ASSET PURCHASE AGREEMENT

EXHIBIT 2.1

ASSET PURCHASE AGREEMENT

by and among

TALEO CORPORATION

as Buyer,

JOBFLASH, INC.

as Seller,

and with respect to Articles X, XI and XII,

U.S. BANK NATIONAL ASSOCIATION

as Escrow Agent

Dated as of March 2, 2007

TABLE OF CONTENTS

TABLE OF CONTENTS
(Continued)

TABLE OF CONTENTS
(Continued)

TABLE OF CONTENTS
(Continued)

ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”) is made and entered into as of March 2, 2007 by and among Taleo Corporation, a Delaware corporation (“ Buyer ”), JobFlash, Inc., a Delaware corporation (“ Seller ”), and with respect to Articles X, XI and XII, U.S. Bank National Association as Escrow Agent.

RECITALS

     WHEREAS, Seller is, among other things, engaged in the business of providing talent management and human resource solutions (such business and operations as presently conducted by Seller being referred to herein as the “ Business ”).

     WHEREAS, the Business is comprised of certain assets and liabilities currently owned or used by Seller.

     WHEREAS, Seller desires to sell, transfer, and assign to Buyer, and Buyer desires to purchase from Seller, the Purchased Assets (as hereinafter defined), and Buyer is willing to assume, the Assumed Liabilities (as hereinafter defined), in each case as more fully described and upon the terms and subject to the conditions set forth herein (the “ Asset Acquisition ”).

     WHEREAS, a portion of the consideration otherwise payable by Buyer in connection with the Asset Acquisition shall be deposited by Buyer into an escrow account as security for the indemnification obligations set forth in this Agreement.

     WHEREAS, concurrent with the execution and delivery of this Agreement, as a condition and further inducement to Buyer to enter into this Agreement, (i) the Identified Employees (as hereinafter defined) are entering into offer letters in substantially the form attached hereto as Exhibit A (collectively, the “ Offer Letters ”), and (ii) Buyer and Seller are entering into a Transition Services Agreement in the form attached hereto as Exhibit B (the “ Transition Services Agreement ”).

     NOW, THEREFORE, in consideration of the covenants, representations, warranties and mutual agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

     1.1 Capitalized Terms . The following capitalized terms shall have the meanings set forth below:

          (a) “ Actions or Proceedings ” shall have the meaning set forth in Section 3.4(d) .

          (b) “ Assumed Liabilities ” shall have the meaning set forth in Section 2.2(a) .

          (c) “ Affiliate ” shall mean, as to any specified Person, any other Person that controls, is controlled by or is under common control with such specified Person, but only so long as such control exists. For purposes of this definition, “ control ” (including the terms “ controlling ,” “ controlled by ” and “ under common control with ”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such specified Person, whether through ownership of voting securities or other interest, by contract or otherwise.

          (d) “ Books and Records ” shall mean all materials, papers and records (in paper or electronic format) in Seller’s care, custody, or control and employed by Seller and used in, or relating to, the Business (including the purchasing, sales and return materials, authorization records, customer and vendor lists, accounting and financial records, product documentation, product specifications, marketing requirement documents, end user documentation, packaging materials, brochures, user manuals, graphics, artwork and software release orders.

          (e) “ Business ” shall have the meaning set forth in the Recitals hereto.

          (f) “ Closing ” shall have the meaning set forth in Section 3.1 .

          (g) “ Closing Consideration ” shall mean the Purchase Price, less (i) the Maveron Payoff Amount, (ii) the Mosaic Payoff Amount, (iii) the Square 1 Payoff Amount, and (iv) the Escrow Amount.

          (h) “ Closing Date ” shall have the meaning set forth in Section 3.1 .

          (i) “ Code ” shall mean the Internal Revenue Code of 1986, as amended.

          (j) “ Employee ” shall mean any current, former or retired employee, consultant or director of Seller or any ERISA Affiliate who has provided services to the Business.

          (k) “ Employee Plan ” shall mean any plan, program, policy, practice, contract, agreement or other material arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind, whether written, unwritten or otherwise, funded or unfunded, including, without limitation, each “employee benefit plan,” within the meaning of Section 3(3) of ERISA, which is or has been maintained, contributed to, or required to be contributed to, by Seller for the benefit of any Employee, or with respect to which Seller or any ERISA Affiliate has or may have any liability or obligation to any Employee.

          (l) “ Employment Agreement ” shall mean each management, employment, severance, consulting, relocation, repatriation, expatriation, visa, work permit or other agreement, contract or understanding between Seller or any ERISA Affiliate and any Employee.

          (m) “ Employment Liabilities ” shall mean any and all claims, debts, liabilities, commitments and obligations, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever or however arising, including all costs and expenses relating thereto arising under law, rule, regulation, permit, action or proceeding before any Governmental Entity, order or consent decree or any award of any arbitrator of any kind relating to any Employee Plan, Employment Agreement or otherwise relating to an Employee and his or her employment with Seller or any ERISA Affiliate.

          (n) “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder, or any successor statue, rules and regulations thereto.

          (o) “ ERISA Affiliate ” shall mean each subsidiary of Seller and any other person or entity under common control with Seller or any of its subsidiaries within the meaning of Section 414(b), (c), (m) or (o) of the Code and the regulations issued thereunder.

          (p) “ Escrow Agent ” shall mean U.S. Bank National Association.

          (q) “ Escrow Amount ” shall mean $450,000.

          (r) “ Escrow Fund ” shall mean the Escrow Amount deposited with the Escrow Agent.

