”)). The Company has not had any dispute with any of its auditors regarding accounting matters or policies requiring public reporting, a report to the audit committee or which is otherwise material.

          (c) The Company has established and maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) or 15d-15(e) promulgated under the

Exchange Act); such disclosure controls and procedures are reasonably designed to ensure that all information (both financial and non-financial) relating to the Company and its Subsidiaries required to be disclosed in the Company’s reports required to be filed with or submitted to the SEC pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the principal executive officer and principal financial officer of the Company required under the Exchange Act with respect to such reports.

          (d) The Company maintains a system of “internal control over financial reporting” (as defined in Rules 13a-15(f) and 15(d)-15(f) of the Exchange Act) as required under Rules 13a-15(a) and 15d-15(a) under the Exchange Act, and such system is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements in accordance with GAAP and that transactions of the Company are being made only in accordance with authorizations of management and the Board of Directors.

          (e) Each of the “principal executive officer” of the Company (as defined in the Sarbanes-Oxley Act of 2002 (“ SOX ”)) and the “principal financial officer” of the Company (as defined in SOX) has made all certifications required by Sections 302 and 906 of SOX and any related rules and regulations promulgated by the SEC and the NYSE and the rules and regulations promulgated thereunder with respect to the Company SEC Filings and the statements contained in any such certifications were true and accurate as of the date such certifications were made and have not been modified or withdrawn. Neither the Company nor any of its executive officers has received notice from any Governmental Authority challenging or questioning the accuracy, completeness, form or manner of filing of the certifications required by SOX and made by its principal executive officer and principal financial officer.

          (f) To the knowledge of the Company, there is no fraud, whether or not material, that involves any of the senior financial officers of the Company.

          (g) The Company is in material compliance with all applicable provisions of SOX and the applicable listing and governance rules of the NYSE.

          (h) To the knowledge of the Company, PricewaterhouseCoopers LLP, which has expressed its opinion with respect to the Company Financial Statements, is “independent” (under applicable rules then in effect) with respect to the Company and each Subsidiary of the Company within the meaning of Regulation S-X since the appointment of PricewaterhouseCoopers LLP in that capacity. As of the date hereof, the Company has not received any notice from the NYSE asserting any non-compliance with such rules and regulations.

     Section 3.8 No Undisclosed Liabilities . None of the Company or any Subsidiary of the Company has any undisclosed liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) that would be required to be reflected on a balance sheet or in notes thereto prepared in accordance with GAAP, except for liabilities or obligations (a) disclosed in the Company Financial Statements (including any related notes), (b) incurred in

the ordinary course of business and consistent with practices since the date of the Latest Balance Sheet, (c) incurred or arising under this Agreement or in connection with the transactions contemplated hereby and (d) that are not material in the aggregate to the Company and its Subsidiaries, taken as a whole. For purposes of this Agreement, “ Latest Balance Sheet ” means the consolidated balance sheet of the Company and its Subsidiaries as of December 31, 2008, which is included in the Company Form 10-K.

     Section 3.9 Certain Costs . Neither the Company nor any of its Subsidiaries is party to any customer Contract as to which the estimated future cost through the expected completion date of the customer Contract, whether incurred or yet to be incurred (including all costs generally accounted for at the account level for such customer Contract, but not including any general corporate overhead costs or technology investments not accounted for at the account level), as of August 31, 2009 exceeded by more than $4,000,000 (or the equivalent thereof in the applicable foreign currency) in the aggregate the future contract revenue expected as of such date to be recorded under such customer Contract through the expected completion of the customer Contract, in each case based on management’s estimates of reasonably likely contract performance.

