UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION


                         Washington, D.C. 20549


                                FORM 8-K


                             CURRENT REPORT
                   Pursuant to Section 13 or 15(d) of
                   the Securities Exchange Act of 1934



   Date of Report (Date of earliest event reported):  February 21, 2006

                         EXCEL TECHNOLOGY, INC.
          .................................................
          (Exact name of Registrant as specified in Charter)

          Delaware                    0-19306            11-2780242
(State or other jurisdiction       (Commission         (I.R.S. Employer
      of Incorporation)            File Number)      Identification No.)


                 41 Research Way, E. Setauket, NY 11733
          ..................................................
          (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (631)-784-6175
                                                      .............


      ............................................................
     (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:

     [ ]  Written communications pursuant to rule 425 under the
          Securities Act (17 CFR 230.425)

     [X]  Soliciting material pursuant to Rule 14a-12 under the Exchange
          Act (17 CFR 240.14a-12)

     [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under
          the Exchange Act (17 CFR 240.14d-2(b))

     [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under
          the Exchange Act (17 CFR 240.13e-4(c))







ITEM 1.01.     OTHER EVENTS.

     On February 20, 2006, Excel Technology, Inc. (the "Company") entered
into an Agreement and Plan of Merger (the "Merger Agreement") with
Coherent, Inc., a Delaware corporation ("Parent"), and Spider Acquisition
Merger Corporation, a Delaware corporation and wholly owned subsidiary of
Coherent, Inc. ("Merger Sub").  Under the Merger Agreement, Merger Sub
would be merged with and into the Company (the "Merger"), the separate
corporate existence of Merger Sub will cease and the Company will
continue as the surviving corporation (the "Surviving Corporation") and
as a wholly-owned subsidiary of Parent.

     Pursuant to the Merger Agreement, at the effective time of the
Merger, each issued and outstanding share of common stock, par value
$0.001 per share, of the Company ("Common Stock") issued and outstanding
immediately prior to the effective time, other than Common Stock held by
any stockholders who are entitled to and properly exercise appraisal
rights under Delaware law, shall be automatically converted into the
right to receive $30.00 in cash per share.

     The Merger is conditioned upon, among other things, the adoption of
the Merger Agreement by the stockholders of the Company pursuant to
applicable law and the termination or expiration of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

     The foregoing description of the Merger Agreement does not purport
to be complete and is qualified in its entirety by reference to the
Merger Agreement, which is attached as Exhibit 2.1 to this Current Report
on Form 8-K and is incorporated herein by reference.

Additional Information and Where to Find It

     The Company intends to file a proxy statement on Schedule 14A more
fully describing the merger transaction involving the Company and Parent.
The proxy statement will be mailed to the stockholders of the Company.
The Company's stockholders are urged to read the proxy statement and
other relevant materials when they become available because they will
contain important information about the acquisition and the Company.
Investors and security holders may obtain free copies of these documents
(when they are available) and other documents filed with the Securities
and Exchange Commission (the "SEC") at the SEC's web site at www.sec.gov.
In addition, investors and security holders may obtain free copies of the
documents filed with the SEC by the Company by going to the Company's SEC
Filing Page on its corporate website at http://www.Exceltechinc.com.

     In addition, the Company and its officers and directors may be
deemed to be participants in the solicitation of proxies from the
Company's stockholders with respect to the acquisition.  A description of
any interests that the Company's officers and directors have in the
acquisition will be available in the proxy statement.

ITEM 9.01:  FINANCIAL STATEMENTS AND EXHIBITS.

     (d)  Exhibits

          2.1     Agreement and Plan of Merger, dated as of February 20,
2006, by and among Excel Technology, Inc., Coherent, Inc. and Spider
Acquisition Corporation.


                               Signatures:

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.



Date: February 21, 2006

                                EXCEL TECHNOLOGY, INC.
                                By:
                                    /s/ Antoine Dominic
                                    ......................
                                    Antoine Dominic
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)



                                                 EXHIBIT 2.1 TO FORM 8-K



                      AGREEMENT AND PLAN OF MERGER
                              BY AND AMONG
                             COHERENT, INC.,
                     SPIDER ACQUISITION CORPORATION
                                   AND
                         EXCEL TECHNOLOGY, INC.
                     Dated as of February 20, 2006







                           TABLE OF CONTENTS


                                                                    Page
                                                                    ....

ARTICLE I THE MERGER                                                   2

1.1  The Merger                                                        2
     ..........
1.2  Effective Time; Closing                                           2
     .......................
1.3  Effect of the Merger                                              2
     ....................
1.4  Certificate of Incorporation and Bylaws                           2
     .......................................
1.5  Directors and Officers                                            3
     ......................
1.6  Effect on Capital Stock                                           3
     .......................
1.7  Surrender of Certificates                                         4
     .........................
1.8  No Further Ownership Rights in Company Common Stock               6
     ...................................................
1.9  Lost, Stolen or Destroyed Certificates                            6
     ......................................
1.10 Dissenting Shares                                                 6
     .................
1.11 Further Action                                                    7
     ..............

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY               7

2.1  Organization; Standing and Power; Charter Documents; Subsidiaries 7
     .................................................................
2.2  Capital Structure                                                 9
     .................
2.3  Authority; Non-Contravention; Necessary Consents                 11
     ................................................
2.4  SEC Filings; Financial Statements; Controls                      12
     ...........................................
2.5  Absence of Certain Changes or Events                             14
     ....................................
2.6  Taxes                                                            15
     .....
2.7  Intellectual Property                                            18
     .....................
2.8  Compliance; Permits                                              23
     ...................
2.9  Litigation                                                       23
     ..........
2.10 Brokers' and Finders' Fees; Fees and Expenses                    23
     .............................................
2.11 Transactions with Affiliates                                     24
     ............................
2.12 Employee Benefit Plans                                           24
     ......................
2.13 Title to Properties                                              27
     ...................
2.14 Environmental Matters                                            28
     .....................
2.15 Contracts                                                        30
     .........
2.16 Disclosure                                                       33
     ..........
2.17 Board Approval                                                   33
     ..............
2.18 Fairness Opinion                                                 33
     ................
2.19 Takeover Statutes                                                33
     .................

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB   34

3.1  Organization; Standing and Power; Charter Documents; Merger Sub  34
     ...............................................................
3.2  Authority; Non-Contravention; Necessary Consents                 34
     ................................................
3.3  SEC Filings; Financial Statements                                35
     .................................
3.4  Disclosure                                                       36
     ..........
3.5  Board Approval                                                   36
     ..............
3.6  No Prior Merger Sub Operations                                   36
     ..............................
3.7  Financing                                                        36
     .........

ARTICLE IV CONDUCT BY THE COMPANY PRIOR TO THE EFFECTIVE TIME         36

4.1  Conduct of Business by the Company                               36
     ..................................

ARTICLE V ADDITIONAL AGREEMENTS                                       41

5.1  Proxy Statement                                                  41
     ...............
5.2  Meeting of Company Stockholders; Board Recommendation            42
     .....................................................
5.3  Acquisition Proposals                                            43
     .....................
5.4  Confidentiality; Access to Information; No Modification of
     ..........................................................

     Representations, Warranties or Covenants                         47
     ........................................

5.5  Public Disclosure                                                48
     .................
5.6  Regulatory Filings; Commercially Reasonable Efforts              48
     ...................................................
5.7  Notification of Certain Matters                                  50
     ...............................
5.8  Third-Party Consents                                             51
     ....................
5.9  Termination of 401(k) Plans                                      51
     ...........................
5.10 Indemnification                                                  51
     ...............
5.11 Merger Sub Compliance                                            52
     .....................
5.12 [Reserved]                                                       52
     ..........
5.13 Section 83(b) Elections                                          53
     .......................
5.14 Spreadsheet                                                      53
     ...........
5.15 Takeover Laws                                                    53
     .............
5.16 Cooperation with Financing                                       53
     ..........................
5.17 Company Options                                                  54
     ...............
5.18 Company Fairness Opinion                                         54
     ........................
5.19 Payments                                                         54
     ........

ARTICLE VI CONDITIONS TO THE MERGER                                   55

6.1  Conditions to the Obligations of Each Party to Effect the Merger 55
     ................................................................
6.2  Additional Conditions to the Obligations of the Company          55
     .......................................................
6.3  Additional Conditions to the Obligations of Parent               56
     ..................................................

ARTICLE VII TERMINATION, AMENDMENT AND WAIVER                         57

7.1  Termination                                                      57
     ...........
7.2  Notice of Termination; Effect of Termination                     59
     ............................................
7.3  Fees and Expenses                                                60
     .................
7.4  Amendment                                                        62
     .........

7.5  Extension; Waiver                                                62
     ................
ARTICLE VIII GENERAL PROVISIONS                                       62

8.1  Non-Survival of Representations and Warranties                   62
     ..............................................
8.2  Notices                                                          62
     .......
8.3  Interpretation; Knowledge                                        64
     .........................
8.4  Counterparts                                                     66
     ............
8.5  Entire Agreement; Third-Party Beneficiaries                      66
     ...........................................
8.6  Severability                                                     66
     ............
8.7  Other Remedies; Specific Performance                             66
     ....................................
8.8  Governing Law                                                    67
     .............
8.9  Rules of Construction                                            67
     .....................
8.10 Assignment                                                       67
     ..........
8.11 Waiver of Jury Trial                                             67






















                         INDEX OF DEFINED TERMS

Defined Term                                Defined in Section
................................             ..................
Acquisition                                 7.3(b)(iii)
Acquisition Proposal                        5.3(g)(i)
Action of Divestiture                       5.6(e)
Affiliate                                   5.12(a)
Agreement                                   Forepart
Approval                                    2.12(c)(ii)
Average Stock Price                         1.6(f)
Certificate of Merger                       1.2
Certificates                                1.7(c)
Change of Recommendation                    5.3(d)
Closing                                     1.2
Closing Date                                1.2
COBRA                                       2.12(b)
Code                                        Recitals
Company                                     Forepart
Company Affiliate                           5.12
Company Balance Sheet                       2.4(b)
Company Benefit Plans                       2.12(a)
Company Board Approval                      2.17
Company Charter Documents                   2.1(b)
Company Common Stock                        1.6(a)
Company Disclosure Letter                   Article II
Company Environmental Permits               2.14(c)
Company Fairness Opinion                    2.18
Company Financials                          2.4(b)
Company Intellectual Property               2.7(a)(ii)
Company Material Contract                   2.15(a)
Company Options                             2.2(b)
Company Permits                             2.8(b)
Company Plans                               5.9(c)
Company Preferred Stock                     2.2(a)
Company Products                            2.7(c)
Company Registered Intellectual Property    2.7(a)(iv)
Company Restricted Stock                    1.6(b)
Company Retirement Plan                     2.12(a)
Company SEC Reports                         2.4(a)
Company Stock Option Plans                  2.12(a)
Company Voting Debt                         2.2(c)
Confidentiality Agreement                   5.4(a)
Contracts                                   2.15(d)
Delaware Law                                Recitals
Dissenting Shares                           1.10
DOJ                                         5.6(a)
DOL                                         2.12(b)
Domain Names                                2.7(a)(i)
Effect                                      8.3(c)
Effective Time                              1.2
Employee                                    2.12(a)
Employment Agreements                       Recitals
End Date                                    7.1(b)(i)
Environmental Law                           2.14(c)
ERISA                                       2.12(c)(i)
Exchange Act                                2.3(c)
Exchange Fund                               1.7(b)
Exchange Ratio                              1.6(a)
FTC                                         5.6(a)
Funded Retirement Plan                      2.12(d)
GAAP                                        2.4(b)
Governmental Entity                         2.3(c)
Hazardous Material                          2.14(a)
Hazardous Materials Activities              2.14(b)
HSR Act                                     2.3(c)
Indemnified Parties                         5.11(a)
Intellectual Property                       2.7(a)(i)
International Employee Plan                 2.12(g)
IRS                                         2.12(b)
Knowledge                                   8.3(b)
Leased Real Property                        2.13(a)
Leases                                      2.13(a)
Legal Requirements                          2.2(d)
Marketplace Rule                            1.6(a)
Material Adverse Effect                     8.3(c)
Merger                                      1.1
Merger Consideration                        1.6(a)
Merger Sub                                  Forepart
Merger Sub Common Stock                     1.6(d)
Nasdaq                                      1.6(f)
Necessary Consents                          2.3(c)
Option Ratio                                5.9(a)
Owned Real Property                         2.13(a)
Parent                                      Forepart
Parent Balance Sheet                        3.4(b)
Parent Charter Documents                    3.1(b)
Parent Common Stock                         1.6(a)
Parent Disclosure Letter                    Article III
Parent Financials                           3.4(b)
Parent Options                              3.2(b)
Parent Preferred Stock                      3.2(a)
Parent Rights                               1.6(a)
Parent Rights Agreement                     1.6(a)
Parent SEC Reports                          3.4(a)
Parent Stock Option Plans                   3.2(b)
Parent Voting Debt                          3.2(c)
Payment Agent                               1.7(a)
Payment Agreement                           5.19
Per Share Amount                            1.6(a)
Per Share Merger Consideration              1.6(a)
Permits                                     2.8(b)
Person                                      8.3(d)
Proxy Statement                             2.16
PTO                                         2.7(b)
Registered Intellectual Property            2.7(a)(iii)
Registration Statement                      2.16
Retirement Benefit Rights                   2.12(d)
Retirement Plan                             2.12(d)
Rights                                      2.15(e)
RoHS Directive                              2.14(b)
Routine Grants                              4.1(b)(iv)
Section 262                                 1.10
Securities Act                              2.4(a)
Spreadsheet                                 5.17
Stockholders' Meeting                       5.2(a)
Subsidiary                                  2.1(a)
Subsidiary Charter Documents                2.1(b)
Superior Offer                              5.3(g)(ii)
Surviving Corporation                       1.1
Tax                                         2.6(a)
Tax Returns                                 2.6(b)
Taxes                                       2.6(a)
Termination Fee                             7.3(b)(i)
Triggering Event                            7.1(d)(iii)
URLs                                        2.7(a)(i)
WEEE Directive                              2.14(b)




                     AGREEMENT AND PLAN OF MERGER

     This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of February 20, 2006, by and among Coherent, Inc., a
Delaware corporation ("Parent"), Spider Acquisition Corporation, a
Delaware corporation and direct wholly-owned subsidiary of Parent
("Merger Sub"), and Excel Technology, Inc., a Delaware corporation (the
"Company").

                                RECITALS
                                ........

     A.  The respective Boards of Directors of Parent, Merger Sub and the
Company have deemed it advisable and in the best interests of their
respective corporations and stockholders that Parent and the Company
consummate the business combination and other transactions provided for
herein in order to advance their respective long-term strategic business
interests.

     B.  The respective Boards of Directors of Parent, Merger Sub and the
Company have approved, in accordance with applicable provisions of the
laws of the state of Delaware ("Delaware Law"), this Agreement and the
transactions contemplated hereby, including the Merger.

     C.  The Board of Directors of the Company has resolved to recommend
to its stockholders approval and adoption of this Agreement and approval
of the Merger.

     D.  Parent, as the sole stockholder of Merger Sub, has approved and
adopted this Agreement and approved the Merger.

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

     NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

                               ARTICLE I
                               THE MERGER

     1.1  The Merger.  At the Effective Time and subject to and upon the
terms and conditions of this Agreement and the applicable provisions of
Delaware Law, Merger Sub shall be merged with and into the Company (the
"Merger"), the separate corporate existence of Merger Sub shall cease and
the Company shall continue as the surviving corporation.  The Company, as
the surviving corporation after the Merger, is hereinafter sometimes
referred to as the "Surviving Corporation."