          (s) “ Excluded Assets ” shall mean those items listed on Schedule 1.1(s) .

          (t) “ Excluded Liabilities ” shall have the meaning set forth in Section 2.2(a) .

          (u) “ FMLA ” shall mean the Family Medical Leave Act of 1993, as amended.

          (v) “ Governmental Entity ” shall mean any court, administrative agency or commission or other federal, state, county, local or foreign governmental authority, instrumentality, agency or commission.

          (w) “ Identified Employees ” shall mean the Persons listed on Schedule 1.1(w) .

          (x) “ Intellectual Property Rights ” shall mean any or all of the following and all statutory and/or common law rights throughout the world in, arising out of, or associated therewith: (i) all United States and foreign patents and utility models and applications therefor (including provisional applications) and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof (collectively, “ Patents ”); (ii) all inventions (whether or not patentable, reduced to practice or made the subject of a pending patent application), invention disclosures and improvements, all trade secrets, proprietary information, know-how and technology, and all documentation therefor; (iii) all works of authorship, copyrights (registered or otherwise), mask works, copyright and mask work registrations and applications and all other rights corresponding thereto throughout the world, and all rights therein provided by international treaties or conventions (collectively, “ Copyrights ”); (iv) all industrial designs and any registrations and applications therefor; (v) all trade names, logos, trademarks and service marks, whether or not registered, including all common law rights, and trademark and service mark registrations and applications, including but not limited to all marks registered in the United States Patent and Trademark Office, the Trademark Offices of the States and Territories of the United States of America, and the Trademark Offices of other nations throughout the world, and all rights therein provided by international treaties or conventions (collectively, “ Trademarks ”); (vi) all databases and data collections (including knowledge databases, customer lists and customer databases); (vii) all rights in Software and Technology; (viii) all rights to Uniform Resource Locators, Web site addresses and domain names (collectively, “ Domain Names ”); and (ix) any similar, corresponding or equivalent rights to any of the foregoing or in any Technology.

          (y) “ IRS ” shall mean the Internal Revenue Service.

          (z) “ Key Employees ” shall mean those Persons listed on Schedule 1.1(z) .

          (aa) “ Liability ” shall mean any liability or obligation (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, incurred or consequential or due or to become due), including any liability for Taxes.

          (bb) “ Lien ” shall mean any mortgage, pledge, lien, security interest, charge, claim, equity, encumbrance, restriction on transfer, conditional sale or other title retention device or arrangement (including, without limitation, a capital lease), transfer for the purpose of subjection to the payment of any indebtedness, or restriction on the creation of any of the foregoing, whether relating to any property or right or the income or profits therefrom.

          (cc) “ Maveron Payoff Amount ” shall mean the amount payable to satisfy and release in full the indebtedness of Seller as of the Closing Date pursuant to the Convertible Secured Promissory Note Purchase Agreement dated October 5, 2006 between Seller and entities affiliated with Maveron Equity Partners.

          (dd) “ Mosaic Payoff Amount ” shall mean the amount payable to satisfy and release in full the indebtedness of Seller as of the Closing Date pursuant to the Convertible Secured Promissory Note Purchase Agreement dated October 5, 2006 between Seller and Mosaic Venture Partners II Limited Partnership.

          (ee) “ Multiemployer Plan ” shall mean any Pension Plan that is a “multiemployer plan,” as defined in Section 3(37) of ERISA.

          (ff) “ Pension Plan ” shall refer to each Employee Plan that is an “employee pension benefit plan,” within the meaning of Section 3(2) of ERISA.

          (gg) “ Person ” shall mean an individual, partnership, firm, corporation, association, joint venture, trust, unincorporated organization or other entity, including any Governmental Entity or any department, agency or political subdivision thereof and any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

          (hh) “ Products ” means those items listed on Schedule 1.1(hh) (including any similar works under development).

          (ii) “ Purchase Price ” shall mean $3,018,500.

          (jj) “ Purchased Assets ” shall have the meaning set forth in Section 2.1 .

          (kk) “ Purchased Inventories ” shall mean the Inventories set forth on Schedule 1.1(kk) .

          (ll) “ Purchased Tangible Property ” shall mean the tangible property set forth on Schedule 1.1(ll) .

          (mm) “ Registered IP ” shall mean all United States, international and foreign: (i) Patents; (ii) Trademarks; (iii) Copyrights; (iv) Domain Names; and (v) any other Intellectual Property Rights that are the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any state, government or other public legal authority.

          (nn) “ Return ” shall have the meaning set forth in Section 5.14 .

          (oo) “ Software ” shall mean any and all computer software and code, including assemblers, applets, compilers, source code, object code, data (including image and sound data), operating systems and specifications, design tools and user interfaces, in any form or format, however fixed. Software shall include source code listings and documentation.

          (pp) “ Square 1 Payoff Amount ” shall mean the amount payable to satisfy and release in full the indebtedness of Seller as of the Closing Date pursuant to the Loan and Security Agreement dated December 15, 2005 and related documents between Seller and Square 1 Bank.

          (qq) “ Straddle Period Tax ” shall have the meaning set forth in Section 7.12(c) .

          (rr) “ Tax ” or, collectively, “ Taxes ,” shall mean (i) any and all federal, state, local and non U.S. taxes, assessments and other governmental charges, duties, impositions and liabilities, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, as well as public imposts, fees, and social security charges (including but not limited to health, unemployment and pension insurance), together with all interest, penalties and additions imposed with respect to such amounts; (ii) any liability for the payment of any amounts of the type described in clause (i) as a result of being a member of an affiliated, consolidated, combined or unitary group for any period; and (iii) any liability for the payment of any amounts of the type described in clause (i) or (ii) as a result of any express or implied obligation to indemnify any other person or as a result of any obligations under any agreements or arrangements with any other person with respect to such amounts and including any liability for taxes of a predecessor entity.