     Section 3.10 Absence of Certain Changes or Events . Since the date of the Latest Balance Sheet until the date of this Agreement, there has not been, occurred or arisen: (a) a Company Material Adverse Effect or any circumstance, event, change, effect or condition of any character that is reasonably expected to have a Company Material Adverse Effect; (b) any making, declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of the Company’s or any Subsidiary of the Company’s capital stock, or any purchase, redemption or other acquisition by the Company or any of its Subsidiaries of the Company’s capital stock or any other securities of the Company or any Subsidiary of the Company, except for (i) the making, declaration, setting aside or payment of cash dividends by any wholly owned Subsidiary of the Company to its parent, or (ii) the acquisition of shares of Common Stock by the Company in satisfaction by holders of any options or rights granted under the Company Stock Plans or the applicable exercise price or withholding taxes; (c) any split, combination or reclassification of any of the Company’s or any Subsidiary of the Company’s capital stock; (d) any granting by the Company or any Subsidiary of the Company of any material increase in compensation or fringe benefits to any employee or director (except for increases in the ordinary course of business consistent with past practice), or any payment by the Company or any Subsidiary of the Company of any material bonus (except for bonuses made in the ordinary course of business consistent with past practice), or any entry by the Company or any Subsidiary of the Company into any contract (or amendment of an existing contract) to grant or provide severance, acceleration of vesting, termination pay or other similar benefits, except in the ordinary course of business consistent with past practice; (e) any change by the Company in its accounting methods, principles or practices (including any change in depreciation or amortization policies or rates or revenue recognition policies), except as required by concurrent changes in GAAP or by the SEC; (f) any revaluation by the Company or any Subsidiary of the Company of any of their respective assets, including writing off notes or accounts receivable or any sale of assets of the Company or any Subsidiary of the Company other than in the ordinary course of business consistent with past practice or less than $10,000,000; (g) entry by the Company or any Subsidiary of the Company into any material licensing or other material Contract with regard to the acquisition or disposition by the Company

or any Subsidiary of the Company of any material Intellectual Property other than non-exclusive licenses or other Contracts with regard to the acquisition or disposition by the Company or any Subsidiary of the Company of any Intellectual Property, in each case entered into in the ordinary course of business consistent with past practice; (h) any change by the Company or any Subsidiary of the Company in its material Tax elections or Tax accounting methods, or any closing agreement, settlement or compromise of any claim or assessment, in each case in respect of material Taxes, or consent to any extension or waiver of any statute of limitation period with respect to any claim or assessment for material Taxes; (i) any notice from the NYSE with respect to any potential delisting of shares of Common Stock; (j) any sale, transfer or other disposition outside of the ordinary course of business of any material property or material assets (whether real, personal or mixed, tangible or intangible) by the Company or any of its Subsidiaries; and (k) any commitment or agreement described in the preceding clauses (a) through (j) . Since the date of the Latest Balance Sheet, except as contemplated by this Agreement, the Company and each of its Subsidiaries have conducted its respective business in the ordinary course of business as consistent with past practices. As used in this Agreement, the term “ Encumbrance ” means, with respect to any asset of the Company or any Subsidiary of the Company, any mortgage, deed of trust, lien, pledge, charge, security interest, title retention device, conditional sale or other security arrangement, collateral assignment, claim, charge, adverse claim of title, ownership or right to use, restriction or other encumbrance of any kind in respect of such asset (including any restriction on (a) the voting of any security or the transfer of any security or other asset, (b) the receipt of any income derived from any asset, (c) the use of any asset and (d) the possession, exercise or transfer of any other attribute of ownership of any asset), in each case except for such restrictions of general application under the Securities Act and applicable “blue sky” Laws. The terms “ encumber ” and “ encumbering ” (whether or not capitalized) have meanings correlative to the foregoing.

     Section 3.11 Taxes .

          (a) (i) All material Tax Returns which were required to be filed by or with respect to the Company and each Subsidiary of the Company have been duly and timely filed, (ii) all such Tax Returns as so filed disclose all material Taxes required to be paid for the periods covered thereby, (iii) all material Taxes owed by the Company and each Subsidiary of the Company which are or have become due have been paid in full, (iv) all Tax withholding and deposit requirements imposed on or with respect to the Company and each Subsidiary of the Company have been satisfied in full in all material respects, and (v) there are no material Encumbrances on any of the assets of the Company or any Subsidiary of the Company that arose in connection with any failure (or alleged failure) to pay any Tax.