     1.2  Effective Time; Closing.  Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by
filing a Certificate of Merger with the Secretary of State of the State
of Delaware in accordance with the relevant provisions of Delaware Law
(the "Certificate of Merger") (the time of such filing with the Secretary
of State of the State of Delaware or such later time as may be agreed in
writing by the Company and Parent and specified in the Certificate of
Merger being the "Effective Time") on the Closing Date.  The closing of
the Merger (the "Closing") shall take place at the offices of Wilson
Sonsini Goodrich & Rosati, Professional Corporation, located at 650 Page
Mill Road, Palo Alto, California, at a time and date to be specified by
the parties, which shall be no later than the second business day after
the satisfaction or waiver of the conditions set forth in Article VI
(other than those conditions that by their terms are to be satisfied or
waived at the Closing, but subject to the satisfaction or waiver
thereof), or at such other time, date and location as the parties hereto
agree in writing; provided, however, that if all the conditions set forth
in Article VI shall not have been satisfied or waived on such second
business day, then the Closing shall take place on the first business day
on which all such conditions shall have been satisfied or waived.  The
date on which the Closing occurs is referred to herein as the "Closing
Date."

     1.3  Effect of the Merger.  At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable
provisions of Delaware Law, including Section 259 of the General
Corporation Law of the State of Delaware. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of the Company and
Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.

     1.4  Certificate of Incorporation and Bylaws.  At the Effective
Time, the Certificate of Incorporation of the Surviving Corporation shall
be amended and restated to read the same as the Certificate of
Incorporation of Merger Sub, as in effect immediately prior to the
Effective Time, until thereafter amended in accordance with Delaware Law
and as provided in such Certificate of Incorporation; provided, however,
that at the Effective Time, Article I  of the Certificate of
Incorporation of the Surviving Corporation shall be amended and restated
in its entirety to read as follows:  "The name of the corporation is
Excel Technology, Inc." and, to the extent necessary, the Certificate of
Incorporation shall be amended so as to comply with Section 5.10(a).  At
the Effective Time, the Bylaws of the Surviving Corporation shall be
amended and restated to read the same as the Bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, until thereafter amended
in accordance with Delaware Law and as provided in such Bylaws; provided,
however, that at the Effective Time, the Bylaws shall be amended, to the
extent necessary, so as to comply with Section 5.10(a).

     1.5  Directors and Officers.  The initial directors of the Surviving
Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, until their respective successors are duly elected or
appointed and qualified.  The initial officers of the Surviving
Corporation shall be the officers of Merger Sub immediately prior to the
Effective Time, until their respective successors are duly appointed.

     1.6  Effect on Capital Stock.  Subject to the terms and conditions
of this Agreement, at the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Merger Sub, the Company or the
holders of any shares of capital stock of the Company, the following
shall occur:

          (a)  Company Common Stock.  Each share of the Common Stock, par
value $0.001 per share, of the Company ("Company Common Stock") issued
and outstanding immediately prior to the Effective Time, other than any
shares of Company Common Stock to be canceled pursuant to Section 1.6(c)
and any Dissenting Shares, will be canceled and extinguished and
automatically converted (subject to Section 1.6(f)) into the right to
receive $30.00 in cash, without interest (as may be adjusted, the "Per
Share Amount" and the sum of the Per Share Amounts, the "Merger
Consideration"), upon surrender of the certificate representing such
share of Company Common Stock in the manner provided in Section 1.7 (or
in the case of a lost, stolen or destroyed certificate, upon delivery of
an affidavit (and bond, if required) in the manner provided in Section
1.9).

          (b)  Repurchase Rights.  If any shares of Company Common Stock
outstanding immediately prior to the Effective Time are unvested or are
subject to a repurchase option, risk of forfeiture or other condition
under any applicable restricted stock purchase agreement or other
agreement with the Company ("Company Restricted Stock"), then the portion
of the Merger Consideration payable in exchange for such shares of
Company Common Stock will also be unvested and subject to the same
repurchase option, risk of forfeiture or other condition.  The Company
shall take all action that may be necessary to ensure that, from and
after the Effective Time, the Surviving Corporation is entitled to
exercise any such repurchase option or other right set forth in any such
restricted stock purchase agreement or other agreement.  The portion of
the Merger Consideration payable upon conversion of the Company
Restricted Stock shall be withheld and paid by the Merger Sub to such
holder in accordance with the vesting and other provisions set forth in
the applicable restricted stock purchase agreement or other agreement.

          (c)  Cancellation of Treasury and Parent Owned Stock.  Each
share of Company Common Stock held by the Company or Parent or any direct
or indirect wholly-owned Subsidiary of the Company or of Parent
immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof.

          (d)  Capital Stock of Merger Sub.  Each share of common stock,
par value $0.001, of Merger Sub (the "Merger Sub Common Stock") issued
and outstanding immediately prior to the Effective Time shall evidence
ownership of such shares of capital stock of the Surviving Corporation.


          (e)  Stock Options.  At the Effective Time, no outstanding
Company Options will be assumed by Parent, and unless otherwise exercised
by the holder thereof or purchased by the Company under Section 5.17, any
outstanding Company Options shall terminate on the Effective Time in
accordance with their terms.

          (f)  Adjustments to Per Share Amount.  The Per Share Amount
shall be adjusted to reflect fully the appropriate effect of any stock
split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into Company Common Stock),
reorganization, recapitalization, reclassification or other like change
with respect to Company Common Stock having a record date on or after the
date hereof and prior to the Effective Time.

     1.7  Surrender of Certificates.

          (a)  Payment Agent.  Parent shall select an institution to act
as the payment agent (the "Payment Agent") for the Merger.

          (b)  Parent to Provide Cash.  On or before the Effective Time,
Parent shall make available to the Payment Agent for exchange in
accordance with this Article I , the Merger Consideration deliverable
pursuant to Section 1.6(a) in exchange for the outstanding shares of
Company Common Stock.  Any cash deposited with the Payment Agent shall
hereinafter be referred to as the "Exchange Fund."

          (c)  Exchange Procedures.  As promptly as reasonably
practicable after the Effective Time, Parent shall cause the Payment
Agent to mail to each holder of record (as of the Effective Time) of a
certificate or certificates (the "Certificates") which immediately prior
to the Effective Time represented outstanding shares of Company Common
Stock whose shares were converted into the right to receive a portion of
the Merger Consideration pursuant to Section 1.6(a):  (i) a letter of
transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery
of the Certificates to the Payment Agent and shall be in such form and
have such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for a portion of the Merger Consideration.  Upon surrender of
Certificates for cancellation to the Payment Agent or to such other agent
or agents as may be appointed by Parent, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto and such other documents as may reasonably be
required by the Payment Agent, the holder of record of such Certificates
shall be entitled to receive in exchange therefor the portion of the
Merger Consideration (after taking into account all Certificates
surrendered by such holder of record) to which such holder is entitled
pursuant to Section 1.6(a), and the Certificates so surrendered shall
forthwith be canceled.  Until so surrendered, outstanding Certificates
will be deemed from and after the Effective Time, for all corporate
purposes, to evidence the ownership of the portion of the Merger
Consideration for which such shares of Company Common Stock shall have
been so converted.

          (d)  Required Withholding.  Each of the Payment Agent 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 Company 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 Legal Requirement.  To the extent such amounts are so deducted
or withheld, the amount of such consideration shall be treated for all
purposes under this Agreement as having been paid to the Person to whom
such consideration would otherwise have been paid.

          (e)  No Liability.  Notwithstanding anything to the contrary in
this Section 1.7, neither the Payment Agent, the Surviving Corporation
nor any party hereto shall be liable to a holder of shares of Company
Common Stock for any amount paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.

          (f)  Investment of Exchange Fund.  The Payment Agent shall
invest the cash included in the Exchange Fund as directed by Parent on a
daily basis; provided that no such investment or loss thereon shall
affect the amounts payable to Company stockholders pursuant to this
Article I.  Any interest and other income resulting from such investment
shall become a part of the Exchange Fund, and any amounts in excess of
the amounts payable to Company stockholders pursuant to this Article I
shall promptly be paid to Parent.

          (g)  Termination of Exchange Fund.  Any portion of the Exchange
Fund which remains undistributed to the holders of Certificates nine (9)
months after the Effective Time shall, at the request of Parent or the
Surviving Corporation, be delivered to the Surviving Corporation or
Parent or otherwise according to the instruction of the Surviving
Corporation or Parent, and any holders of the Certificates who have not
surrendered such Certificates in compliance with this Section 1.7 shall
after such delivery to Surviving Corporation look only to Parent or the
Surviving Corporation for the portion of the Merger Consideration
deliverable pursuant to Section 1.6(a) with respect to the shares of
Company Common Stock formerly represented thereby.  If any Certificate
shall not have been surrendered prior to two (2) years after the
Effective Time (or immediately prior to such time as such amounts would
otherwise escheat to or become property of any Governmental Entity), any
such portion of the Exchange Fund remaining unclaimed by holders of
shares of Company Common Stock immediately prior to such time shall, to
the extent permitted by law, become the property of Parent free and clear
of any claims or interest of any Person previously entitled thereto.

      1.8  No Further Ownership Rights in Company Common Stock.  The
Merger Consideration paid upon the surrender for exchange of shares of
Company 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 of Company Common Stock, and there shall be no further
registration of transfers on the records of the Surviving Corporation of
shares of Company Common Stock which 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
canceled and exchanged as provided in this Article I.

     1.9  Lost, Stolen or Destroyed Certificates.  In the event any
Certificates shall have been lost, stolen or destroyed, the Payment Agent
shall deliver in exchange for such lost, stolen or destroyed
Certificates, upon the making of an affidavit of that fact by the holder
thereof, the portion of the Merger Consideration to which the holder
thereof would have been entitled upon the delivery of such Certificate;
provided, however, that Parent or the Payment Agent may, in their sole
discretion and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed Certificates to deliver a
bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against Parent, the Company or the Payment Agent
with respect to the Certificates alleged to have been lost, stolen or
destroyed.

     1.10 Dissenting Shares.  Notwithstanding anything in this Agreement
to the contrary, shares of Company Common Stock which are issued and
outstanding immediately prior to the Effective Time and which are held by
stockholders properly exercising appraisal rights (the "Dissenting
Shares") available under Section 262 ("Section 262") of Delaware Law
shall not be converted into or be exchangeable for the right to receive
the portion of the Merger Consideration for which such shares of Company
Common Stock would otherwise have been entitled, unless and until such
holders shall have failed to perfect or shall have effectively withdrawn
or lost their rights to appraisal under Section 262.  If any such holder
shall have failed to perfect or shall have effectively withdrawn or lost
such right to appraisal, such holder's shares of Company Common Stock
shall thereupon be converted into and be exchangeable only for the right
to receive, as of the Effective Time, the portion of the Merger
Consideration to which such holder would have been entitled pursuant to
this Article I for such shares of Company Common Stock.  The Company
shall give Parent and Merger Sub (a) prompt notice of any written demands
for appraisal of any shares of Company Common Stock, attempted
withdrawals of such demands and any other instruments served pursuant to
Delaware Law and received by the Company relating to rights to be paid
the "fair value" of Dissenting Shares, as provided in Section 262 and (b)
the opportunity to participate in, and after the Closing, direct all
negotiations and proceedings with respect to demands for appraisal under
Section 262.  The Company shall not, except with the prior written
consent of Parent, voluntarily make or agree to make any payment with
respect to any demands for appraisals, or offer to settle or settle any
such demands or approve any withdrawals of any such demands.

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

                               ARTICLE II
             REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to Parent and Merger Sub,
subject to the exceptions specifically disclosed in writing in the
disclosure letter supplied by Company to Parent dated as of the date
hereof (the "Company Disclosure Letter"), as follows:

     2.1  Organization; Standing and Power; Charter Documents;
            Subsidiaries.

          (a)  Organization; Standing and Power.  The Company and each of
its Subsidiaries (i) is a corporation or other organization duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (except, in the case of
good standing, for entities organized under the laws of any jurisdiction
that does not recognize such concept), (ii) has the requisite power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted, and (iii) is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties
makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to so qualify or to be in good standing,
individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on the Company.  For purposes of this
Agreement, "Subsidiary," when used with respect to any party, shall mean
any corporation or other organization, whether incorporated or
unincorporated, at least a majority of the securities or other interests
of which having by their terms ordinary voting power to elect a majority
of the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries.

          (b)  Charter Documents.  The Company has furnished to Parent:
(i) a true and correct copy of the Certificate of Incorporation and
Bylaws of the Company, each as amended to date (collectively, the
"Company Charter Documents") and (ii) the certificate of incorporation
and bylaws, or like organizational documents (collectively, "Subsidiary
Charter Documents"), of each of its Subsidiaries, and each such
instrument is in full force and effect.  The Company is not in violation
of any of the provisions of the Company Charter Documents and no
Subsidiary of the Company is in violation of its respective Subsidiary
Charter Documents.

          (c)  Minutes. The Company has furnished to Parent and its
representatives true and complete copies of the minutes of all meetings
of the stockholders, the Board of Directors and each committee of the
Board of Directors of the Company and each of its Subsidiaries held since
December 31, 2002.

          (d)  Subsidiaries.  Section 2.1(d) of the Company Disclosure
Letter sets forth each Subsidiary of the Company.  All the outstanding
shares of capital stock of, or other equity or voting interests in, each
such Subsidiary have been validly issued and are fully paid and
nonassessable and, except as set forth in the footnotes to Section 2.1(d)
of the Company Disclosure Letter, are owned by the Company, a wholly-
owned Subsidiary of the Company, or the Company and another wholly-owned
Subsidiary of the Company, free and clear of all pledges, claims, liens,
charges, encumbrances, options and security interests of any kind or
nature whatsoever (any, a "Lien"), including any restriction on the right
to vote, sell or otherwise dispose of such capital stock or other
ownership interests, except for restrictions imposed by applicable
securities laws, and are duly authorized, validly issued, full paid and
nonassessable.  Other than the Subsidiaries of the Company, except as set
forth in Section 2.1(d) of the Company Disclosure Letter, neither the
Company nor any of its Subsidiaries owns any capital stock of, or other
equity or voting interests of any nature in, or any interest convertible,
exchangeable or exercisable for, capital stock of, or other equity or
voting interests of any nature in, any other Person.

     2.2  Capital Structure.

          (a)  Capital Stock.  The authorized capital stock of Company
consists of:  (i) 20,000,000 shares of Company Common Stock, par value
$0.001 per share and (ii) 2,000,000 shares of preferred stock, par value
$0.001 per share (the "Company Preferred Stock").  At the close of
business on the date hereof:  (i) 12,058,329 shares of Company Common
Stock were issued and outstanding, excluding shares of Company Common
Stock held by the Company in its treasury, (ii) no shares of Company
Common Stock were issued and held by the Company in its treasury, and
(iii) no shares of Company Preferred Stock were issued and outstanding.
No shares of Company Common Stock are owned or held by any Subsidiary of
the Company.  All of the outstanding shares of capital stock of the
Company are, and all shares of capital stock of the Company which may be
issued as contemplated or permitted by this Agreement will be, when
issued, duly authorized and validly issued, fully paid and nonassessable
and not subject to any preemptive rights.  Section 2.2(a) of the Company
Disclosure Letter sets forth a list of each holder of Company Restricted
Stock and (a) the name and location of the holder of such Company
Restricted Stock, (b) the number of shares of Company Restricted Stock
held by such holder, (c) the repurchase price of such Company Restricted
Stock, (d) the date on which such Company Restricted Stock was purchased
or granted, (e) the applicable vesting schedule pursuant to which the
Company's right of repurchase or forfeiture lapses, and (f) the extent to
which such Company right of repurchase or forfeiture has lapsed as of the
date hereof.  There are no commitments or agreements of any character to
which the Company is bound obligating Company to waive its right of
repurchase or forfeiture with respect to any Company Restricted Stock as
a result of the Merger (whether alone or upon the occurrence of any
additional or subsequent events).