          (ss) “ Technology ” shall mean all information related to, constituting or disclosing, and all tangible copies and embodiments in any media of, technology, including all know-how, show-how, techniques, design rules, trade secrets, inventions (whether or not patented or patentable), algorithms, routines, Software, files, databases, works of authorship, processes, devices, prototypes, schematics, breadboards, netlists, mask works, test methodologies, hardware development tools.

          (tt) “ Transferred Agreements ” shall mean those agreements between Seller and a third party listed on Schedule 1.1(tt) .

          (uu) “ Transferred IP ” shall mean all Intellectual Property Rights, existing as of the Closing, owned or transferable by Seller related to, used in or necessary for the operation of the Business, including all Intellectual Property Rights and Technology listed or described on Schedule 1.1(uu) , and all rights to recover past, present and future damages for infringement of such Intellectual Property Rights.

          (vv) “ Transferred Technology ” shall mean all Technology, existing as of the Closing, owned or transferable by Seller related to, used in or necessary for the operation of the Business, including the Technology constituting the Products, as set forth on Schedule 1.1(vv) . To the extent that any Software constitutes Transferred Technology, all versions of such Software and Software from which such Software was derived, in both source and object code form, shall be included as Transferred Technology.

          (ww) “ Transfer Taxes ” shall have the meaning set forth in Section 3.3 .

ARTICLE II

     2.1 Purchase and Sale of Assets . Subject to the terms and conditions set forth in this Agreement, at the Closing, Seller hereby sells, conveys, transfers and assigns to Buyer, free and clear of all Liens, and Buyer hereby purchases from Seller, the following assets:

          (a) the Transferred Technology;

          (b) the Transferred IP;

          (c) all rights of Seller under the Transferred Agreements;

          (d) all Purchased Inventories;

          (e) all Purchased Tangible Property;

          (f) all Books and Records;

          (g) all other assets of Seller related to, used in or necessary for the operation of the Business (other than the Excluded Assets); and

          (h) all other goodwill of the Business.

     All of the assets referred to in Sections 2.1(a) through 2.1(h) , inclusive, are collectively referred to herein as the “ Purchased Assets .” Without limiting the generality of this Section 2.1 , the Purchased Assets shall not include the Excluded Assets.

     2.2 Assumption of Certain Liabilities .

          (a) Buyer shall not assume any Liabilities of Seller except for those Liabilities which Buyer expressly assumes pursuant to this Section 2.2(a) . On the terms and subject to the conditions of this Agreement, Buyer shall, on the Closing Date, assume the Liabilities of Seller as of the Closing Date listed on Schedule 2.2(a) (the “ Assumed Liabilities ”). Notwithstanding any on Schedule 2.2(a) to the contrary, Buyer is not assuming any liabilities arising from periods prior to the Closing Date.

          (b) Seller shall retain and be responsible for paying, performing and discharging when due, and Buyer shall not assume or have any responsibility for, all Liabilities of Seller as of the Closing Date other than the Assumed Liabilities (the “ Excluded Liabilities ”). Without limiting the generality of the foregoing, the Excluded Liabilities shall include, without limitation, any of the following Liabilities (other than the Assumed Liabilities):

               (i) any Liability arising from or related to the operations of Seller, whenever arising or incurred, or the ownership of the Products and the Purchased Assets by Seller through the Closing Date;

               (ii) any Employment Liability;

               (iii) claims (including any threatened claims) for death, personal injury, property damage or consequential, punitive, or other damages relating to or arising out of any business conducted by Seller;

               (iv) the violation or alleged violation of any law, including but not limited to, laws relating to civil rights, health, safety, labor, discrimination, and protection of the environment;

               (v) claims (including any threatened claims) of creditors of Seller;

               (vi) claims (including any threatened claims) relating to the disposal or arrangement for disposal by Seller of any hazardous substance at any site, location or facility (whether or not owned or leased by Seller);

               (vii) any obligation of Seller to indemnify any Person;

               (viii) any Taxes of Seller, including any liability for Taxes arising from or attributable to Seller’s operation of the Business or use or ownership of the Purchased Assets for all taxable periods (or portions thereof) ending on or prior to the Closing Date, and including any Transfer Taxes and Straddle Period Taxes attributable to Seller pursuant to this Agreement; and

               (ix) any liability or obligation of Seller for costs and expenses incurred in connection with this Agreement, and the transactions contemplated hereby and thereby.

ARTICLE III

     3.1 Closing . Subject to the terms and conditions of this Agreement, the closing hereunder (the “ Closing ”) shall take place at 10:00 a.m. local time on a date within three (3) business days of the satisfaction or waiver of the last of the conditions to closing set forth in Article VIII and Article IX hereof at the offices of Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto, CA 94304, or at such other place and time as may be agreed upon by the parties. The date on which the Closing shall occur is referred to herein as the “ Closing Date .”