          (b) There is no written, or to the knowledge of the Company, unwritten claim against the Company or any Subsidiary of the Company for any material Taxes, and no assessment, deficiency or adjustment that would result in a material amount of Tax being due has been asserted, proposed, or threatened, in each case in writing, with respect to any Tax Return of or with respect to the Company or any Subsidiary of the Company. No material Tax audits or administrative or judicial proceedings are being conducted, pending or threatened in writing with respect to the Company. No claim has been made in writing during the past six years by an authority in a jurisdiction where the Company or a Subsidiary of the Company, as the case may be, does not file Tax Returns that it is or may be subject to taxation in that jurisdiction.

          (c) There is not in force any waiver or agreement for any extension of time for the assessment or payment of any material Tax of or with respect to the Company or any Subsidiary of the Company.

          (d) Neither the Company nor any Subsidiary of the Company is a party to, bound by, or otherwise affected by any agreements or arrangements the subject matter of which relates to allocation, sharing or indemnities in respect of Taxes. No material amounts of payments are due or will become due by the Company or any Subsidiary of the Company pursuant to any such agreement or arrangement.

          (e) Neither the Company nor any Subsidiary of the Company will be required to include any material item of income in, or exclude any material 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” as described in Code Section 7121 (or any corresponding or similar provision of state, local or foreign Income Tax Law) executed on or prior to the Closing Date; (iii) intercompany transaction or any excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision of state, local or foreign Income Tax Law) entered into or created on or prior to the Closing Date; (iv) installment sale or open transaction disposition made on or prior to the Closing Date; (v) cash method of accounting or long-term contract method of accounting utilized prior to the Closing Date; or (vi) prepaid amount received on or prior to the Closing Date.

          (f) Neither the Company nor any Subsidiary of the Company has any liability for any material Taxes of any Person (other than the Company and its Subsidiaries) for which the statute of limitations has not yet expired under Treasury Regulations Section 1.1502-6 (or any corresponding provisions of state, local or foreign Tax Law), or as a transferee or successor.

          (g) Neither the Company nor any Subsidiary of the Company has participated (within the meaning of Treasury Regulations § 1.6011-4(c)(3)) in any “reportable transaction” within the meaning of Treasury Regulations § 1.6011-4(b)(1)-(4) (and all predecessor regulations). The Company has disclosed on its Tax Returns all positions taken therein that could give rise to a substantial understatement of Tax within the meaning of Section 6662 of the Code (or any similar provision of state, local or foreign Law).

          (h) The accruals and reserves for Taxes reflected in the Company Financial Statements filed prior to the date hereof are adequate to cover all material Taxes accruable through such date in accordance with GAAP. Since the date of the Company Financial Statements filed prior to the date hereof, neither the Company nor any Subsidiary of the Company has incurred any material liability for Taxes arising from extraordinary gains or losses, as that term is used in GAAP, outside the ordinary course of business consistent with past custom and practice, and the reserve set forth on the Company Financial Statements, as adjusted for the passage of time through the Effective Time in accordance with the past custom and practice of the Company and its Subsidiaries, is adequate to cover all material Taxes accruable through the Effective Time in accordance with GAAP, excluding in each case any Taxes arising from the transactions described in this Agreement.

          (i) Neither the Company nor any Subsidiary of the Company has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code (i) in the two years prior to the date of this Agreement or (ii) 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 transactions contemplated by this Agreement.

          (j) The Company is not a “United States Real Property Holding Corporation” within the meaning of Section 897(c)(2) of the Code, nor has it been a “United States Real Property Holding Corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

          (k) The Company and each of its Subsidiaries are in compliance with all terms and conditions of any material Tax exemption, Tax holiday or other Tax reduction agreement or order of any taxing authority.

          (l) None of the Company or any Subsidiary of the Company is a party to any gain recognition agreement under Section 367 of the Code and the Treasury Regulations thereunder. No Subsidiary of the Company is a “surrogate foreign corporation” within the meaning of Section 7874 of the Code.