          (b)  Stock Options.  As of the close of business on the date
hereof 1,437,676 shares of Company Common Stock are subject to issuance
pursuant to outstanding options to purchase Company Common Stock under
each stock option plan, stock award plan, stock appreciation right plan,
phantom stock plan, stock option, other equity or equity-based
compensation plan, equity or other equity based award to any Person
(whether payable in cash, shares or otherwise) (to the extent not issued
pursuant to any of the foregoing plans) or other plan or Contract of any
nature with any Person (whether or not an Employee) pursuant to which any
stock, option, warrant or other right to purchase or acquire capital
stock of the Company or right to payment based on the value of the
Company capital stock has been granted or otherwise issued (collectively,
"Company Stock Option Plans") (equity or other equity-based awards,
whether payable in cash, shares or otherwise granted under or pursuant to
the Company Stock Option Plans are referred to in this Agreement as
"Company Options").  Section 2.2(b) of the Company Disclosure Letter sets
forth a list of each outstanding Company Stock Option issued, and (a) the
particular Company Stock Option Plan (if any) pursuant to which such
Company Option was granted) (b) the name and location of the holder of
such Company Option, (c) the number of shares of Company Common Stock
subject to such Company Option, (d) the exercise price of such Company
Option, (e) the date on which such Company Option was granted, (f) the
applicable vesting schedule, and the extent to which such Company Option
is vested and exercisable as of the date hereof, and (g) the date on
which such Company Option expires.  All shares of Company Common Stock
subject to issuance under the Company Stock Option Plans, upon issuance
on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully
paid and nonassessable.  Except as set forth in Section 2.2(b) of the
Disclosure Letter, there are no commitments or agreements of any
character to which the Company is bound obligating Company to accelerate
the vesting of any Company Option as a result of the Merger (whether
alone or upon the occurrence of any additional or subsequent events).
There are no outstanding or authorized stock appreciation, phantom stock,
equity based profit participation or other similar rights with respect to
the Company.

          (c)  Voting Debt.  No bonds, debentures, notes or other
indebtedness of the Company or any of its Subsidiaries (i) having the
right to vote on any matters on which stockholders may vote (or which is
convertible into, or exchangeable for, securities having such right) or
(ii) the value of which is any way based upon or derived from capital or
voting stock of the Company, is issued or outstanding as of the date
hereof (collectively, "Company Voting Debt").

          (d)  Other Securities.  Except as otherwise set forth in this
Section 2.2 or the Company Disclosure Letter, as of the date hereof,
there are no securities, options, warrants, calls, rights, contracts,
commitments, agreements, instruments, arrangements, understandings,
obligations or undertakings of any kind to which the Company or any of
its Subsidiaries is a party or by which any of them is bound obligating
Company or any of its Subsidiaries to (including on a deferred basis)
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock, Company Voting Debt or other voting
securities of Company or any of its Subsidiaries, or obligating the
Company or any of its Subsidiaries to issue, grant, extend or enter into
any such security, option, warrant, call, right, commitment, agreement,
instrument, arrangement, understanding, obligation or undertaking. All
outstanding shares of Company Common Stock, all outstanding Company
Options, and all outstanding shares of capital stock of, or equity
interest in, each Subsidiary of the Company have been issued and granted
in compliance in all material respects with (i) all applicable securities
laws and all other applicable Legal Requirements and (ii) all
requirements set forth in applicable material Contracts.  Except for
shares of Restricted Stock, there are not any outstanding Contracts of
the Company or any of its Subsidiaries to (i) repurchase, redeem or
otherwise acquire any shares of capital stock of, or other equity or
voting interests in, the Company or any of its Subsidiaries or (ii)
dispose of any shares of the capital stock of, or other equity or voting
interests in, any of its Subsidiaries.  The Company is not a party to any
voting agreement with respect to shares of the capital stock of, or other
equity or voting interests in, the Company or any of its Subsidiaries
and, to the Knowledge of the Company, there are no irrevocable proxies
and no voting agreements, voting trusts, rights plans, anti-takeover
plans or registration rights agreements with respect to any shares of the
capital stock of, or other equity or voting interests in, the Company or
any of its Subsidiaries.  For purposes of this Agreement, "Legal
Requirements" shall mean any federal, state, local, municipal, foreign or
other law, statute, constitution, principle of common law, resolution,
ordinance, code, order, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or
otherwise put into effect by or under the authority of any Governmental
Entity.

     2.3  Authority; Non-Contravention; Necessary Consents.

          (a)  Authority.  The Company has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.  The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
has been duly authorized by all necessary corporate action on the part of
the Company and no other corporate proceedings on the part of the Company
are necessary to authorize the execution and delivery of this Agreement
or to consummate the Merger and the other transactions contemplated
hereby, subject only to the approval and adoption of this Agreement and
the approval of the Merger by the Company's stockholders and the filing
of the Certificate of Merger pursuant to Delaware Law.  The affirmative
vote of the holders of a majority of the outstanding shares of Company
Common Stock to approve and adopt this Agreement and approve the Merger
is the only vote of the holders of any class or series of Company capital
stock necessary to approve and adopt this Agreement, approve the Merger
and consummate the Merger and the other transactions contemplated hereby
(the "Company Stockholder Approval").  This Agreement has been duly
executed and delivered by the Company and, assuming due execution and
delivery by Parent and Merger Sub, constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms.

          (b)  Non-Contravention.  The execution and delivery of this
Agreement by the Company does not, and performance of this Agreement by
the Company will not:  (i) conflict with or violate the Company Charter
Documents or any Subsidiary Charter Documents, (ii) subject to obtaining
the approval and adoption of this Agreement and the approval of the
Merger by the Company's stockholders as contemplated in Section 5.2 and
compliance with the requirements set forth in Section 2.3(c), conflict
with or violate any material Legal Requirement applicable to the Company
or any of its Subsidiaries or by which the Company or any of its
Subsidiaries or any of their respective properties is bound or affected,
or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under,
or materially impair the Company's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company or
any of its Subsidiaries pursuant to, any Company Material Contract.
Section 2.3(b) of the Company Disclosure Letter lists all consents,
waivers and approvals under any of the Company's or any of its
Subsidiaries' Contracts required to be obtained in connection with the
consummation of the transactions contemplated hereby, which, if
individually or in the aggregate were not obtained, would result in a
material loss of benefits to the Company, Parent or the Surviving
Corporation as a result of the Merger.

          (c)  Necessary Consents.  No consent, approval, order or
authorization of, or registration, declaration or filing with any
supranational, national, state, municipal, local or foreign government,
any instrumentality, subdivision, court, administrative agency or
commission or other governmental authority or instrumentality, or any
quasi-governmental or private body exercising any regulatory, taxing,
importing or other governmental or quasi-governmental authority (a
"Governmental Entity") or any other Person is required to be obtained or
made by the Company in connection with the execution and delivery of this
Agreement or the consummation of the Merger and other transactions
contemplated hereby, except for:  (i) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in
which the Company and/or Parent are qualified to do business, (ii) the
filing of the Proxy Statement with the SEC in accordance with the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iii)
such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal,
foreign and state securities (or related) laws and the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and
satisfaction of such other requirements of the comparable laws of other
jurisdictions that the Parent reasonably determines to apply, and (iv)
such other consents, authorizations, filings, approvals and registrations
which if not obtained or made would not be material to the Company,
Parent or Merger Sub or materially adversely affect the ability of the
parties hereto to consummate the Merger within the time frame in which
the Merger would otherwise be consummated in the absence of the need for
such consent, approval, order, authorization, registration, declaration
or filings.  The consents, approvals, orders, authorizations,
registrations, declarations and filings set forth in (i) through (iv) are
referred to herein as the "Necessary Consents."

     2.4  SEC Filings; Financial Statements; Controls

          (a)  SEC Filings.  The Company has filed all required
registration statements, prospectuses, reports, schedules, forms,
statements and other documents (including exhibits and all other
information incorporated by reference) required to be filed by it with
the SEC since December 31, 2001.  All such required registration
statements, prospectuses, reports, schedules, forms, statements and other
documents (including those that the Company may file subsequent to the
date hereof) are referred to herein as the "Company SEC Reports."  As of
their respective dates, the Company SEC Reports (i) were prepared in
accordance and complied in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and regulations of the
SEC thereunder applicable to such Company SEC Reports and (ii) did not at
the time they were filed (or 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 the light of the circumstances under which they
were made, not misleading.  None of the Company's Subsidiaries is
required to file any forms, reports or other documents with the SEC.  The
Company has previously furnished to Parent a complete and correct copy of
any amendments or modifications, which have not yet been filed with the
SEC but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Company with the SEC
pursuant to the Securities Act or the Exchange Act.

          (b)  Financial Statements.  Each of the consolidated financial
statements (including, in each case, any related notes thereto) contained
in the Company SEC Reports (the "Company Financials"), including each
Company SEC Report filed after the date hereof until the Closing:  (i)
complied as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, (ii) was 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 interim financial statements, as may be permitted by the SEC on
Form 10-Q, 8-K or any successor form under the Exchange Act), and (iii)
fairly presented in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as at the
respective dates thereof and the consolidated results of the Company
operations and cash flows for the periods indicated.  The Company does
not intend to correct or restate, nor is there any basis for any
correction or restatement of, any aspect of the Company Financials.  The
balance sheet of the Company contained in the Company SEC Reports as of
September 30, 2005 is hereinafter referred to as the "Company Balance
Sheet."  Except as disclosed in the Company Financials, since the date of
the Company Balance Sheet, neither the Company nor any of its
Subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise) of a nature required to be disclosed on a consolidated balance
sheet or in the related notes to the consolidated financial statement
prepared in accordance with GAAP which are, individually or in the
aggregate, material to the business, results of operations or financial
condition of the Company and its Subsidiaries taken as a whole.

          (c)  Disclosure Controls and Procedures.  The Company has
established and maintains disclosure controls and procedures (as defined
in Rule 13a-15 under the Exchange Act).  Such disclosure controls and
procedures are designed to ensure that material information relating to
the Company, including its Subsidiaries, is made known to the Company's
principal executive officer and its principal financial officer by others
within those entities.  To the knowledge of the Company, based on its
evaluation of the Company's disclosure controls and procedures as of the
end of the Company's most recently completed fiscal quarter, such
disclosure controls and procedures are currently effective in timely
alerting the Company's principal executive officer and principal
financial officer to material information required to be included in the
Company's periodic and current reports required under the Exchange Act.

          (d)  Internal Control Over Financial Reporting.  The Company
has established and maintains a system of internal control over financial
reporting (as defined in Rule 13a-15 under the Exchange Act).  Based on
its evaluation of its internal control over financial reporting as of the
end of the Company's most recently completed fiscal quarter, such
internal control over financial reporting is sufficient to provide
reasonable assurance regarding the reliability of the Company's financial
reporting and the preparation of the Company's financial statements for
external purposes in accordance with GAAP.  Based on its most recent
evaluation of internal control over financial reporting and, to the
knowledge of the Company, since such evaluation, there are not any
significant deficiencies or material weaknesses known to the Company in
the design or operation of internal control over financial reporting
which could reasonably be expected to adversely affect in a material
respect the Company's ability to record, process, summarize and report
financial information or any material fraud known to the Company that
involves management or other employees who have a significant role in
internal control over financial reporting.  The Company has furnished to
Parent disclosures regarding material weaknesses, significant
deficiencies and fraud involving management or other employees who have a
significant role in internal control over financial reporting since
December 31, 2002.

     2.5  Absence of Certain Changes or Events.  Except as set forth in
Section 2.5 of the Company Disclosure Letter, since the date of the
Company Balance Sheet there has not been:  (i) any Material Adverse
Effect on the Company, (ii) any 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 of its Subsidiaries'
capital stock, or any purchase, redemption or other acquisition by the
Company or any of its Subsidiaries of any of the Company's capital stock
or any other securities of the Company or its Subsidiaries or any
options, warrants, calls or rights to acquire any such shares or other
securities except for repurchases from Employees following their
termination pursuant to the terms of their pre-existing stock option or
purchase agreements, (iii) any split, combination or reclassification of
any of the Company's or any of its Subsidiaries' capital stock; (iv) any
granting by the Company or any of its Subsidiaries of any increase in
compensation or fringe benefits, except for normal increases of cash
compensation in the ordinary course of business consistent with past
practice (other than to directors or executive officers of the Company),
or any payment by the Company or any of its Subsidiaries of any bonus,
except for bonuses made in the ordinary course of business consistent
with past practice (other than to directors or executive officers of the
Company), or any granting by the Company or any of its Subsidiaries of
any increase in severance or termination pay or any entry by the Company
or any of its Subsidiaries into any currently effective employment,
severance, termination or indemnification agreement or any agreement the
benefits of which are contingent or the terms of which are materially
altered upon the occurrence of a transaction involving the Company of the
nature contemplated hereby, (v) entry by the Company or any of its
Subsidiaries into any licensing or other agreement with regard to the
acquisition or disposition of any material Intellectual Property other
than licenses, distribution agreements, advertising agreements,
sponsorship agreements or merchant program agreements entered into in the
ordinary course of business consistent with past practice, (vi) any
amendment with respect to any Company Material Contract in effect, (vii)
any material change by the Company in its accounting methods, principles
or practices, except as required by concurrent changes in GAAP, or (viii)
any material revaluation by the Company of any of its assets, including
writing down the value of capitalized inventory or writing off notes or
accounts receivable other than in the ordinary course of business
consistent with past practice.

     2.6  Taxes

          (a)  Definition.  For the purposes of this Agreement, the term
"Tax" or, collectively, "Taxes" shall mean (i) any and all federal,
state, local and foreign 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,
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) of this Section 2.6(a) 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 clauses (i) or (ii) of this Section 2.6(a) 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.

          (b)  Tax Returns and Audits.

              (i)    The Company and each of its Subsidiaries have
prepared and timely filed all required federal, state, local and foreign
returns, estimates, information statements and reports ("Tax Returns")
relating to any and all Taxes concerning or attributable to the Company,
its Subsidiaries or their respective operations and such Returns are true
and correct and have been completed in accordance with applicable law.
              (ii)   The Company and each of its Subsidiaries have timely
paid all Taxes required to be paid and withheld with respect to their
Employees (and paid over to the appropriate Taxing authority) all federal
and state income taxes, Federal Insurance Contribution Act, Federal
Unemployment Tax Act and other Taxes required to be withheld.

              (iii)  Neither the Company nor any of its Subsidiaries has
been delinquent in the payment of any Tax, nor is there any Tax
deficiency outstanding, assessed or proposed against the Company or any
of its Subsidiaries, nor has the Company or any of its Subsidiaries
executed any waiver of any statute of limitations on or extending the
period for the assessment or collection of any Tax.

              (iv)   No audit or other examination of any Tax Return of
the Company or any of its subsidiaries is presently in progress, nor has
the Company or any of its Subsidiaries been notified of any request for
such an audit or other examination.

              (v)    Neither the Company nor any of its Subsidiaries has
any liabilities for unpaid Taxes which have not been accrued or reserved
on the Company Balance Sheet, whether asserted or unasserted, contingent
or otherwise, and neither the Company nor any of its subsidiaries has
incurred any liability for Taxes since the date of the Company Balance
Sheet other than in the ordinary course of business.

              (vi)   The Company has made available to Parent or its
legal counsel, copies of all Tax Returns for the Company and each of its
Subsidiaries filed for all periods since inception.