     3.2 Purchase Price; Settlement of Net Accounts Receivable .

          (a) At the Closing, Buyer will pay the Purchase Price as follows:

               (i) Buyer shall deliver to Seller the Closing Consideration by wire transfer of immediately available funds to an account designated by Seller;

               (ii) Buyer shall deliver to Maveron Equity Partners the Maveron Payoff Amount by wire transfer of immediately available funds to an account designated by Maveron Equity Partners;

               (iii) Buyer shall deliver to Mosaic Equity Partners the Mosaic Payoff Amount by wire transfer of immediately available funds to an account designated by Mosaic Equity Partners;

               (iv) Buyer shall deliver to Square 1 Bank the Square 1 Payoff Amount by wire transfer of immediately available funds to an account designated by Square 1 Bank; and

               (v) Buyer shall deposit the Escrow Amount into the Escrow Fund in accordance with the provisions of Section 10.3 hereof.

          (b) In addition, at the Closing, Buyer will pay fifty percent (50%) of the “Amount owed to JF from Taleo” set forth on Schedule 3.2(b) (the “ First Settlement ”).

          (c) Sixty (60) days following the Closing (the “ Settlement Date ”), Buyer will pay to Seller the remaining fifty percent (50%) of the “Amount owed to JF from Taleo” set forth on set forth on Schedule 3.2(b) (the “ Second Settlement ”); provided, however , that an amount equal to the product of (i) the “AR 02/28/07” amount set forth on Schedule 3.2(b) (the “ Outstanding AR ”), and (ii) the percentage of Outstanding AR not received or collected by Buyer or Seller as of three business days prior to the Settlement Date (the “ Uncollected AR Percentage ”) (the product of (i) and (ii), the “ Non-Collected AR ”), shall be subtracted from the Second Settlement. For purposes of clarity, if the Non-Collected AR exceeds the Second Settlement, Buyer shall not make any payment to Seller.

          (d) Buyer and Seller shall use commercially reasonable efforts to collect the Outstanding AR, or Seller shall use commercially reasonable efforts to assist Buyer in collecting the Outstanding AR, during the period from the Closing to the Settlement Date (the “ Settlement Period ”). During the Settlement Period, Seller will provide to Buyer any payments of Outstanding AR by Seller within three (3) business days of receipt by such moneys by Seller. Three (3) business days prior to the Settlement Date, Buyer shall provide Seller with a schedule (the “ AR Collection Schedule ”) of (i) any payments of Outstanding AR either received by Buyer during the Settlement Period or delivered by Seller to Buyer during the Settlement Period and (ii) the Uncollected AR Percentage. The AR Collection Schedule shall be conclusive and binding upon Buyer and Seller for all purposes.

          (e) Seller acknowledges that $18,500 of the Purchase Price will be paid to Sara Brantley by Seller following the Closing, and that Buyer is not responsible for paying this amount to Sara Brantley.

     3.3 Transfer Taxes . Seller shall be responsible for and shall pay when due any sales, use, value-added, gross receipts, excise, registration, stamp duty, transfer or other similar taxes or governmental fees (including any interest or penalties related thereto) that may be payable in connection with the sale or purchase of the Purchased Assets (the “ Transfer Taxes ”). The parties hereto shall cooperate, to the extent reasonably requested and permitted by applicable law, in minimizing any such Transfer Taxes, including but not limited to the transfer by remote electronic transmission of all Purchased Assets capable of being so transmitted and the delivery of certificates evidencing such electronic transmission. The party required by law to file a Return with respect to such Transfer Taxes shall do so within the time period prescribed by law, and Seller shall promptly reimburse Buyer for any Transfer Taxes so paid by Buyer upon receipt of notice that such Transfer Taxes have been paid.

     3.4 Further Assurances; Post-Closing Cooperation .

          (a) At any time or from time to time after the Closing, at Buyer’s request, at no cost to Buyer and without further consideration, Seller shall execute and deliver to Buyer such other instruments of sale, transfer, conveyance, assignment and confirmation, provide such materials and information and take such other actions as Buyer may reasonably deem necessary or desirable in order to more effectively transfer, convey and assign to Buyer, and to confirm Buyer’s title to, all of the Purchased Assets and, to the full extent permitted by law, to put Buyer in actual possession and operating control of the Purchased Assets, and to assist Buyer in exercising all rights with respect thereto, and otherwise to cause Seller to fulfill its obligations under this Agreement.

          (b) To the extent that Buyer cannot be granted possession in respect of any Purchased Asset as of the Closing Date, such Purchased Assets shall be held by Seller for and on behalf of Buyer until such time as Buyer is granted possession thereof and during such period Seller shall bear all risk of loss with respect to such assets.

          (c) Unless specifically authorized in writing by Buyer, after the Closing, Seller shall not retain or use any copy of any Transferred Technology or any other Purchased Asset that is capable of being copied, including any Software or materials constituting Transferred Technology.

          (d) Effective on the Closing Date, Seller hereby constitutes and appoints Buyer the true and lawful attorney of Seller, with full power of substitution, in the name of Seller or Buyer, but on behalf of and for the benefit of Buyer: (i) to demand and receive from time to time any and all of the Purchased Assets and to make endorsements and give receipts and releases for and in respect of the same and any part thereof; (ii) to institute, prosecute, compromise and settle any and all actions, suits, proceedings, arbitration, or governmental or regulatory investigations or audits (“ Actions or Proceedings ”) that Buyer may deem proper in order to collect, assert or enforce any claim, right or title of any kind in or to the Purchased Assets; (iii) to defend or compromise any or all Actions or Proceedings in respect of any of the Purchased Assets; and (iv) to do all such acts and things in relation to the matters set forth in the preceding clauses (i) through (iii) as Buyer shall deem desirable; provided , however , that if any of the actions authorized by this section could reasonably be determined to result in a claim for indemnification by Buyer against Seller, then Buyer shall not take any such actions without complying with the procedures set forth in ARTICLE X of this Agreement. Seller hereby acknowledges that the appointment hereby made and the powers hereby granted are coupled with an interest and are not and shall not be revocable by it in any manner or for any reason. Seller shall deliver to Buyer at the Closing an acknowledged power of attorney to the foregoing effect executed by Seller.