          (m) For purposes of this Agreement (i) “ IRS ” means the United States Internal Revenue Service, (ii) “ Person ” means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization or other entity, (iii) “ Tax ” or “ Taxes ” means any taxes, assessments, fees and other governmental charges imposed by any Governmental Authority, including, without limitation, income, profits, gross receipts, net proceeds, alternative or add-on minimum, ad valorem, value added, turnover, sales, use, property, personal property (tangible and intangible), environmental, stamp, leasing, lease, user, excise, duty, franchise, capital stock, transfer, registration, license, withholding, social security (or similar), unemployment, disability, payroll, employment, fuel, excess profits, occupational, premium, windfall profit, severance, estimated, or similar charge of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, (iv) “ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, and (v) “ Taxing Authority ” means, with respect to any Tax, the Governmental Authority or political subdivision thereof that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such entity or subdivision, including any Governmental Authority or quasi-Governmental Authority or agency that imposes, or is charged with collecting, social security or similar charges or premiums.

     Section 3.12 Title to Property and Assets . Except (a) with respect to matters related to Intellectual Property (which are addressed in Section 3.13 ) and real property (which are addressed in Section 3.21 ) and (b) as would not have a Company Material Adverse Effect, the Company and each Subsidiary of the Company has good, valid and marketable title to, or a valid leasehold interest in, all of the material properties and assets owned or leased by them, in each case, free and clear of all Encumbrances other than (i) liens for Taxes not yet due and payable or liens for Taxes being contested in good faith by any appropriate proceedings for which adequate

reserves have been established, (ii) such imperfections of title or liens as do not and will not materially detract from or interfere with the use of the properties subject thereto or affected thereby, (iii) liens securing debt reflected in the Company Financial Statements, (iv) liens of landlords and mechanic’s, workman’s, carrier’s, warehousemen’s, materialmen’s, repairman’s or other like liens arising in the ordinary course of business, (v) statutory liens claimed or held by any Governmental Authority that are related to obligations that are not due or delinquent, (vi) liens on leases of real property arising from the provisions of such leases, including any agreements and/or conditions imposed on the issuance of land use permits, zoning, business licenses, use permits or other entitlements of various types issued by any Governmental Authority, necessary or beneficial to the continued use and occupancy of such leased real property or the continuation of the business conducted by the Company or its Subsidiaries; provided , that the foregoing do not adversely affect the existing use or value of the leased real property, (vii) pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, (viii) liens incurred in connection with the performance of Contracts (other than for borrowed money), leases, statutory obligations and other obligations of a like nature incurred in the ordinary course of business, and (ix) any other liens or imperfections that are not material in amount, do not materially interfere with, and are not materially violated by, the consummation of the Offer, the Merger and the other transactions contemplated by this Agreement, and do not impair the marketability of, or materially detract from the value of or materially impair the existing use of, the property affected by such lien or imperfection ( clauses (i) - (ix) collectively referred to as “ Permitted Encumbrances ”).

     Section 3.13 Intellectual Property .

          (a) Section 3.13(a) of the Company Disclosure Letter sets forth a true and complete list, as of the date hereof, of the following Intellectual Property of the Company or any Subsidiary of the Company: (i) all patents and patent applications; (ii) all registered and material unregistered trademarks, tradenames, service marks, logos, and domain names; (iii) all registered copyrights; (iv) all material unregistered copyrights; and (v) all Internet domain names; in each case listing the name of the current owner and showing the jurisdictions in which each such Intellectual Property right has been issued or registered and the application or registration number. The foregoing items of Intellectual Property are hereafter referred to as “ Owned Registered Intellectual Property .” All items of Owned Registered Intellectual Property are valid and subsisting and all other Intellectual Property of the Company or any Subsidiary of the Company is valid, except where the failure to be so valid and subsisting would not have a Company Material Adverse Effect. The correct chain of title has been recorded with the applicable governmental office (including the United States Patent and Trademark Office) against each such item of Owned Registered Intellectual Property, except where the failure to so record would not have a Company Material Adverse Effect. All maintenance and prosecution payments currently due or required to be filed (extensions or grace periods not being available) to maintain each item of material Owned Registered Intellectual Property has been made by the Company or a Subsidiary of the Company.