              (vii)  There are no Liens on the assets of the Company or
any of its Subsidiaries relating to or attributable to Taxes other than
Liens for Taxes not yet due and payable.  There is no basis for the
assertion of any claim relating or attributable to Taxes which, if
adversely determined, would result in any Lien for Taxes on the assets of
the Company or any of its subsidiaries.

              (viii) None of the assets of the Company or any of its
Subsidiaries is treated as "tax-exempt use property," within the meaning
of Section 168(h) of the Code.

              (ix)   Neither the Company nor any of its Subsidiaries is,
nor has been at any time, a "United States Real Property Holding
Corporation" within the meaning of Section 897(c)(2) of the Code.

              (x)    No adjustment relating to any Return filed by the
Company or any of its Subsidiaries has been proposed formally or, to the
Knowledge of the Company or any of its Subsidiaries, informally by any
tax authority to the Company, any of its Subsidiaries or any
representative thereof.

              (xi)   Neither the Company nor any of its Subsidiaries has
(a) ever been a member of an affiliated group (within the meaning of Code
Section 1504(a)) filing a consolidated federal income Tax Return (other
than a group the common parent of which was Company), (b) ever been a
party to any Tax sharing, indemnification or allocation agreement, nor
does the Company or any of its Subsidiaries owe any amount under any such
agreement (c) any liability for the Taxes of any person (other than
Company or any of its Subsidiaries) under Treas. Reg. Section 1.1502-6
(or any similar provision of state, local or foreign law), as a
transferee or successor, by contract, or otherwise and (d) ever been a
party to any joint venture, partnership or other agreement that could be
treated as a partnership for Tax purposes.

              (xii)  Neither the Company nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled
corporation" in a distribution of stock intended to qualify for tax-free
treatment under Section 355 of the Code (x) in the two years prior to the
date of this Agreement or (y) in a distribution which could otherwise
constitute part of a "plan" or "series of related transactions" (within
the meaning of Section 355(e) of the Code) in conjunction with the
Merger.

              (xiii) [Reserved]

              (xiv)  No claim has ever been made by any taxing authority
in a jurisdiction where the Company or any of its Subsidiaries do not
file Tax Returns that the Company or any of its Subsidiaries is or may be
subject to taxation within that jurisdiction.

              (xv)   Neither the Company nor any of its Subsidiaries has
consummated, has participated in, or is currently participating in any
transaction which was or is a "tax shelter," "listed transaction" or
"reportable transaction" as defined in Sections 6662, 6662A, 6011, 6012
or 6707A of the Code or the Treasury Regulations promulgated thereunder,
including, but not limited to, transactions identified by the Internal
Revenue Service by notice, regulation or other form of published guidance
as set forth in Treasury Regulations Section 1.6011-4(b)(2).

     2.7  Intellectual Property

          (a)  Definitions.  For the purposes of this Agreement, the
following terms have the following meanings:

              (i)    "Intellectual Property" shall mean any or all of the
following and all rights in, arising out of, or associated therewith: (a)
all United States, international and foreign patents and applications
therefor and all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof; (b) all inventions
(whether patentable or not), invention disclosures, improvements, trade
secrets, proprietary information, know how, technology, technical data
and customer lists, and all documentation relating to any of the
foregoing; (c) all copyrights, copyrights registrations and applications
therefor, and all other rights corresponding thereto throughout the
world; (d) all mask works, mask work registrations and applications
therefor, and any equivalent or similar rights in semiconductor masks,
layouts, architectures or topology; (e) domain names, uniform resource
locators ("URLs") and other names and locators associated with the
Internet (collectively, "Domain Names"), (f) all computer software,
including all source code, object code, firmware, development tools,
files, records and data, and all media on which any of the foregoing is
recorded; (g) all industrial designs and any registrations and
applications therefor throughout the world; (h) all trade names, logos,
common law trademarks and service marks, trademark and service mark
registrations and applications therefor throughout the world; (i) all
databases and data collections and all rights therein throughout the
world; (j) all moral and economic rights of authors and inventors,
however denominated, throughout the world, and (k) any similar or
equivalent rights to any of the foregoing anywhere in the world.

              (ii)   "Company Intellectual Property" shall mean any
Intellectual Property that is owned by, or created, invented, authored or
acquired by, or exclusively licensed to, the Company or any of its
Subsidiaries.

              (iii)  "Registered Intellectual Property" shall mean all
United States, international and foreign: (a) patents and patent
applications (including provisional applications); (b) registered
trademarks, applications to register trademarks, intent-to-use
applications, or other registrations or applications related to
trademarks; (c) registered copyrights and applications for copyright
registration; (d) Domain Name Registrations; and (e) any other
Intellectual Property that is the subject of an application, certificate,
filing, registration or other document issued, filed with, or recorded by
any Governmental Authority.

              (iv)   "Company Registered Intellectual Property" shall
mean all of the Registered Intellectual Property owned by, or filed in
the name of, the Company or any of its Subsidiaries.

          (b)  Registered Intellectual Property; Proceedings.  Section
2.7(b) of the Company Disclosure Letter sets forth (a) all Company
Registered Intellectual Property and specifies, where applicable, the
jurisdictions in which each such item of Company Registered Intellectual
Property has been issued, applied for or registered, and (b) all
proceedings or actions before any court or tribunal (including the United
States Patent and Trademark Office (the "PTO") or equivalent authority
anywhere else in the world) related to any of the Company Registered
Intellectual Property.

          (c)   Company Products.  Section 2.7(c) of the Company
Disclosure Letter sets forth a list (by name) of all products or service
offerings of the Company or any of its Subsidiaries (collectively,
"Company Products") that currently or within the 90-day period preceding
the date hereof have been sold, offered for sale, distributed or
otherwise disposed of or which the Company or any of its Subsidiaries
currently intends to license, sell, offer for sale or otherwise
distribute in the future, including any products or service offerings
under development.

          (d)  No Order.  Except as set forth in Section 2.7(d) of the
Company Disclosure Letter, no Company Intellectual Property or Company
Product is subject to any proceeding or outstanding order, Contract or
stipulation restricting in any manner the use, transfer, or licensing
thereof by Company or any of its Subsidiaries, or which may affect the
validity, use or enforceability of such Company Intellectual Property or
Company Product.

          (e)  Registration. Each item of Company Registered Intellectual
Property is valid and subsisting, all necessary registration, maintenance
and renewal fees currently due in connection with such Company Registered
Intellectual Property have been made and all necessary documents,
recordations and certificates in connection with such Company Registered
Intellectual Property have been filed with the relevant patent,
copyright, trademark or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of prosecuting,
maintaining or perfecting such Company Registered Intellectual Property.

          (f)  Further Actions.  Section 2.7(f) of the Company Disclosure
Letter sets forth a list of all actions that are required to be taken by
the Company within 120 days of the date hereof with respect to any of the
Company Registered Intellectual Property.

          (g)  Absence of Liens. The Company owns and has good and
exclusive title to each item of Company Intellectual Property owned by
it, free and clear of any Liens (excluding non-exclusive licenses and
related restrictions granted in the ordinary course of business
consistent with past practice).

          (h)  Third-Party Development.  To the extent that any product,
technology, software or Intellectual Property has been developed or
created independently or jointly (with the Company) by a third party for
the Company or any of its Subsidiaries, or is incorporated into any of
the Company Products, the Company and its Subsidiaries have a written
agreement (which is listed on Section 2.7(j)(ii) of the Company
Disclosure Letter) with such third party with respect thereto and, except
as set forth in Section 2.7(h) of the Company Disclosure Letter the
Company and its Subsidiaries thereby either (a) have obtained ownership
of, and are the exclusive owners of, or (b) have obtained perpetual, non-
terminable licenses (sufficient for the conduct of its business as
currently conducted and as proposed to be conducted) to all such third
party's Intellectual Property in such work, material or invention by
operation of law or by valid assignment, to the fullest extent it is
legally possible to do so.

          (i)  Transfers.  Neither the Company nor any of its
Subsidiaries has transferred ownership of, or granted any exclusive
license with respect to, any Intellectual Property that is or was Company
Intellectual Property, to any third party.  Neither the Company nor any
of its Subsidiaries has permitted the Company's rights in such Company
Intellectual Property to lapse or enter the public domain except where
such Intellectual Property is not material to the Company and the Company
has made a reasonable business judgment to permit such Company
Intellectual Property to lapse or enter the public domain.

          (j)  Licenses. Section 2.7(j)(i) of the Company Disclosure
Letter sets forth a list of all contracts, licenses and agreements to
which the Company or any of its Subsidiaries is a party with respect to
Company Intellectual Property licensed, disclosed or transferred to any
third party or under which any third party has otherwise been granted or
has any right with respect to any Company Intellectual Property ("Out-
Licenses").  Section 2.7(j)(ii) of the Company Disclosure Letter sets
forth a list of all contracts, licenses and agreements to which the
Company or any of its Subsidiaries is a party ("In-Licenses"), other than
"shrink wrap" and similar widely available commercial end-user licenses,
pursuant to which a third party has licensed, extended or permitted to
use or transferred, any Intellectual Property to the Company or any of
its Subsidiaries.  The Out-Licenses together with the In-Licenses, the
"Company IP Licenses".

          (k)  No Conflict.  All Company IP Licenses are in full force
and effect.  The consummation of the transactions contemplated by this
Agreement will neither violate nor result in the breach, modification,
cancellation, termination, suspension of, or acceleration of any payments
with respect to, any Company IP Licenses.  Each of the Company and its
Subsidiaries is in material compliance with, and has not materially
breached any term of any Company IP License and, to the Knowledge of the
Company, all other parties to the Company IP Licenses are in compliance
with, and have not materially breached any term of, any Company IP
Licenses.  Following the Closing Date, the Surviving Corporation will be
permitted to exercise all of the Company's and its Subsidiaries' rights
under the Company IP Licenses to the same extent the Company and its
Subsidiaries would have been able to had the transactions contemplated by
this Agreement not occurred and without the payment of any additional
amounts or consideration other than ongoing fees, royalties or payments
which the Company or any of its Subsidiaries would otherwise be required
to pay.  Neither this Agreement nor the transactions contemplated by this
Agreement, including the assignment to Parent or Merger Sub by operation
of law or otherwise of any contracts or agreements to which the Company
or any of its Subsidiaries are a party, will result in (A) either Parent
or the Merger Sub granting to any third party any right to or with
respect to any material Intellectual Property right owned by, or licensed
to, either of them, (B) either Parent or Merger Sub being bound by, or
subject to, any non-compete or other material restriction on the
operation or scope or their respective businesses, or (C) either Parent
or Merger Sub being obligated to pay any royalties or other material
amounts to any third party in excess of those payable by Parent or Merger
Sub, respectively, prior to the Closing.

          (l)  No Infringement.  The operation of the business of the
Company and its Subsidiaries as such business was conducted prior hereto,
as currently is conducted, and reasonably contemplated to be conducted,
including (a) the Company's and its Subsidiaries' design, development,
manufacture, distribution, reproduction, marketing or sale of the
products, software or services of the Company and its Subsidiaries
(including Company Products), and (b) the Company's use of any product,
device or process, has not, does not and will not infringe or
misappropriate the Intellectual Property of any third party or,
constitute unfair competition or unfair trade practices under the laws of
any jurisdiction.

          (m)  All Necessary Intellectual Property.  The Company
Intellectual Property constitutes all the material Intellectual Property
used in and/or necessary to the conduct of the business of the Company
and its Subsidiaries as it currently is conducted, and as it is currently
planned to be conducted by the Company and its Subsidiaries, including
the design, development, manufacture, use, import and sale of products,
technology and performance of services (including the Company Products).

          (n)  No Notice of Infringement. Neither the Company nor any of
its Subsidiaries has received notice from any third party that the
operation of the business of the Company or any of its Subsidiaries or
any act, product or service of the Company or any of its Subsidiaries,
infringes or misappropriates the Intellectual Property of any third party
or constitutes unfair competition or unfair trade practices under the
laws of any jurisdiction.

          (o)  No Third Party Infringement.  Except as set forth in
Section 2.7(o) of the Company Disclosure Letter, to the Knowledge of the
Company, no person has or is infringing or misappropriating any Company
Intellectual Property.

          (p)  Proprietary Information Agreements.  The Company and each
of its Subsidiaries has taken reasonable steps to protect the Company's
and its Subsidiaries' rights in the Company's confidential information
and trade secrets that it wishes to protect or any trade secrets or
confidential information of third parties provided to the Company or any
of its Subsidiaries, and, without limiting the foregoing, each of the
Company and its Subsidiaries has and enforces a policy requiring each
Employee to execute a proprietary information/confidentiality agreement
substantially in the form provided to Parent, and all Employees of the
Company and any of its Subsidiaries have executed such an agreement.  The
Company and its Subsidiaries take reasonable steps to protect the
confidentiality and security of their software, databases, systems,
networks and Internet Sites from any unauthorized use, access,
interruption or modification by third parties.

          (q)  Open Source.  No Company Product uses, incorporates or has
embedded in it any source, object or other software code subject to an
open source license or other similar type of license (including without
limitation, the GNU General Public License, Library Generally Public
License, Lesser General Public License, Mozilla License, Berkeley
Software Distribution License, Open Source Initiative license, MIT,
Apache or Public Domain Licenses), (each an "Open Source License"), and
no software subject to an Open Source License was used in the development
or design of any  Company Product.

          (r)  Source Code Escrow.  Neither the Company nor any of its
Subsidiaries is a party to any Contract which will require that the
computer software source code owned by the Company or any Subsidiary be
released from escrow, or access to such source code otherwise be provided
to any third party, as a result of the execution, delivery or
effectiveness of this Agreement or the consummation of any of the
transactions contemplated by this Agreement.

          (s)  No Defect.  All Company Products are free from any
material defect, bug, malware, virus or programming design or
documentation error or corruptant.

          (t)  Privacy.  The Company and its Subsidiaries fully comply in
all material respects with all relevant laws and regulations, and with
the Company's own policies with respect to the privacy of all users and
customers and any of their personally identifiable information, and no
written claims have been asserted or threatened against the Company or
any of its Subsidiaries by any person alleging a violation of any of the
foregoing.

     2.8  Compliance; Permits

          (a)  Compliance.  Neither the Company nor any of its
Subsidiaries is in conflict with, or in default or in violation of, any
Legal Requirement 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, or the Company believes is
reasonably likely to be, bound or affected, except for those conflicts,
defaults or violations that, individually or in the aggregate, would not
cause the Company to lose any material benefit or incur any material
liability.  No investigation or review by any Governmental Entity is
pending or, to the Knowledge of the Company, has been threatened, against
the Company or any of its Subsidiaries.  There is no material judgment,
injunction, order or decree binding upon the Company or any of its
Subsidiaries which has or would reasonably be expected to have the effect
of prohibiting or materially impairing any business practice of the
Company or any of its Subsidiaries, any acquisition of material property
by the Company or any of its Subsidiaries or the conduct of business by
the Company and its Subsidiaries as currently conducted.

          (b)  Permits.  The Company and its Subsidiaries hold, to the
extent legally required, all material permits, licenses, variances,
clearances, consents, commissions, franchises, exemptions, orders and
approvals from Governmental Entities ("Permits") that are required for
the operation of the business of the Company (collectively, "Company
Permits").  As of the date hereof, no suspension or cancellation of any
of the Company Permits is pending or, to the Knowledge of the Company,
threatened.  The Company and its Subsidiaries are in compliance in all
material respects with the terms of the Company Permits.

     2.9  Litigation.  Except as set forth in Section 2.9 of the Company
Disclosure Letter, there are no claims, suits, actions or proceedings
pending or, to the Knowledge of the Company, threatened against the
Company or any of its Subsidiaries, before any court, governmental
department, commission, agency, instrumentality or authority, or any
arbitrator that seeks to restrain or enjoin the consummation of the
transactions contemplated hereby or which would reasonably be expected,
either singularly or in the aggregate with all such claims, actions or
proceedings, to be material to the Company.