          (e) Following the Closing, Seller will afford Buyer, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data in Seller’s possession relating to the Products with respect to periods prior to the Closing and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by Buyer in connection with: (i) the preparation of tax returns; (ii) the determination or enforcement of rights and obligations under this Agreement, including without limitation by any Indemnified Party (as defined in Section 10.2 ); (iii) compliance with the requirements of any Governmental Entity; or (iv) in connection with any actual or threatened Action or Proceeding.

     3.5 Preservation of the Purchased Assets . Seller hereby agrees to take all actions that are either commercially reasonable or which are otherwise consistent with past practices to preserve the value and integrity of the Purchased Assets prior to the transfer of such assets to Buyer pursuant to this Agreement.

     3.6 Allocation of Purchase Price . The parties hereto intend that the purchase be treated as a taxable transaction for federal and state income tax purposes. Within ninety (90) days of the Closing Date, Buyer shall provide Seller with an allocation among the Purchased Assets of the Purchase Price plus the amount of the Assumed Liabilities to the extent properly taken into account under Section 1060 of the Code and the regulations promulgated thereunder (the “ Allocation ”). The Allocation shall be conclusive and binding upon Buyer and Seller for all purposes, and the parties agree that all returns and reports (including IRS Form 8594) and all financial statements shall be prepared in a manner consistent with (and the parties shall not otherwise take a position on a Return that is inconsistent with) the Allocation unless required by the IRS or any other applicable taxing authority.

ARTICLE IV

     4.1 Deliveries of Seller . At the Closing, Seller will, at Seller’s sole cost, in the manner and form, and to the locations reasonably specified by Buyer, deliver to Buyer:

          (a) all of the Purchased Assets or, in the case of the Transferred IP or other intangible assets, such instruments as are necessary or desirable to document and to transfer title to such assets from Seller to Buyer; provided , however , that all Software included in the Transferred Technology shall be delivered to Buyer by electronic means;

          (b) (i) a duly executed Transition Services Agreement, (ii) a duly executed bill of sale and assignment for the Purchased Assets substantially in the form of Exhibit C hereto; (iii) assignments of the Transferred IP in form acceptable to Buyer and otherwise suitable for filing in all relevant jurisdictions, including the copyright registrations and assignments required pursuant to this Section 4.1 ; (iv) an assumption agreement in substantially the form of Exhibit D hereto pursuant to which Buyer shall assume the Assumed Liabilities; and (v) such other good and sufficient instruments of conveyance, assignment and transfer, in form and substance reasonably acceptable to Buyer’s counsel, as shall be effective to vest in Buyer good and valid title in and to the Purchased Assets (the instruments referred to in clauses (i), (ii), (iii), (iv) and (v) being collectively referred to herein as the “ Ancillary Agreements ”);

          (c) for each item of Registered IP included in the Transferred IP, an assignment in form reasonably acceptable to Buyer to record the transfer of such Registered IP to Buyer in each place in which such Intellectual Property Rights are registered;

          (d) (i) all of the Transferred Agreements, and (ii) for each such Transferred Agreement, to the extent required by its terms, a written agreement in a form satisfactory to Buyer, signed by the party or parties (other than Seller) to such Transferred Agreement pursuant to which such party or parties thereto: (A) consent to the transfer and assignment of such Transferred Agreement to Buyer; and (B) confirm that Buyer will have all rights that Seller had under such Transferred Agreement prior to the Closing;

          (e) all other previously undelivered documents required to be delivered by Seller to Buyer at or prior to the Closing in connection with the transactions contemplated by this Agreement; and

          (f) all such other assignments and other instruments as, in the opinion of Buyer’s counsel, are necessary to vest in Buyer good, valid and marketable title to the Purchased Assets.

     4.2 Deliveries of Buyer . At the Closing, Buyer shall deliver to Seller the payment payable on the Closing Date as provided in Section 3.2 hereof.

ARTICLE V

     Except as specifically disclosed in the disclosure schedule attached hereto (the “ Disclosure Schedule ”) (referencing the appropriate section and paragraph numbers), Seller hereby represents and warrants to Buyer, as of the date of this Agreement and as of the Closing Date as though made as of the Closing Date, as follows:

     5.1 Organization, Good Standing and Qualification . Seller is a corporation duly organized, validly existing, and in good standing under the laws of Delaware. Seller has all requisite corporate power and authority to own its properties and to carry on its business as now conducted and as currently contemplated to be conducted. Seller is duly qualified to transact business and is in good standing in all jurisdictions in which the nature of its respective business or of its respective properties makes such qualification necessary. Seller has delivered a true and correct copy of its certificate of incorporation and bylaws, each as amended to date and in full force and effect on the date hereof, to Buyer.

     5.2 Authority . Seller has all requisite corporate power and authority to enter into this Agreement and the Ancillary Agreements and, subject to satisfaction of the conditions set forth herein, to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Seller, and no further action is required on the part of Seller to authorize the Agreement and the transactions contemplated hereby. This Agreement has been, and upon their execution the Ancillary Agreements will be, duly executed and delivered by Seller, and this Agreement constitutes, and upon their execution the Ancillary Agreements will constitute, legal, valid and binding obligations of Seller, enforceable in accordance with their respective terms, subject to the effect of applicable bankruptcy, insolvency, reorganization or other similar laws affecting the rights of creditors and the effect or availability of rules of law governing specific performance, injunctive relief or other equitable remedies.