          (b) As used in this Agreement, “ Intellectual Property ” will mean any or all of the following and all rights in, arising out of or associated therewith: (i) all United States, international and foreign patents and applications therefor and all reissues, reexaminations,

divisions, renewals, extensions, provisionals, continuations and continuations in part thereof; (ii) all inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data, business methods and customer lists and other data pertaining to customers and all documentation relating to any of the foregoing; (iii) all copyrights, copyright registrations and applications therefor and all other rights corresponding thereto throughout the world; (iv) all industrial designs and methods and any registrations and applications therefor throughout the world; (v) all tradenames, trademarks, service marks, trade dress, logos, URLs (including domain names), and other indicia of source, sponsorship, affiliation, or approval and the goodwill associated therewith, including any registrations and applications therefor throughout the world; (vi) all rights of publicity and privacy; (vii) all moral and economic rights of authors and inventors, however denominated, throughout the world; (viii) all software, including data files, source code, object code, application programming interfaces, architecture, documentation, files, records, schematics, verilog files, netlists, emulation and simulation reports, test vectors and hardware development tools, computerized databases and other software-related specifications and documentation (“ Software ”); and (ix) any similar or equivalent rights to any of the foregoing anywhere in the world including licenses providing any of the above intellectual property to the Company or any Subsidiary of the Company.

          (c) Section 3.13(c) of the Company Disclosure Letter sets forth a true and complete list, as of the date hereof, of the following (collectively, “ Company IP Agreements ”): (i) all licenses, sublicenses and other Contracts to which the Company or any Subsidiary of the Company is a party and pursuant to which any Person is authorized to use any Intellectual Property of the Company that is material to the Company or its Subsidiaries, other than off-the-shelf shrinkwrap, clickwrap or similar commercially available non-custom Software, (ii) all licenses, sublicenses and other Contracts to which the Company or any Subsidiary of the Company is a party and pursuant to which the Company or any Subsidiary of the Company is authorized to use any third party Intellectual Property that is material to the Company or its Subsidiaries, other than off-the-shelf shrinkwrap, clickwrap or similar commercially available non-custom Software (collectively, “ Third Party Intellectual Property Rights ”), that are incorporated in, are or form a part of any product or service offering of the Company or any Subsidiary of the Company, including products or service offerings and marketing or sales plans that are currently under development, (iii) all open source, public source or freeware Intellectual Property or any modification or derivative thereof from the public domain known by the Company to be embedded in Intellectual Property of the Company or any Subsidiary of the Company and (iv) all Proceedings involving the Company or any Subsidiary of the Company relating to any Intellectual Property before any court, tribunal, or equivalent authority anywhere in the world; provided , however , that prosecution related activities shall be excluded. Neither the Company nor any of its Subsidiaries has granted any rights exclusively under any Intellectual Property of the Company that are necessary for the conduct of the business of the Company as currently conducted, or for the conduct of the business of its Subsidiaries as currently conducted, except as would not have a Company Material Adverse Effect.

          (d) The Company or a Subsidiary of the Company owns, is licensed or otherwise possesses rights to use or exploit all Intellectual Property necessary to conduct the business of the Company and each Subsidiary of the Company as presently conducted, except as would not have a Company Material Adverse Effect. The Company and each of the Subsidiaries

of the Company has not licensed rights to, transferred ownership to or entered into joint ownership regarding any of its Intellectual Property necessary for the conduct of the business of the Company, or for the conduct of the business of its Subsidiaries, except as would not have a Company Material Adverse Effect. All Intellectual Property of the Company and each Subsidiary of the Company, including the Owned Registered Intellectual Property, is free and clear of all Encumbrances, other than Permitted Encumbrances, except as would not have a Company Material Adverse Effect.

          (e) To the Company’s knowledge, there is no, and there never has been any, unauthorized use, disclosure, infringement or misappropriation, or other violation, or any written allegation made thereof, of any Intellectual Property rights of the Company or any Subsidiary of the Company by any Person, including any employee or former employee of the Company or any Subsidiary of the Company, except as would not have a Company Material Adverse Effect. The Company and each Subsidiary of the Company has not entered into any Contract or other arrangement with any Person to limit the use or exploitation of the Intellectual Property of the Company or any Subsidiary of the Company, except as would not have a Company Material Adverse Effect.

          (f) Neither the Compa