     2.10 Brokers' and Finders' Fees; Fees and Expenses.  Except for fees
payable to UBS Securities LLC pursuant to an engagement letter dated
August 11, 2004, as amended by letter agreement dated July 1, 2005, a
copy of which (including exhibits) has been provided to Parent, the
Company has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby, and, except for an Indemnification Agreement, dated
August 11, 2004, with UBS Securities LLC, the Company has not entered
into an indemnification agreement or arrangement with any Person in
connection with this Agreement and the transactions contemplated hereby.
 An itemized good faith estimate of the fees and expenses of any
accountant, broker, financial advisor, consultant, legal counsel or other
Person retained by the Company in connection with this Agreement or the
transactions contemplated hereby incurred or to be incurred by the
Company in connection with this Agreement and the transactions
contemplated thereby is set forth in Section 2.10 of the Company
Disclosure Letter.

     2.11 Transactions with Affiliates.  Except as set forth in the
Company SEC Reports, since the date of the Company's last proxy statement
filed with the SEC, no event has occurred that would be required to be
reported by the Company pursuant to Item 404 of Regulation S-K
promulgated by the SEC under the Securities Act.

     2.12  Employee Benefit Plans

          (a)  Schedule.  All employee compensation, incentive, fringe or
benefit plans, programs, policies, commitments, contracts (including each
material employment, severance, consulting, relocation, repatriation,
expatriation or other contract between the Company or any Affiliate (as
defined below) and any Employee (as defined below)) or other arrangements
(whether or not set forth in a written document and including, without
limitation, all "employee benefit plans" within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) covering any active, former employee, director or consultant
of Company (an "Employee," which shall for this purpose mean an Employee
of Company or any Affiliate (as defined below)), any subsidiary of
Company or any trade or business (whether or not incorporated) which is a
member of a controlled group or which is under common control with
Company within the meaning of Section 414 of the Code (an "Affiliate"),
or with respect to which Company has or may have liability, are listed in
Section 2.12(a) of the Company Schedule (the "Company Benefit Plans").

         (b)  Documents.  The Company has provided to Parent: (i) correct
and complete copies of all documents embodying each Company Benefit Plan,
including (without limitation) all amendments to each such Company
Benefit Plan, and all material written agreements and contracts relating
to each such Company Benefit Plan (including, but not limited to,
administrative service agreements, group annuity contracts and group
insurance contracts, trust agreements, and policies pertaining to
fiduciary liability insurance covering the fiduciaries for each Company
Benefit Plan); (ii) the three (3) most recent annual reports (Form Series
5500 and all schedules and financial statements attached thereto), if
any, required under ERISA or the Code in connection with each Company
Benefit Plan; (iii) the most recent summary plan description together
with the summary(ies) of material modifications thereto, if any, required
under ERISA with respect to each Plan; (iv) all Internal Revenue Service
(the "IRS") determination, opinion, notification and/or advisory letters;
(v) all correspondence to or from any governmental agency relating to any
Company Benefit Plan; (vi) all forms and notices pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"); (vii) all discrimination tests for each Company Benefit Plan
for the most recent three (3) plan years; (viii) the most recent annual
actuarial valuations, if any, prepared for each Company Employee Plan;
(ix) if the Company Employee Plan is funded, the most recent annual and
periodic accounting of plan assets; (x) all communications to Employees
relating to any Company Employee Plan and any proposed Company Employee
Plan, in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of
payments or vesting schedules, or other events which would result in any
material liability to Company or any Affiliate; and (xi) all registration
statements, annual reports (Form 11-K and all attachments thereto) and
prospectuses prepared in connection with any Company Employee Plan.

          (c)  Compliance.  Company has performed in all material
respects all obligations required to be performed by it under, is not in
default or violation of, and has no knowledge of any default or violation
by any other party to, each Company Employee Plan, and each Company
Employee Plan has been maintained and administered in all material
respects in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations,
including but not limited to ERISA and the Code, which are applicable to
each such plan.  No suit, action or other litigation (excluding claims
for benefits incurred in the ordinary course of plan activities) has been
brought, or to the knowledge of Company is threatened, against or with
respect to any such Company Employee Plan. There are no audits, inquiries
or proceedings pending or, to the knowledge of Company, threatened by the
IRS or Department of Labor (the "DOL") with respect to any Company
Employee Plan. All contributions, reserves or premium payments required
to be made or accrued as of the date hereof to any Company Employee Plan
has been timely made or accrued. Any Company Employee Plan intended to be
qualified under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code: (i) has either obtained a
favorable determination, notification, advisory and/or opinion letter, as
applicable, as to its tax-qualified status from the IRS or still has a
remaining period of time under applicable Treasury Regulations or IRS
pronouncements in which to apply for such letter and to make any
amendments necessary to obtain a favorable determination, and (ii)
incorporates or has been amended to incorporate all provisions required
to comply with the Tax Reform Act of 1986 and subsequent legislation.
Company does not have any plan or commitment to establish any new Company
Employee Plan, to modify any Company Employee Plan (except to the extent
required by law or to conform any such Company Employee Plan to the
requirements of any applicable law, in each case as previously disclosed
to Parent in writing, or as required by this Agreement), or to enter into
any new Company Employee Plan.  Each Company Employee Plan (other than
any stock option plan) can be amended, terminated or otherwise
discontinued after the Effective Time in accordance with its terms,
without liability to Parent, Company or any of its Affiliates (other than
ordinary administration expenses and expenses for benefits accrued but
not yet paid). No Company Employee Plan that is subject to Section 409A
of the Code has been materially modified (as defined under Section 409A
of the Code) since October 3, 2004 and all such non-qualified deferred
compensation plans or arrangements have been operated in good faith
compliance with Section 409A of the Code from December 31, 2004 through
the date hereof.

          (d)  Multiple Employer and Multiemployer Plans.  Neither
Company nor any of its Affiliates has at any time ever maintained,
established, sponsored, participated in, or contributed to any plan
subject to Title IV of ERISA or Section 412 of the Code.  At no time has
Company or any of its Affiliates contributed to or been obligated to
contribute to any "multiemployer plan," as such term is defined in
Section 3(37) of ERISA or to any plan described in Section 413 of the
Code.  Neither Company nor any of its Affiliates, nor any officer or
director of Company or any of its Affiliates is subject to any liability
or penalty under Section 4975 through 4980B of the Code or Title I of
ERISA. No "prohibited transaction," within the meaning of Section 4975 of
the Code or Sections 406 and 407 of ERISA, and not otherwise exempt under
Section 4975 of the Code, and Section 408 of ERISA, has occurred with
respect to any Company Employee Plan which could subject Company or its
Affiliates to material liabilities.

          (e)  Continuation Coverage.  No Company Benefit Plan provides
health benefits (whether or not insured), with respect to Employees after
retirement or other termination of service (other than coverage mandated
by applicable Legal Requirements or benefits, the full cost of which is
borne by the Employee) other than individual arrangements the amounts of
which are not material.

          (f)  International Employee Plans.  Except as set forth in
Section 2.12(f) of the Disclosure Letter, the Company does not now, nor
has it ever had the obligation to, maintain, establish, sponsor,
participate in, or contribute to any International Employee Plan.  As
used in this Agreement, "International Employee Plan" shall mean each
Company Benefit Plan that has been adopted or maintained by the Company
or any Affiliate, whether informally or formally, or with respect to
which the Company or any Affiliate will or may have any liability, for
the benefit of Employees who perform services outside the United States.

          (g)  Effect of Transaction.  Except as set forth in Section
2.12(g) of the Company Disclosure Letter, the execution of this Agreement
and the consummation of the transactions contemplated hereby will not
(either alone or upon the occurrence of any additional or subsequent
events) constitute an event under any Company Benefit Plan that will or
may result in any material payment (whether of severance pay or
otherwise), acceleration of payment, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee.  There is no contract, agreement,
plan or arrangement with an Employee to which the Company or any of its
Subsidiaries is a party as of the date of this Agreement, that,
individually or collectively and as a result of the transaction
contemplated hereby (whether alone or upon the occurrence of any
additional or subsequent events), would reasonably be expected to give
rise to the payment of any amount that would not be deductible pursuant
to Section 280G of the Code.

          (h)  Healthcare Compliance.  Neither the Company nor any
Affiliate has, prior to the Effective Time, violated any of the health
care continuation requirements of COBRA, the requirements of Family
Medical Leave Act of 1993, as amended, or the requirements of the Health
Insurance Portability and Accountability Act of 1996, or any amendment to
each such act, or any similar provisions of state law applicable to its
Employees, except where the violation, individually or in the aggregate,
would not be material the Company.

          (i)  Labor.  The Company is not presently, nor has it been in
the past, a party to, or bound by, any collective bargaining agreement or
union contract with respect to Employees and no collective bargaining
agreement is being negotiated by the Company or any of its Subsidiaries.
 To the Knowledge of the Company, there are no activities or proceedings
of any labor union to organize any Employees.  There is no labor dispute,
strike or work stoppage against the Company or any of its Subsidiaries
pending or, to the Knowledge of the Company, threatened or reasonably
anticipated which may materially interfere with the respective business
activities of the Company or any of its Subsidiaries.  None of the
Company, any of its Subsidiaries or any of their respective
representatives or Employees has committed any material unfair labor
practice in connection with the operation of the respective businesses of
the Company or any of its Subsidiaries. There are no actions, suits,
claims, labor disputes or grievances pending, or, to the knowledge of the
Company, threatened or reasonably anticipated relating to any labor,
safety or discrimination matters involving any Employee, including
charges of unfair labor practices or discrimination complaints, which, if
adversely determined, would, individually or in the aggregate, be
material to the Company.  Neither the Company nor any of its Subsidiaries
has engaged in any unfair labor practices within the meaning of the
National Labor Relations Act.

     2.13 Title to Properties

          (a)  Properties.  Section 2.13(a)(i) of the Company Disclosure
Letter sets forth a list of all real property currently owned by the
Company or any of its Subsidiaries (the "Owned Real Property").  Section
2.13(a)(ii) of the Company Disclosure Letter sets forth a list of all
real property currently leased, licensed, subleased or otherwise occupied
by the Company or any of its Subsidiaries excluding the Owned Real
Property (collectively, the "Leased Real Property"), the name of the
lessor, the date of the relevant occupancy agreement and each amendment
thereto and the aggregate annual rental and/or other fees payable under
any such lease (collectively, the "Leases").  All such current Leases are
in full force and effect, are valid and effective in accordance with
their respective terms, and there is not, under any of such Leases, any
existing default or event of default (or event which with notice or lapse
of time, or both, would constitute a default).   The Leased Real Property
and the Owned Real Property shall be collectively referred to herein as
the "Company Real Property").

          (b)  Condition of Company Real Property.  Except as otherwise
described in Section 2.13(b) of the Company Disclosure Letter: (i) there
are no structural, electrical, mechanical, plumbing, roof, paving or
other defects in any improvements located on any of the Owned Real
Property as could, either individually or in the aggregate, have a
material and adverse effect on the use, development, occupancy or
operation thereof, (ii) to the Knowledge of the Company, there are no
natural or artificial conditions upon any Owned Real Property or any
other facts or conditions which could, in the aggregate, have a material
and adverse effect on the transferability, financeability, ownership,
leasing, use, development, occupancy or operation of any such real
property, (iii) neither the Company nor any of its Subsidiaries has
received any notice from any insurance company of any defects or
inadequacies in any Company Real Property or any part thereof which could
materially and adversely affect the insurability of such property or the
premiums for the insurance thereof, nor has any notice been given by any
insurer of any such property requesting the performance of any repairs,
alterations or other work with which compliance has not been made, and
(iv) there are no pending, or, to the Knowledge of the Company,
threatened condemnation or eminent domain actions or proceedings, or any
special assessments or other activities of any public or quasi-public
body that are reasonably likely to materially and adversely affect the
Owned Real Property.  To the Knowledge of the Company, neither the
Company nor any of its Subsidiaries will be required to incur more than
$100,000 to restore any Leased Real Property at the end of the term of
any Lease.

          (c)  Valid Title.  The Company and each of its Subsidiaries has
good and valid title to, or, in the case of leased properties and assets,
valid leasehold interests in, all of its tangible properties and assets,
real, personal and mixed, used or held for use in its business, free and
clear of any Liens, except for Liens imposed by law in respect of
obligations not yet due which are owed in respect of taxes and Liens
which are not material in character, amount or extent, and which do not
materially detract from the value, or materially interfere with the
present use, of the property subject thereto or affected thereby.

     2.14 Environmental Matters

          (a)  Hazardous Material.  Except as would not reasonably be
expected to result in a material liability to the Company or any of its
Subsidiaries, no underground storage tanks and no amount of any substance
that has been designated by any Governmental Entity or by applicable
foreign, federal, state, provincial or local Legal Requirement to be
radioactive, toxic, hazardous or otherwise a danger to health or the
environment, including PCBs, asbestos, petroleum, toxic mold, urea-
formaldehyde and all substances listed as hazardous substances pursuant
to the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, or defined as a hazardous waste pursuant to the
United States Resource Conservation and Recovery Act of 1976, as amended,
and the regulations promulgated pursuant to said laws, but excluding
office and janitorial supplies properly and safely maintained, (a
"Hazardous Material") are present, as a result of the actions of the
Company or any of its Subsidiaries or any affiliate of the Company, or,
to the Company's Knowledge, as a result of any actions of any third party
or otherwise, in, on or under any property, including the land and the
improvements, ground water and surface water thereof, that the Company or
any of its Subsidiaries has at any time owned, operated, occupied or
leased.

          (b)  Hazardous Materials Activities.  Neither the Company nor
any of its Subsidiaries has transported, stored, used, manufactured,
disposed of, released, removed or exposed its Employees or others to
Hazardous Materials or manufactured any product containing a Hazardous
Material (collectively "Hazardous Materials Activities") in violation, in
any material respect, of any Legal Requirement or in a manner which has
caused or could reasonably be expected to cause an adverse health effect
to any such person.   There are no facts or circumstances likely to
prevent or delay the ability of the Company or any its Subsidiaries to
comply, when required, with the European Directive 2002/96/EC on waste
electrical and electronic equipment ("WEEE Directive") or European
Directive 2002/95/EC on the restriction of the use of certain hazardous
substances in electrical and electronic equipment ("RoHS Directive") and
Section 2.14(b) of the Company Disclosure Letter lists all products of
the Company or any of its Subsidiaries which are subject to the RoHS
Directive which will not be in compliance with the RoHS Directive as of
the Closing.

          (c)  Neither the Company nor any of its Subsidiaries have
entered into any agreement that may require any of them to guarantee,
reimburse, pledge, defend, hold harmless, or indemnify any other party
with respect to any material liabilities arising out of the Hazardous
Material Activities of the Company or any of its Subsidiaries or any
Legal Requirement relating to the environment, natural resources,
pollution, worker safety or exposure of any individual to a Hazardous
Material ("Environmental Law").

          (d)  Permits.  The Company and its subsidiaries currently hold
all Permits (the "Company Environmental Permits") necessary for the
conduct of the Company's and its Subsidiaries' Hazardous Material
Activities and other businesses of the Company and its Subsidiaries as
such activities and businesses are currently being conducted.

          (e)  Environmental Liabilities.  No action, proceeding,
revocation proceeding, amendment procedure, writ or injunction is
pending, and to the Company's Knowledge, no action, proceeding,
revocation proceeding, amendment procedure, writ or injunction has been
threatened by any Governmental Entity, against the Company or any of its
Subsidiaries concerning any Company Environmental Permit, Hazardous
Material or any Hazardous Materials Activity of the Company or any of its
Subsidiaries. The Company is not aware of any fact or circumstance which
could reasonably be expected to result in a material liability to the
Company or any of its Subsidiaries arising out of the Hazardous Materials
Activities of the Company or any of its Subsidiaries or pursuant to any
Environmental Law.