     5.3 No Conflict . The execution and delivery of this Agreement and the Ancillary Agreements does not or will not, and the consummation of the transactions contemplated hereby and thereby will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation under (a) any provision of the certificate of incorporation or the bylaws of Seller, (b) any mortgage, lease, indenture, contract or other agreement or instrument, permit, concession, franchise or license to which Seller is a party or any of the Purchased Assets are subject, or (c) any judgment, order or decree specifically naming Seller or the Purchased Assets, or (d) any statute, law, ordinance, rule or regulation applicable to Seller or the Purchased Assets.

     5.4 Consents and Approvals . No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to Seller in connection with the execution and delivery of this Agreement by Seller or the consummation by Seller of the transactions contemplated hereby.

     5.5 Restrictions on Transaction . There is no agreement (not to compete or otherwise), commitment, judgment, injunction, order or decree to which Seller is a party binding upon the Purchased Assets which has or may have the effect of prohibiting the Asset Acquisition or impairing the use of the Purchased Assets.

     5.6 Capitalization .

          (a) The authorized capital stock of Seller consists of 26,817,483 shares of Common Stock, par value $0.0001 per share (the “ Common Stock ”), of which 2,712,833 shares are issued and outstanding, and 19,307,517 shares of the Preferred Stock, par value $0.0001 per share (the “ Preferred Stock ,” and together with the Common Stock, the “Capital Stock”), of which (i) 1,693,997 are designated Series A Preferred Stock, all of which are issued and outstanding, (ii) 4,238,520 are designated Series B Preferred Stock, all of which are issued and outstanding, (iii) 3,375,000 are designated Series B-1 Preferred Stock, 3,125,000 of which are issued and outstanding. Each share of Preferred Stock is

convertible on a one-share for one-share basis into Company Common Stock. Seller has issued and outstanding warrants for the purchase of an aggregate of 31,250 shares of Series B-1 Preferred Stock. A list of major stockholders is set forth in Section 5.6(a) of the Disclosure Schedule. All outstanding shares of Capital Stock are duly authorized, validly issued, fully paid and non-assessable and are not subject to preemptive rights created by statute, the certificate of incorporation and bylaws of Seller, or any agreement to which Seller is a party or by which it is bound. All outstanding shares of Capital Stock have been issued in compliance with all applicable federal, state, foreign, or local statutes, laws, rules, or regulations, including federal and state securities laws, and were issued, transferred and repurchased (in the case of shares that were outstanding and repurchased by Seller or any Stockholder) in accordance with any right of first refusal or similar right or limitation, including those in the certificate of incorporation and bylaws. Seller has not and will not have suffered or incurred any liability (contingent or otherwise) or claim, loss, liability, damage, deficiency, cost or expense relating to or arising out of the issuance or repurchase of any Capital Stock, or out of any agreements or arrangements relating thereto (including any amendment of the terms of any such agreement or arrangement). There are no declared or accrued but unpaid dividends with respect to any shares of Capital Stock. Seller has no other capital stock authorized, issued or outstanding.

          (b) Except for the Amended and Restated 2002 Equity Incentive Plan (the “ Option Plan ”), neither the Company nor any of its subsidiaries has ever adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for equity compensation to any person. The Company has reserved a total of 1,883,000 shares of Common Stock for issuance under the Option Plan of which options to purchase 1,035,344 shares of Common Stock are outstanding and 129,823 shares are available to be granted as of the date hereof. True and complete copies of all agreements and instruments relating to or issued under the Option Plan have been provided to Buyer and such agreements and instruments have not been amended, modified or supplemented, and there are no agreements to amend, modify or supplement such agreements or instruments, from the forms thereof provided to Buyer.

          (c) Section 5.6(c) of the Disclosure Schedule sets forth the outstanding principal, accrued interest and applicable rate of interest or per diem of all outstanding stockholder loans. Except as set forth in Section 5.6(a) and 5.6(b) , there are no options, warrants, calls, rights, convertible securities, commitments or agreements of any character, written or oral, to which Seller is a party or by which Seller is bound obligating Seller to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of Seller or obligating Seller to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to Seller. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting stock of Seller. There are no agreements to which Seller is or has been a party relating to the registration, sale or transfer (including agreements relating to rights of first refusal, co-sale rights or “drag-along” rights) of any Capital Stock.

     5.7 Financial Statements . Section 5.7 of the Disclosure Schedule sets forth the unaudited balance sheets and related statements of income, changes in stockholder’s equity and cash flow as of and for the fiscal year ended January 31, 2007 (the “ Financial Statements ”). The Financial Statements are complete and true and accurate in all material respects, and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby and present fairly the financial condition of Seller as of such dates and the results of operations for such periods.

     5.8 Business Changes . Since December 31, 2006, except as otherwise contemplated by this Agreement, (a) the Business has been conducted only in the ordinary and usual course consistent with

past practices and (b) there have been no changes in the financial condition, business, assets, operations, obligations or liabilities of the Business which, in the aggregate, have had or may be reasonably expected to have a material adverse effect on the condition, business, assets, operations or prospects of the Business. To the knowledge of Seller, there are no circumstances which are likely to cause Seller to suffer any material adverse change in the condition, business, net worth, assets, operations or prospects of the Business.

     5.9 Sufficiency of Assets . Except for (i) the Excluded Assets, and (iii) any general corporate or administrative services provided to the Business by the Seller, the Purchased Assets include all assets and rights that are primarily used or held for use by Seller in the operation of the Business, and are necessary and sufficient for the conduct of the Business by Buyer following the Closing in the same manner as presently conducted by Seller. The Purchased Assets are in good operating condition and have been properly maintained.