          (f)  Environmental Documents.  The Company has made available
for inspection by Parent and its agents and representatives all records
in the Company's or any Subsidiary's possession or control concerning the
Hazardous Material Activities of the Company or its Subsidiaries, all
environmental assessments, audits, and sampling reports, Company
Environmental Permits, and material correspondence with any Governmental
Entity relating to Environmental Laws.

     2.15  Contracts

          (a)  Material Contracts.  For purposes of this Agreement,
"Company Material Contract" shall mean:

              (i)    any "material contracts" (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC) with respect to the Company
and its Subsidiaries;

              (ii)   any employment or consulting Contract with any
executive officer or other employee of the Company earning an annual
salary in excess of $100,000 or member of the Company's Board of
Directors, other than those that are terminable by the Company or any of
its Subsidiaries on no more than 30 days notice without liability or
financial obligation to the Company;

              (iii)  any Contract or plan, including any stock option
plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
contemplated by this Agreement;

              (iv)   any agreement of indemnification or any guaranty
other than any agreement of indemnification entered into in connection
with the sale or license of hardware or software products in the ordinary
course of business;

              (v)    any Contract containing any covenant (A) limiting in
any respect the right of the Company or any of its Subsidiaries to engage
in any line of business, to make use of any material Intellectual
Property or compete with any Person in any material line of business or
to compete with any person, (B) granting any exclusive distribution
rights, or (C) otherwise having an adverse effect on the right of the
Company and its Subsidiaries to sell, distribute or manufacture any
material products or services or to purchase or otherwise obtain any
material software, components, parts or subassemblies;

              (vi)   any Contract relating to the disposition or
acquisition by the Company or any of its Subsidiaries, after the date of
this Agreement, of a material amount of assets not in the ordinary course
of business or pursuant to which the Company or any of its Subsidiaries
has any material ownership interest in any other Person or other business
enterprise other than the Company's Subsidiaries;

              (vii)  any dealer, distributor, joint marketing or
development agreement under which the Company or any of its Subsidiaries
have continuing material obligations to jointly market any product,
technology or service and which may not be canceled without penalty upon
notice of 30 days or less, or any material agreement pursuant to which
the Company or any of its Subsidiaries have continuing material
obligations to jointly develop any Intellectual Property that will not be
owned, in whole or in part, by the Company or any of its Subsidiaries and
which may not be terminated without liability or financial obligation to
the Company upon notice of 30 days or less;

              (viii) any Contract to provide source code to any third
party for any product or technology that is material to the Company and
its Subsidiaries taken as a whole;

              (ix)   any Contract containing any material support,
maintenance or service obligation on the part of the Company or any of
its Subsidiaries, other than those obligations that are terminable by the
Company or any of its Subsidiaries on no more than 30 days notice without
liability or financial obligation to the Company or its Subsidiaries;

              (x)    any Contract to license any third party to
manufacture or reproduce any of the Company's products, services or
technology or any Contract to sell or distribute any of the Company's
products, services or technology, except agreements with distributors or
sales representative in the ordinary course of business consistent with
past practice and terminable without liability or financial obligation to
the Company upon notice of 30 days or less and substantially in the form
previously provided to Parent;

              (xi)   any mortgages, indentures, guarantees, loans or
credit agreements, security agreements or other Contracts relating to the
borrowing of money or extension of credit, other than accounts
receivables and payables in the ordinary course of business;

              (xii)  any material settlement agreement entered into
within five (5) years prior to the date of this Agreement;

              (xiii) any other agreement, contract or commitment (other
than purchase orders from customers in the ordinary course of business
consistent with past practices for the Company's standard products) that
has a value of $250,000 or more in any individual case or which relates
to one of Company's customers or affiliates listed on Section
2.15(a)(xiii) of the Company Disclosure Letter which sets forth a list of
the Company's top ten customers by related revenue for the four fiscal
quarters ended September 30, 2005; or

              (xiv)  any Contract, or group of Contracts with a Person
(or group of affiliated Persons), the termination or breach of which
would be reasonably expected to have a material adverse effect on any
material division or business unit or other material operating group of
product or service offerings of the Company or otherwise have a Material
Adverse Effect on the Company.

          (b)  Schedule.  Section 2.15(b) of the Company Disclosure
Letter sets forth a list of all Company Material Contracts to which the
Company or any of its Subsidiaries is a party or is bound by as of the
date hereof which are described in Sections 2.15(a)(i) through
2.15(a)(xiv) hereof.

          (c)  No Breach.  All Company Material Contracts are valid and
in full force and effect except to the extent they have previously
expired in accordance with their terms or if the failure to be in full
force and effect, individually or in the aggregate, would not reasonably
be expected to be material to the Company.  Neither the Company nor any
of its Subsidiaries has violated any provision of, or committed or failed
to perform any act which, with or without notice, lapse of time or both
would constitute a default under the provisions of, any Company Material
Contract, except in each case for those violations and defaults which,
individually or in the aggregate, would not reasonably be expected to be
material to the Company.

          (d)  Contracts.  For purposes of this Agreement, "Contracts"
shall mean any written, oral or other agreement, contract, subcontract,
settlement agreement, lease, binding understanding, instrument, note,
option, warranty, purchase order, license, sublicense, insurance policy,
benefit plan or legally binding commitment or undertaking of any nature,
as in effect as of the date hereof or as may hereinafter be in effect.

          (e)  Rights.  Upon consummation of the Merger, Parent will
automatically succeed to, and become entitled to, exercise the Company's
rights and remedies under any Contract to which the Company or any of its
Subsidiaries is a party.

     2.16 Disclosure.  None of the information supplied or to be supplied
by or on behalf of the Company for inclusion or incorporation by
reference in the proxy statement to be filed by the Company with the SEC
(the "Proxy Statement"), will, at the time the Proxy Statement is mailed
to the stockholders of the Company, at the time of the Stockholders'
Meeting or as of the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading.
The Proxy Statement will comply as to form in all material respects with
the provisions of the Exchange Act and the rules and regulations
promulgated by the SEC thereunder.  Notwithstanding the foregoing, no
representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein about Parent
supplied by Parent for inclusion or incorporation by reference in the
Proxy Statement.

     2.17 Board Approval.  The Board of Directors of the Company has, by
resolutions duly adopted by unanimous vote at a meeting of all Directors
duly called and held and not subsequently rescinded or modified in any
way (the "Company Board Approval") has duly (i) determined that the
Merger is fair to, and in the best interests of, the Company and its
stockholders and declared the Merger to be advisable, (ii) approved this
Agreement and the transactions contemplated thereby, including the
Merger, and (iii) recommended that the stockholders of the Company
approve and adopt this Agreement and approve the Merger and directed that
such matter be submitted to Company's stockholders at the Stockholders'
Meeting.

     2.18 Fairness Opinion.  The Company's Board of Directors has
received a written opinion from UBS Securities LLC, dated as of February
17, 2006, in customary form to the effect that, as of such date, the Per
Share Merger Consideration is fair, from a financial point of view, to
the Company stockholders (the "Company Fairness Opinion").

    2.19 Takeover Statutes.  The Board of Directors of the Company has
taken all steps necessary to exclude the applicability of any
"moratorium", "control share acquisition", "business combination", "fair
price" or other form of anti-takeover Legal Requirements of any
jurisdiction that may purport to be applicable to this Agreement and no
such Legal Requirement will apply to Parent or Merger Sub during the
pendency of this Agreement, including the execution, delivery or
performance of this Agreement and the consummation of the Merger and the
other transactions contemplated hereby.

                              ARTICLE III
                REPRESENTATIONS AND WARRANTIES OF PARENT
                            AND MERGER SUB

     Parent and Merger Sub represent and warrant to the Company, subject
to the exceptions specifically disclosed in writing in the disclosure
letter supplied by Parent and Merger Sub to the Company dated as of the
date hereof (the "Parent Disclosure Letter"), as follows:

     3.1  Organization; Standing and Power; Charter Documents;
          Merger Sub.

          (a)  Organization; Standing and Power.  Each of Parent and
Merger Sub is a corporation or other organization duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (except, in the case of good standing, for
entities organized under the laws of any jurisdiction that does not
recognize such concept), has the requisite power and authority to own,
lease and operate its properties and to carry on its business as now
being conducted and is duly qualified or licensed and in good standing to
do business in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such qualification
necessary, other than in such jurisdictions where the failure to be so
organized, existing and in good standing or so qualified, individually or
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Parent.

          (b)  Charter Documents.  Parent has delivered or made available
to the Company a true and correct copy of the Certificate of
Incorporation and Bylaws of Parent and Merger Sub, each as amended to
date (collectively, the "Parent Charter Documents").  Parent is not in
violation of any of the provisions of the Parent Charter Documents.

     3.2  Authority; Non-Contravention; Necessary Consents.

         (a)  Authority.  Each of Parent and Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.  The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Parent and Merger Sub and no other corporate
proceedings on the part of Parent or Merger Sub are necessary to
authorize the execution and delivery of this Agreement or to consummate
the Merger and the other transactions contemplated hereby, subject only
to the approval and adoption of this Agreement and the approval of  the
Merger by Parent as Merger Sub's sole stockholder and the filing of the
Certificate of Merger pursuant to Delaware Law.  This Agreement has been
duly executed and delivered by Parent and Merger Sub and, assuming due
execution and delivery by the Company, constitutes valid and binding
obligations of Parent, enforceable against Parent and Merger Sub in
accordance with its terms.

          (b)  Non-Contravention.  The execution and delivery of this
Agreement by Parent and Merger Sub does not, and performance of this
Agreement by Parent will not:  (i) conflict with or violate the Parent
Charter Documents or the certificate of incorporation or bylaws of Merger
Sub, (ii) subject to compliance with the requirements set forth in
Section 3.2(c), conflict with or violate any material Legal Requirement
applicable to Parent, Merger Sub or any of Parent's other Subsidiaries or
by which Parent, Merger Sub or any of Parent's other Subsidiaries or any
of their respective properties is bound or affected, or (iii) result in
any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or materially impair
Parent's rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on
any of the properties or assets of Parent or any of its Subsidiaries
pursuant to, any Contract to which Parent or any of its Subsidiaries is a
party the termination or breach of which would have a Material Adverse
Effect on Parent.  Section 3.2(b) of the Parent Disclosure Letter lists
all consents, waivers and approvals under any of Parent's Contracts
required to be obtained in connection with the consummation of the
transactions contemplated hereby, which, if individually or in the
aggregate were not obtained, would result in a Material Adverse Effect on
Parent or the Surviving Corporation.

          (c)  Necessary Consents.  No consent, approval, order or
authorization of, or registration, declaration or filing with any
Governmental Entity or any other Person is required to be obtained or
made by Parent in connection with the execution and delivery of this
Agreement or the consummation of the Merger and other transactions
contemplated hereby, except for the Necessary Consents.

     3.3  SEC Filings; Financial Statements.  Each of the consolidated
financial statements (including, in each case, any related notes thereto)
contained in the Form 10-K for the fiscal year ended September 30, 2005
(as amended prior to the date hereof) and the Form 10-Q for the fiscal
quarter ended December 31, 2005 (the "Parent Financials"):  (i) complied
as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, (ii) was prepared in
accordance with 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 interim financial statements, as may be permitted by the SEC
on Form 10-Q, 8-K or any successor form under the Exchange Act), and
(iii) fairly presented in all material respects the consolidated
financial position of Parent and its consolidated Subsidiaries as at the
respective dates thereof and the consolidated results of Parent's
operations and cash flows for the periods indicated.  The balance sheet
of Parent contained in the Form 10-Q for the quarter ended December 31,
2005 as of December 31, 2005 is hereinafter referred to as the "Parent
Balance Sheet."  Except as disclosed in the Parent Financials, since the
date of the Parent Balance Sheet, neither Parent nor any of its
Subsidiaries has any liabilities required under GAAP to be set forth on a
consolidated balance sheet (absolute, accrued, contingent or otherwise)
which, individually or in the aggregate, would have a Material Adverse
Effect on Parent.

     3.4  Disclosure.  None of the information supplied or to be supplied
by or on behalf of Parent and Merger Sub for inclusion or incorporation
by reference in the Proxy Statement, will, at the time the Proxy
Statement is mailed to the stockholders of Company, the time of the
Stockholders' Meeting or as of the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.  Notwithstanding the foregoing, no representation or warranty
is made by Parent with respect to statements made or incorporated by
reference therein about the Company.

     3.5  Board Approval.  The Board of Directors of Parent has, by
resolutions duly adopted by unanimous vote at a meeting of all Directors
duly called and held and not subsequently rescinded or modified in any
way, duly (i) determined that the Merger is fair to, and in the best
interests of, Parent and its stockholders and declared the Merger to be
advisable, and (ii) approved this Agreement and the transactions
contemplated hereby, including the Merger.

     3.6  No Prior Merger Sub Operations.  Merger Sub was formed solely
for the purpose of effecting the Merger and has not engaged in any
business activities or conducted any operations other than in connection
with the transactions contemplated hereby.

     3.7  Financing.  Parent will have at the Closing, after taking into
account cash on hand of Parent and the Company immediately prior to the
Closing and proceeds from a planned Financing, sufficient cash to satisfy
its obligations under Section 1.7(b).

                               ARTICLE IV
           CONDUCT BY THE COMPANY PRIOR TO THE EFFECTIVE TIME

     4.1  Conduct of Business by the Company.

          (a)  Ordinary Course.  During the period from the date hereof
and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, the Company and each of its
Subsidiaries shall, except as otherwise expressly contemplated by this
Agreement or to the extent that Parent shall otherwise consent in
writing, (i) carry on its business in the usual, regular and ordinary
course, in substantially the same manner as heretofore conducted and in
material compliance with all applicable laws and regulations, (ii) pay
its debts and taxes when due, pay or perform other material obligations
when due, and (iii) use all reasonable efforts consistent with past
practices and policies to (x) preserve intact its present business
organization, (y) keep available the services of its present executive
officers and Employees, and (z) preserve its relationships with
customers, suppliers, licensors, licensees, and others with which it has
business dealings.  In addition, the Company shall promptly notify in
writing Parent of any material adverse event involving its business or
operations.