     5.10 Title to Purchased Assets . Seller has good and valid title to all of the Purchased Assets (including the Transferred IP and the Transferred Technology) free and clear of any Liens (including liens for Taxes). The tangible assets of Seller included with the Purchased Assets are in good condition and repair, subject to normal wear and tear. Buyer shall be able to use the Purchased Assets and exercise, and enjoy the benefits of, the Purchased Assets in substantially the same manner as Seller, prior to the Closing, without infringing the rights of any third party.

     5.11 No Default .

          (a) Each of the Transferred Agreements is a valid and enforceable obligation of Seller. To the knowledge of Seller, no party to any Transferred Agreement is in default thereunder or has breached any term or provision thereof.

          (b) Seller has performed, or is now performing, the obligations of, and is not in material default (or, to the knowledge of Seller, would by the lapse of time and/or the giving of notice be in material default) in respect of, any contract, agreement or commitment binding upon it or its assets or properties and material to the conduct of the Business, including the Transferred Agreements. No third party has raised any claim, dispute or controversy with respect to any of the Transferred Agreements, nor has Seller received notice or warning of alleged nonperformance, delay in delivery or other noncompliance by Seller with respect to its obligations under any of those contracts, nor to the knowledge of Seller, are there any facts which exist indicating that any of those contracts may be totally or partially terminated or suspended by the other parties thereto prior to the expiration by their terms.

     5.12 Intellectual Property .

          (a) Schedule 1.1(uu) and Schedule 1.1(vv) , listing the Transferred IP and the Transferred Technology, are complete and accurate.

          (b) Section 5.12(b) of the Disclosure Schedule lists all Transferred IP that is Registered IP and lists any proceedings or actions before any court, tribunal (including the United States Patent and Trademark Office or equivalent authority anywhere in the world) related to any of the Registered IP. All such Registered IP is currently in compliance with formal legal requirements (including payment of filing, examination and maintenance fees and proofs of use), is valid and enforceable, and is not subject to any unpaid maintenance fees or taxes or actions falling due within ninety (90) days after the Closing Date. Seller has not claimed any status in the application for or registration of any Registered IP, including “small business status,” that would not be applicable to

Buyer. Seller has no knowledge of any information, materials, facts or circumstances, including any information or fact that would constitute prior art, that would render any of the Registered IP invalid or unenforceable, or would materially affect any pending application for any Registered IP, and Seller has not knowingly misrepresented, or knowingly failed to disclose, any facts or circumstances in any application for any Registered IP that would constitute fraud or a misrepresentation with respect to such application or that would otherwise affect the enforceability of any Registered IP.

          (c) Each item of the Transferred IP and Transferred Technology is free and clear of any Lien. Seller owns exclusively, and has good title to all works of authorship and all associated copyrights that are used or embodied in, the Transferred Technology, and no other Person has any other rights thereto, and to the extent that any patents would be infringed by the manufacture, use, sale or import of any Transferred Technology, Seller is the exclusive owner of such patents, or has or will have secured appropriate rights from the owner through license or other agreement to make, use, sell and import the Transferred Technology. No person other than Seller has ownership rights or license rights granted by Seller to an improvement made by or for Seller in any Transferred IP or Transferred Technology. Seller owns exclusively all trade names, trademarks and service marks, and logos used in connection with the operation or conduct of the Business, including the sale of any Products or the provision of any services. All Purchased Assets will be fully transferable, alienable or licensable by Buyer without restriction and without payment of any kind to any third party.

          (d) To the extent that any Transferred IP or item of Transferred Technology was originally owned or created by, for or with any third party, including any predecessor of Seller, (i) Seller has a written agreement with such third party or parties with respect thereto, pursuant to which Seller has obtained complete, unencumbered and unrestricted ownership and is the exclusive owner of, all such Transferred IP and Transferred Technology by valid assignment or otherwise; (ii) the transfers and licenses from Seller to Buyer hereunder do not violate such third party agreements; (iii) such third parties have not retained and do not have any rights or licenses with respect to the Transferred IP or Transferred Technology; and (iv) no basis exists for such third party to challenge or object to this Agreement.

          (e) Seller has the full and unencumbered right to assign and transfer to Buyer all of Seller’s rights in and under the Transferred Agreements without incurring, or causing Buyer to incur, any obligation to any third party, including any royalty obligations, other than those obligations that Seller would have had had such transfer not taken place. Seller has not transferred ownership of, or granted any license of or right to use, or authorized the retention of any exclusive rights to use or joint ownership of any Transferred Technology or associated Intellectual Property Rights to any other Person.

          (f) The Purchased Assets, including the Transferred IP and the Transferred Technology, constitute or include all of the Intellectual Property Rights reasonably known by Seller that would be infringed by and other assets related to, used in or necessary for the current or reasonably anticipated future use, operation or exploitation of the Business and the Transferred Technology.

          (g) No government funding, facilities of a university, college, other educational institution or research center or funding from third parties was used in the development of the Transferred Technology. No current or former employee, consultant or independent contractor of Seller, who was involved in, or who contributed to, the creation or development of any Transferred Technology has performed services for the government, a university, college, or other educational institution, or a research center, during a period of time during which such employee, consultant or independent contractor was also performing services for Seller.