          (b)  Required Consent.  In addition, without limiting the
generality of Section 4.1(a), except as permitted by the terms of this
Agreement, and except as provided in Article IV of the Company Disclosure
Letter, without the prior written consent of Parent, during the period
from the date hereof and continuing until the earlier of the termination
of this Agreement pursuant to its terms or the Effective Time, the
Company shall not do any of the following, and shall not permit any of
its Subsidiaries to do any of the following:

              (i)     Enter into any new line of business;

              (ii)    Declare, set aside or pay any dividends on or make
any other distributions (whether in cash, stock, equity securities or
property) in respect of any capital stock or split, combine or reclassify
any capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for any capital
stock, other than any such transaction by a wholly-owned Subsidiary of it
that remains a wholly-owned Subsidiary of it after consummation of such
transaction, in the ordinary course of business consistent with past
practice;

              (iii)   Purchase, redeem or otherwise acquire, directly or
indirectly, any shares of its capital stock or the capital stock of its
Subsidiaries, except repurchases of unvested shares at cost in connection
with the termination of the employment relationship with any Employee
pursuant to stock option or purchase agreements in effect on the date
hereof;

              (iv)    Issue, deliver, sell, authorize, pledge or
otherwise encumber any shares of capital stock, Company Voting Debt or
any securities convertible into shares of capital stock or Company Voting
Debt, or subscriptions, rights, warrants or options to acquire any shares
of capital stock or Company Voting Debt or any securities convertible
into shares of capital stock or Company Voting Debt, or enter into other
agreements or commitments of any character obligating it to issue any
such securities or rights, other than:  (A) issuances of Company Common
Stock upon the exercise of Company Options, warrants or other rights of
the Company existing on the date hereof in accordance with their present
terms or granted pursuant to clause (B) hereof, (B) grants of stock
options or other stock based awards of or to acquire, Company Common
Stock granted under the Company Stock Option Plans outstanding on the
date hereof, in each case in the ordinary course of business consistent
with past practices to new hires and which options or stock based awards
have a vesting schedule no more favorable than one-quarter (1/4) on the
first anniversary of the date of hire, and one-forty-eighth (1/48) on
each monthly anniversary of the date of hire thereafter and do not
accelerate, or become subject to acceleration, directly or indirectly, as
a result of the approval or consummation of the Merger and/or termination
of employment following the Merger, but in no event shall the period for
exercisability under such option following termination of employment be
extended beyond 90 days following a termination of employment for any
reason other than retirement, death or total and permanent disability
("Routine Grants");

              (v)     Cause, permit or propose any amendments to the
Company Charter Documents or any of the Subsidiary Charter Documents of
the Company's Subsidiaries;

              (vi)    Acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity or voting interest in or
a portion of the assets of, or by any other manner, any business or any
Person or division thereof, or otherwise acquire or agree to acquire any
assets which are material, individually or in the aggregate, to the
business of the Company;

              (vii)   Enter into any binding agreement, agreement in
principle, letter of intent, memorandum of understanding or similar
agreement with respect to any material joint venture, strategic
partnership or alliance;

              (viii)  Sell, lease, license, encumber or otherwise dispose
of any properties or assets except (A) the sale, lease or disposition
(other than through licensing) of property or assets which are not
material, individually or in the aggregate, to the business of Company
and its subsidiaries or (B) the licenses of current Company Products in
the ordinary course of business and in a manner consistent with past
practice having a term of less than or equal to 12 months, and having no
material support, maintenance or service obligation, other than those
obligations that are terminable by the Company or any of its Subsidiaries
on no more than 30 days notice without liability or financial obligation
to the Company;

              (ix)    Make any loans, advances or capital contributions
to, or investments in, any other Person, other than:  (A) loans or
investments by it or a wholly-owned Subsidiary of it to or in it or any
wholly-owned Subsidiary of it, or (B) employee loans or advances for
travel and entertainment expenses made in the ordinary course of business
consistent with past practices;

              (x)     Except as required by GAAP or the SEC as concurred
in by its independent registered public accounting firm, make any
material change in its methods, principles or practices of accounting
since the date of the Company Balance Sheet;

              (xi)    Make any Tax election or accounting method change
that, individually or in the aggregate, is reasonably likely to adversely
affect in any material respect the tax liability or tax attributes of the
Company or any of its subsidiaries or settle or compromise any material
income tax liability or consent to any extension or waiver of any
limitation period with respect to Taxes;

              (xii)   Revalue any of its assets;

              (xiii)  (A) Pay, discharge, settle or satisfy any claims
(including any Tax claim), liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), or litigation (whether
or not commenced prior to the date of this Agreement) other than the
payment, discharge, settlement or satisfaction for money, of claims,
liabilities, obligations or litigation (x) in the ordinary course of
business consistent with past practice or in accordance with their terms,
of claims not in excess of $500,000 individually or $1,000,000 in the
aggregate or (y) to the extent subject to reserves on the Company
Financials existing as of the date hereof in accordance with GAAP, or (B)
waive the benefits of, agree to modify in any manner, terminate, release
any person from or knowingly fail to enforce any confidentiality or
similar agreement to which Company or any of its subsidiaries is a party
or of which Company or any of its subsidiaries is a beneficiary;

              (xiv)   Except as required by Legal Requirements or
Contracts binding on the Company or its Subsidiaries as of the date
hereof, (1) increase in any manner the amount of compensation or fringe
benefits of, or pay any bonus to or grant severance or termination pay
to, any Employee or director of the Company or any Subsidiary of the
Company, (2) make any increase in or commitment to increase any Company
Benefit Plan (including any severance plan), adopt or amend or make any
commitment to adopt or amend any Company Benefit Plan or make any
contribution, other than regularly scheduled contributions, to any
Company Benefit Plan, (3) waive any stock repurchase rights, accelerate,
amend or change the period of exercisability of Company Options or
Company Restricted Stock, or reprice any Company Options or authorize
cash payments in exchange for any Company Options, (4) enter into any
employment, severance, termination or indemnification agreement with any
Employee or enter into any collective bargaining agreement (other than
offer letters and letter agreements entered into in the ordinary course
of business consistent with past practice with employees who are
terminable "at will"), (5) make any material oral or written
representation or commitment with respect to any material aspect of any
Company Benefit Plan that is not materially in accordance with the
existing written terms and provision of such Company Benefit Plan, (6)
grant any stock appreciation right, phantom stock award, stock-related
award or performance award (whether payable in cash, shares or otherwise)
to any Person (including any Company Employee), or (7) enter into any
agreement with any Company Employee the benefits of which are (in whole
or in part) contingent or the terms of which are materially altered upon
the occurrence of a transaction involving Company of the nature
contemplated hereby; provided, however, that nothing herein shall be
construed as prohibiting the Company from (a) granting Company Options
that are Routine Grants;

              (xv)    Grant any exclusive rights with respect to any
Company Intellectual Property;

              (xvi)   Enter into or renew any Contracts containing, or
otherwise subject the Surviving Corporation or Parent to, any non-
competition, exclusivity or other material restrictions on the Company or
the Surviving Corporation or Parent, or any of their respective
businesses, following the Closing;

              (xvii)  Enter into any agreement or commitment the effect
of which would be to grant to a third party following the Merger any
actual or potential right of license to any material Intellectual
Property owned by Parent or any of its Subsidiaries or access to any
source code owned by the Company;

              (xviii) Hire employees other than in the ordinary course of
business consistent with past practice;

              (xix)   Incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person, issue or sell any debt
securities or options, warrants, calls or other rights to acquire any
debt securities of the Company or any of its Subsidiaries, guarantee any
debt securities of another Person, enter into any "keep well" or other
agreement to maintain any financial statement condition of any other
Person (other than any wholly-owned Subsidiary of it) or enter into any
arrangement having the economic effect of any of the foregoing, other
than in connection with the financing of ordinary course trade payables
consistent with past practice;

              (xx)    Make any individual or series of related payments
outside of the ordinary course of business or make or commit to make
capital expenditures beyond those contained in the Company's capital
expenditure budget in effect on the date hereof, a copy of which is
included in Section 4.1(b)(xxi) of the Company Disclosure Letter ;

              (xxi)   Enter into, modify or amend in a manner adverse in
any material respect to the Company, or terminate any Company Material
Contract currently in effect, or waive, release or assign any material
rights or claims thereunder, in each case, in a manner adverse in any
material respect to the Company, other than any modification, amendment
or termination of any such Company Material Contract in the ordinary
course of business, consistent with past practice;

              (xxii)  Enter into any Contract requiring the Company or
any of its Subsidiaries to pay in excess of an aggregate of $1,500,000
individually, or $5,000,000 in the aggregate;

              (xxiii) Agree in writing or otherwise to take any of the
actions described in (i) through (xxii) above.

                               ARTICLE V
                         ADDITIONAL AGREEMENTS

     5.1  Proxy Statement.

     As promptly as practicable after the execution of this Agreement,
the Company shall prepare, and file with the SEC, the Proxy Statement
relating to the Company Stockholder Approval.  Parent shall provide
promptly to the Company such information concerning Parent as, in the
reasonable judgment of Parent, the Company or their respective counsel,
may be required or appropriate for inclusion in the Proxy Statement, or
in any amendments or supplements thereto.  At the earliest practicable
time following the later of (i) receipt and resolution of SEC comments
thereon, or (ii) the expiration of the 10-day waiting period provided in
Rule 14a-6(a) promulgated under the Exchange Act, the Company shall file
definitive proxy materials with the SEC and cause the Proxy Statement to
be mailed to its stockholders.  The Company will use commercially
reasonable efforts to cause all documents that it is responsible for
filing with the SEC or other regulatory authorities in connection with
the Merger (or as required or appropriate to facilitate the Merger) to
comply in all material respects with all applicable Legal Requirements.
Prior to filing the preliminary proxy materials, definitive proxy
materials or any other filing with the SEC, any other Governmental Entity
or other regulatory authorities, the Company shall provide Parent (which
term shall in all instances in this Section 3.1 also include Parent's
counsel) with reasonable opportunity to review and comment on each such
filing in advance and the Company shall in good faith consider including
in such filings all comments reasonably proposed by Parent.  The Company
will notify Parent promptly of the receipt of any comments from the SEC
or its staff (or of notice of the SEC's intent to review the Proxy
Statement) and of any request by the SEC or its staff or any other
government or regulatory officials for amendments or supplements to the
Proxy Statement or any other filing or for additional/supplemental
information, and will supply Parent with copies of all correspondence
between the Company or any of its representatives, on the one hand, and
the SEC, or its staff or any other government or regulatory officials, on
the other hand, with respect to the Proxy Statement or any such other
filing.  The Company and its outside counsel shall permit Parent to
participate in all communications with the SEC and its staff (including
all meetings and telephone conferences) relating to the Proxy Statement,
this Agreement or the Merger.  The Company shall consult with Parent
prior to responding to any comments or inquiries by the SEC, any other
Governmental Entity or regulatory authority with respect to any filings
related to (or necessary or appropriate to facilitate) the Merger, shall
provide Parent with reasonable opportunity to review and comment on any
such written response in advance and shall in good faith consider
including in such response all comments reasonably proposed by Parent.
Whenever any event occurs that is required to be set forth in an
amendment or supplement to the Proxy Statement or any other filing, the
Company shall promptly inform Parent of such occurrence, provide Parent
with reasonable opportunity to review and comment on any such amendment
or supplement in advance, shall in good faith consider including in such
amendment or supplement all comments reasonably proposed by Parent, and
shall cooperate in filing with the SEC or its staff, any other
Governmental Entity or regulatory authority, and/or mailing to the
stockholders of the Company, such amendment or supplement.

     5.2  Meeting of Company Stockholders; Board Recommendation.

          (a)  Meeting of Company Stockholders.  Promptly after the date
hereof, the Company will take all action necessary in accordance with
Delaware Law and its Certificate of Incorporation and Bylaws to call,
hold and convene a meeting of its stockholders to consider adoption and
approval of this Agreement and approval of the Merger (the "Stockholders'
Meeting").  The Stockholder's Meeting shall be held as promptly as
practicable, and in any event (to the extent permissible under applicable
law) within 45 days after the Proxy Statement is cleared by the SEC (or
if no SEC comments are received on or prior to the expiration of the 10-
day waiting period provided in Rule 14a-6(a) promulgated under the
Exchange Act, within 55 days after such initial filing).  Subject to
Section 5.3(d), the Company will use all reasonable efforts to solicit
from its stockholders proxies in favor of the adoption and approval of
this Agreement and the approval of the Merger, and will take all other
action necessary or advisable to secure the vote or consent of its
stockholders required by the rules of Nasdaq or Delaware Law to obtain
such approvals.  Notwithstanding anything to the contrary contained in
this Agreement, the Company may adjourn or postpone the Stockholders'
Meeting to the extent necessary to ensure that any necessary supplement
or amendment to the Proxy Statement is provided to its stockholders in
advance of a vote on the Merger and this Agreement or if, as of the time
for which the Stockholders' Meeting is originally scheduled (as set forth
in the Proxy Statement), there are insufficient shares of Company Common
Stock represented (either in person or by proxy) to constitute a quorum
necessary to conduct the business of such Stockholders' Meeting or there
are not sufficient votes for the adoption of this Agreement and the
approval of the Merger.  The Company shall ensure that the Stockholders'
Meeting is called, noticed, convened, held and conducted, and that all
proxies solicited by it in connection with the Stockholders' Meeting are
solicited in compliance with Delaware Law, its Certificate of
Incorporation and Bylaws, the rules of Nasdaq and all other applicable
Legal Requirements.

          (b)  Board Recommendation.  Except to the extent expressly
permitted by Section 5.3(d):  (i) the Board of Directors of the Company
shall unanimously recommend that its stockholders vote in favor of
adoption and approval of this Agreement and approval of the Merger at the
Stockholders' Meeting, (ii) the Proxy Statement shall include a statement
to the effect that the Board of Directors of the Company has unanimously
recommended that the Company's stockholders vote in favor of adoption and
approval of this Agreement and approval of the Merger at the
Stockholders' Meeting, and (iii) neither the Board of Directors of the
Company nor any committee thereof shall withdraw, amend or modify, or
propose or resolve to withdraw, amend or modify, in a manner adverse to
Parent and Merger Sub, the unanimous recommendation of its Board of
Directors that the Company's stockholders vote in favor of adoption and
approval of this Agreement and the Merger.  Without limitation, the
recommendation of the Board of Directors of the Company shall be deemed
to have been modified in a manner adverse to Parent if the recommendation
shall no longer be unanimous.

     5.3  Acquisition Proposals.

          (a)  No Solicitation.  Except to the extent expressly permitted
by Section 5.3(c), the Company agrees that neither it nor any of its
Subsidiaries, nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall not permit its and its
Subsidiaries' Employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) to, directly or indirectly:  (i) solicit, initiate,
encourage, knowingly facilitate or induce any inquiry with respect to, or
the making, submission or announcement of, any Acquisition Proposal, (ii)
participate in any discussions or negotiations regarding, or furnish to
any Person any nonpublic information with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to, any Acquisition
Proposal, (iii) engage in discussions with any Person with respect to any
Acquisition Proposal, except as to the existence of these provisions,
(iv) approve, endorse or recommend any Acquisition Proposal (except to
the extent specifically permitted pursuant to Section 5.3(d)), (v)
release any third Person from any confidentiality or standstill agreement
to which the Company is a party (or its investment banker on behalf of
the Company), or fail to enforce or grant any material waiver, consent or
request to, any Acquisition Proposal, under such agreement, or (vi) enter
into any letter of intent or similar document or any contract agreement
or commitment contemplating or otherwise relating to any Acquisition
Proposal or transaction contemplated thereby.  The Company and its
Subsidiaries will immediately cease any and all existing activities,
discussions or negotiations with any third parties conducted heretofore
with respect to any Acquisition Proposal.  The Company acknowledges that
any violation of the restrictions set forth in this Section 5.3(a)by any
officer, director, employee, representative, investment banker, attorney,
accountant or agent of the Company or any of its Subsidiaries shall be
deemed to be a breach of this Section 5.3(a) by the Company.

           (b)  Notification of Unsolicited Acquisition Proposals.

              (i)     As time is of the essence, as promptly as
practicable (and in any event no later than 24 hours) after receipt of
any Acquisition Proposal or any request for nonpublic information or
inquiry which it reasonably believes would lead to an Acquisition
Proposal, the Company shall provide Parent with oral and written notice
of the material terms and conditions of such Acquisition Proposal,
request or inquiry, and the identity of the Person or group making any
such Acquisition Proposal, request or inquiry and a copy of all written
materials provided in connection with such Acquisition Proposal, request
or inquiry.
              (ii)    As time is of the essence, the Company shall
provide Parent with two (2) business days prior written notice (or such
lesser prior notice as is provided to the members of its Board of
Directors) of any meeting of the its Board of Directors at which its
Board of Directors is reasonably expected to consider any Acquisition
Proposal.