          (h) Seller has, and as a result of the transactions contemplated by this Agreement, Buyer will have, the right to use, pursuant to valid licenses, all Software development tools, library functions, compilers and all other third-party Software that are material to the Business or that are used in the Business to create, modify, compile, operate or support any Software (including the Products) that is Transferred Technology.

          (i) No third party Software that was not properly licensed was, or is, used in, incorporated into, integrated or bundled with, or used in the development or compilation (other than generally available commercial compilers) of, any Technology that is or was Transferred Technology or a Product.

          (j) Other than the Transferred Agreements, there are no contracts, licenses or agreements to which Seller is a party or is subject with respect to any Transferred Technology or the Transferred IP.

          (k) Seller does not have knowledge that any person is infringing the Transferred IP. Neither (i) the operation of the Business, including the making, using, selling, licensing and distribution of the Products, by Seller or, following the Closing, by Buyer, nor (ii) the Purchased Assets (including the Transferred Technology), did or will do: (A) infringe or misappropriate the Intellectual Property Rights of any Person; (B) violate the rights of any Person (including rights to privacy or publicity); or (C) constitute unfair competition or trade practices under the laws of any jurisdiction. Seller has not received notice from any Person claiming that the Transferred IP or the Transferred Technology is invalid, infringes or misappropriates the Intellectual Property Rights of any Person or constitutes unfair competition or trade practices under the laws of any jurisdiction (nor does Seller have knowledge of any basis therefor).

          (l) Each item of Transferred IP is valid and subsisting, and all necessary registration, maintenance and renewal fees have been paid, and all necessary documents and certificates have been filed with the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Intellectual Property Rights. There are no actions that must be taken by Seller within sixty (60) days of the Closing Date, including the payment of any registration, maintenance or renewal fees or the filing of any documents, applications or certificates for the purposes of maintaining, perfecting or preserving or renewing any Intellectual Property Rights. In each case in which Seller has acquired any of the Transferred Technology from any person or entity, Seller has obtained a valid and enforceable assignment sufficient to irrevocably transfer or license all rights in such Transferred Technology and the associated Intellectual Property Rights (including the right to seek past and future damages with respect thereto) to Buyer.

          (m) There are no contracts, licenses or agreements between Seller and any other person or entity with respect to the Purchased Assets, including the Transferred IP, under which there is any dispute known to Seller regarding the scope of such agreement or performance under such agreement, including with respect to any payments to be made or received by Seller thereunder.

          (n) Seller has taken all reasonable steps that are required to protect Seller’s rights in confidential information and trade secrets related to the Business. Any other Person who has knowledge of or access to information relating to the confidential information and trade secrets of the Business has been put on notice and, if appropriate, has entered into an agreement that the confidential information and trade secrets are proprietary to Seller and are not to be divulged or misused. All of the trade secrets are presently valid and protectable, are not part of the public domain, and to Seller’s knowledge have not been used, divulged, or appropriated for the benefit of any persons other than Seller or to the detriment of Seller. Seller has and enforces a policy requiring each employee and consultant of Seller to execute a

proprietary rights and confidentiality agreement substantially in the form set forth in Section 5.12(n) of the Disclosure Schedule, and all current and former employees and consultants of Seller who have created or modified any of the Transferred Technology have executed such an agreement assigning all of such employees’ and consultants’ rights in and to the Transferred Technology and the Transferred IP to Seller.

          (o) None of the Purchased Assets is subject to any proceeding or outstanding decree, order, judgment or settlement agreement or stipulation that restricts in any manner the use, transfer or licensing thereof by Seller or may affect the validity, use or enforceability of such Purchased Assets.

          (p) Section 5.12(p) of the Disclosure Schedule lists all software that is distributed as “open source software” or under a similar licensing or distribution model (including but not limited to the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL) the Sun Industry Standards License (SISL) and the Apache License) (collectively, “ Open Source Software ”) that has been incorporated into any Company Product in any way and describes the manner in which such Open Source Software was incorporated (such description shall include, without limitation, whether (and, if so, how) the Open Source Software was modified and/or distributed by Seller and whether (and if so, how) such Open Source Software was incorporated into and linked in any Product). Seller has not used Open Source Software in any manner that would or could (i) require the disclosure or distribution in source code form of any Product, (ii) require the licensing of any Product for the purpose of making derivative works, (iii) impose any restriction on the consideration to be charged for the distribution of any Product, (iv) create, or purport to create, obligations for Seller with respect to Intellectual Property Rights owned by Seller or grant, or purport to grant, to any third party, any rights or immunities under Intellectual Property Rights owned by Seller or (v) impose any other material limitation, restriction, or condition on the right of Seller to use or distribute any Product. With respect to any Open Source Software that is or has been used by Seller or any of its Subsidiaries in any way, Seller has been and is in compliance with all applicable licenses with respect thereto.

          (q) The Transferred Technology and Products (i) will perform in accordance with all specifications therefor, (ii) will be free from all material bugs or defects, (iii) will function for its intended purpose, and (iv) will not contain any viruses, trap doors, time bombs or any harmful or undisclosed code.

          (r) No third party possesses any copy of any source code to any Software, other than a licensor of such software, that is Transferred Technology (including any Product), and Seller shall have delivered to Buyer all copies of, and Seller shall not have retained any copy of, any source code to any Software that is Transferred Technology.

          (s) None of the Software constituting the Products has been incorporated into, or is otherwise a substantial part of, any other Software of Seller, including Software previously owned by Seller.

          (t) Seller is not required to make or accrue any royalty payment to any third party in connection with any of the Purchased Assets or Transferred IP.

          (u) Seller has disclosed in writing to Buyer, all information relating to any problem or issue with respect to any of th