          (c)  Superior Offers.  Notwithstanding anything to the contrary
contained in Section 5.3(a), in the event that the Company receives an
unsolicited, bona fide written Acquisition Proposal from a third party
that its Board of Directors has in good faith concluded (following
consultation with its outside legal counsel and its financial advisor),
is, or is reasonably likely to result in, a Superior Offer, the Company
may then take the following actions (but only if and to the extent that
the Board of Directors of the Company concludes in good faith, following
the receipt of advice of the Company's outside legal counsel, that the
failure to do so is reasonably likely to result in a breach of its
fiduciary obligations under applicable Legal Requirements):

              (i)     Furnish nonpublic information to the third party
making such Acquisition Proposal, provided that (A) (1) prior to
furnishing any such nonpublic information to such party, the Company
gives Parent no less than 24 hours written notice of its intention to
furnish such nonpublic information and (2) the Company receives from the
third party an executed confidentiality agreement containing customary
limitations on the use and disclosure of all nonpublic written and oral
information furnished to such third party on the Company's behalf, the
terms of which are at least as restrictive as the terms contained in the
Confidentiality Agreement and (B) contemporaneously with furnishing any
such nonpublic information to such third party, the Company furnishes
such nonpublic information to Parent (to the extent such nonpublic
information has not been previously so furnished); and

              (ii)    Engage in negotiations with the third party with
respect to the Acquisition Proposal, provided that no less than 24 hours
prior to entering into negotiations with such third party, the Company
gives Parent written notice of the Company's intention to enter into
negotiations with such third party.

          (d)  Change of Recommendation.  In response to the receipt of a
Superior Offer, the Board of Directors of the Company may withhold,
withdraw, amend or modify its unanimous recommendation in favor of the
Merger and enter into a written agreement memorializing such Superior
Proposal, and, in the case of a Superior Offer that is a tender or
exchange offer made directly to the stockholders of the Company, may
recommend that the stockholders of the Company accept the tender or
exchange offer (any of the foregoing actions, whether by the Board of
Directors of the Company or a committee thereof, a "Change of
Recommendation"), only if all of the following conditions in clauses (i)
through (viii) are met:

              (i)     A Superior Offer with respect to it has been made
and has not been withdrawn;

              (ii)    The Stockholders' Meeting has not occurred;

              (iii)   The Company shall have (A) provided to Parent
written notice which shall state expressly (1) that the Company has
received a Superior Offer, (2) the material terms and conditions of the
Superior Offer and the identity of the Person or group making the
Superior Offer, and (3) that the Company intends to effect a Change of
Recommendation and the manner in which it intends to do so, (B) provided
to Parent a copy of all written materials delivered to the Person or
group making the Superior Offer in connection with such Superior Offer,
and (C) made available to Parent all other materials and information made
available to the Person or group making the Superior Offer in connection
with such Superior Offer;

              (iv)    The Board of Directors of the Company has concluded
in good faith, after receipt of advice of its outside legal counsel,
that, in light of such Superior Offer, the failure of the Board of
Directors to effect a Change of Recommendation is reasonably likely to
result in a breach of its fiduciary obligations to the stockholders of
the Company under applicable law;

              (v)     The Company shall not have breached any of the
provisions set forth in Section 5.2 or this Section 5.3;

              (vi)    At least two (2) business days shall have elapsed
from the provision by the Company to Parent of the information specified
in Section 5.3(d)(iii);

              (vii)   During the two (2) business day period specified in
Section 5.3(d)(vi), the Company negotiates with Parent in good faith with
respect to adjustments to the terms and conditions of this Agreement that
Parent may suggest during such period; and

              (viii)  During or following the two (2) business day period
specified in Section 5.3(d)(vi), the Board of Directors of the Company
does not conclude in good faith (after consultation with its outside
legal counsel and its financial advisor) that such Acquisition Proposal
no longer constitutes a Superior Offer.

          (e)  Continuing Obligation to Call, Hold and Convene
Stockholders' Meeting; No Other Vote.  Notwithstanding anything to the
contrary contained in this Agreement, unless this Agreement is earlier
terminated pursuant to Section 7.1, the obligation of the Company to
call, give notice of, convene and hold the Stockholders' Meeting shall
not be limited or otherwise affected by the commencement, disclosure,
announcement or submission to it of any Acquisition Proposal, or by any
Change of Recommendation and, the Company shall not submit to the vote of
its stockholders any Acquisition Proposal, or propose to do so.

          (f)  Compliance with Tender Offer Rules.  Nothing contained in
this Agreement shall prohibit the Company or its Board of Directors from
taking and disclosing to the stockholders of the Company a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act; provided that the content of any such disclosure thereunder shall be
governed by the terms of this Agreement.  Without limiting the foregoing
proviso, the Company shall not effect a Change of Recommendation unless
specifically permitted pursuant to the terms of Section 5.3(d).

          (g)  Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:

              (i)     "Acquisition Proposal," with respect to the
Company, shall mean any offer or proposal, relating to any transaction or
series of related transactions involving:  (A) any purchase from such
party or acquisition by any Person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) of
more than a ten percent (10%) interest in the total outstanding voting
securities of the Company or any of its Subsidiaries or any tender offer
or exchange offer that if consummated would result in any Person or group
beneficially owning ten percent (10%) or more of the total outstanding
voting securities of the Company or any of its Subsidiaries or any
merger, consolidation, business combination or similar transaction
involving the Company or any of its Subsidiaries, (B) any sale, lease
(other than in the ordinary course of business), exchange, transfer,
license (other than in the ordinary course of business), acquisition or
disposition of more than ten percent (10%) of the assets of the Company
(including its Subsidiaries taken as a whole), or (C) any liquidation or
dissolution of the Company (provided, however, the transactions
contemplated hereby by Parent and Merger Sub shall not be deemed an
Acquisition Proposal); and

              (ii)    "Superior Offer," with respect to the Company,
shall mean an unsolicited, bona fide written offer made by a third party
to acquire, directly or indirectly, pursuant to a tender offer, exchange
offer, merger, consolidation or other business combination, all or
substantially all of the assets of the Company or a majority of the total
outstanding voting securities of the Company as a result of which the
stockholders of the Company immediately preceding such transaction would
hold less than fifty percent (50%) of the equity interests in the
surviving or resulting entity of such transaction or any direct or
indirect parent or subsidiary thereof, on terms that the Board of
Directors of the Company has in good faith concluded (following
consultation with its outside legal counsel and its financial adviser),
taking into account, among other things, all legal, financial, regulatory
and other aspects of the offer and the Person making the offer (including
committed borrowing capacity to the extent necessary to finance such
Acquisition Proposal), to be more favorable, from a financial point of
view, to the Company's stockholders (in their capacities as stockholders)
than the terms of the Merger (taking into account all of the terms of any
proposal by Parent to amend or modify the terms of this Agreement and the
Merger) and is reasonably capable of being consummated without
unreasonable delay.

     5.4  Confidentiality; Access to Information; No Modification of
Representations, Warranties or Covenants.

          (a)  Confidentiality. The parties acknowledge that the Company
and Parent have previously executed a Confidential Disclosure Agreement
dated March 25 2005 (the "Confidentiality Agreement"), which
Confidentiality Agreement will continue in full force and effect in
accordance with its terms and each of Parent and the Company will hold,
and will cause its respective directors, officers, Employees, agents and
advisors (including attorneys, accountants, consultants, bankers and
financial advisors) to hold, any Confidential Information (as defined in
the Confidentiality Agreement) confidential in accordance with the terms
of the Confidentiality Agreement.

          (b)  Access to Information.  The Company shall afford Parent
(and its advisors) reasonable access during normal business hours to the
Company properties, books, records and personnel during the period prior
to the Effective Time to obtain all information concerning its business,
including the status of product development efforts, properties, results
of operations and personnel, as Parent may reasonably request (including
for the purpose of performing such environmental tests and investigations
as Parent may desire); provided, however, that the Company may restrict
the foregoing access to the extent that any law, treaty, rule or
regulation of any Governmental Entity applicable to such party requires
such party or its Subsidiaries to restrict or prohibit access to any such
properties or information.

          (c)  No Modification of Representations and Warranties or
Covenants.  No information or knowledge obtained in any investigation or
notification pursuant to this Section 5.4, Section 5.6 or Section 5.7
shall affect or be deemed to modify any representation or warranty
contained herein, the covenants or agreements of the parties hereto or
the conditions to the obligations of the parties hereto under this
Agreement.

     5.5  Public Disclosure.  Without limiting any other provision of
this Agreement, Parent and the Company will consult with each other
before issuing, and provide each other the opportunity to review, comment
upon and concur with, and use all reasonable efforts to agree on, any
press release or public statement with respect to this Agreement and the
transactions contemplated hereby, including the Merger, and any
Acquisition Proposal and will not issue any such press release or make
any such public statement prior to such consultation and (to the extent
practicable) agreement, except as may be required by law or any listing
agreement with the Nasdaq or any other applicable national or regional
securities exchange or market.  The parties have agreed to the text of
the joint press release announcing the signing of this Agreement.

     5.6  Regulatory Filings; Commercially Reasonable Efforts.

          (a)  Regulatory Filings.  Each of Parent, Merger Sub and the
Company shall coordinate and cooperate with one another and shall each
use all reasonable efforts to comply with, and shall each refrain from
taking any action that would impede compliance with, all Legal
Requirements, and as promptly as practicable after the date hereof, each
of Parent, Merger Sub and the Company shall make all filings, notices,
petitions, statements, registrations, submissions of information,
application or submission of other documents required by any Governmental
Entity in connection with the Merger and the transactions contemplated
hereby, including:  (i) each party using its respective best efforts to
file Notification and Report Forms with the United States Federal Trade
Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice ("DOJ") as required by the HSR Act no later than
two (2) business days following the date hereof, (ii) any other filing
necessary to obtain any Necessary Consent, (iii) filings under any other
comparable pre-merger notification forms reasonably determined by Parent
to be required by the merger notification or control laws of any
applicable jurisdiction, as agreed by the parties hereto, and (iv) any
filings required under the Securities Act, the Exchange Act, any
applicable state securities or "blue sky" laws and the securities laws of
any foreign country, or any other Legal Requirement relating to the
Merger.  Each of Parent and the Company will cause all documents that it
is responsible for filing with any Governmental Entity under this Section
5.6(a) to comply in all material respects with all applicable Legal
Requirements.

          (b)  Exchange of Information.  Parent, Merger Sub and the
Company each shall promptly supply the other with any information which
may be required in order to effectuate any filings or application
pursuant to Section 5.6(a).  Except where prohibited by applicable Legal
Requirements, and subject to the Confidentiality Agreement and any joint
defense agreement entered into between the parties or their counsel, each
of the Company and Parent shall consult with the other prior to taking a
position with respect to any such filing, shall permit the other to
review and discuss in advance, and consider in good faith the views of
the other in connection with any analyses, appearances, presentations,
memoranda, briefs, white papers, arguments, opinions and proposals before
making or submitting any of the foregoing to any Governmental Entity by
or on behalf of any party hereto in connection with any investigations or
proceedings in connection with this Agreement or the transactions
contemplated hereby (including under any antitrust or fair trade Legal
Requirement), coordinate with the other in preparing and exchanging such
information and promptly provide the other (and its counsel) with copies
of all filings, presentations or submissions (and a summary of any oral
presentations) made by such party with any Governmental Entity in
connection with this Agreement or the transactions contemplated hereby,
provided that with respect to any such filing, presentation or
submission, each of Parent and the Company need not supply the other (or
its counsel) with copies (or in case of oral presentations, a summary) to
the extent that any law, treaty, rule or regulation of any Governmental
Entity applicable to such party requires such party or its Subsidiaries
to restrict or prohibit access to any such properties or information.  It
is acknowledged and agreed by the parties hereto that Parent shall have,
except where prohibited by applicable Legal Requirements, primary
responsibility for determining the strategy for dealing with  the FTC,
DOJ, EC or any other Governmental Authority with responsibility for
reviewing the Merger with respect to antitrust or competition issues.

          (c)  Notification.  Each of Parent, Merger Sub and the Company
will notify the other promptly upon the receipt of:  (i) any comments
from any officials of any Governmental Entity in connection with any
filings made pursuant hereto and (ii) any request by any officials of any
Governmental Entity for amendments or supplements to any filings made
pursuant to, or information provided to comply in all material respects
with, any Legal Requirements.  Whenever any event occurs that is required
to be set forth in an amendment or supplement to any filing made pursuant
to Section 5.6(a), Parent, Merger Sub or the Company, as the case may be,
will promptly inform the other of such occurrence and cooperate in filing
with the applicable Governmental Entity such amendment or supplement.

          (d)  Commercially Reasonable Efforts.  Subject to the express
provisions of Section 5.2 and Section 5.3 hereof and upon the terms and
subject to the conditions set forth herein, each of the parties agrees to
use commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including using commercially reasonable efforts to accomplish
the following:  (i) the taking of commercially reasonable acts necessary
to cause the conditions precedent set forth in Article IV to be
satisfied, (ii) the obtaining of all necessary actions or nonactions,
waivers, consents, approvals, orders and authorizations from Governmental
Entities and the making of all necessary registrations, declarations and
filings (including registrations, declarations and filings with
Governmental Entities, if any) and the taking of all reasonable steps as
may be necessary to avoid any suit, claim, action, investigation or
proceeding by any Governmental Entity, (iii) the obtaining of all
necessary consents, approvals or waivers from third parties, including
all Necessary Consents, (iv) the defending of any suits, claims, actions,
investigations or proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions
contemplated hereby and (v) the execution or delivery of any additional
instruments necessary to consummate the transactions contemplated by, and
to fully carry out the purposes of, this Agreement.  In connection with
and without limiting the foregoing, the Company and its Board of
Directors shall, if any takeover statute or similar Legal Requirement is
or becomes applicable to the Merger, this Agreement or any of the
transactions contemplated by this Agreement, use all reasonable efforts
to ensure that the Merger and the other transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of
such Legal Requirement on the Merger, this Agreement and the transactions
contemplated hereby.

          (e)  Limitation on Divestiture.   Notwithstanding anything in
this Agreement to the contrary, nothing contained in this Agreement shall
be deemed to require Parent or the Company or any Subsidiary or affiliate
thereof to agree to any Action of Divestiture.   The Company shall not
take or agree to take any Action of Divestiture without the prior written
consent of Parent.  For purposes of this agreement, an "Action of
Divestiture" shall mean any divestiture by Parent or the Company or any
of their Subsidiaries or affiliates of shares of capital stock or of any
business, assets or property, or the imposition of any material
limitation on the ability of any of them to conduct their businesses or
to own or exercise control of such assets, properties and stock.

     5.7  Notification of Certain Matters.

          (a)  By the Company.  The Company shall give prompt notice to
Parent and Merger Sub of any representation or warranty made by it
contained in this Agreement becoming untrue or inaccurate, or any failure
of the Company to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it
under this Agreement, in each case, such that the conditions set forth in
Section 6.3(a) or 6.3(b) would not be satisfied.

          (b)  By Parent.  Parent and Merger Sub shall give prompt notice
to the Company of any representation or warranty made by it contained in
this Agreement becoming untrue or inaccurate, or any failure of Parent to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement, in
each case, such that the conditions set forth in Section 6.2(a) or 6.2(b)
would not be satisfied.

     5.8  Third-Party Consents.  As soon as practicable following the
date hereof, Parent and the Company will each use all reasonable efforts
to obtain any material consents, waivers and approvals under any of its
or its Subsidiaries' respective Contracts required to be obtained in
connection with the consummation of the transactions contemplated hereby.

     5.9  Termination of 401(k) Plans.  Effective no later than the day
immediately preceding the Closing Date, the Company and its Affiliates,
as applicable, shall each terminate any and all group severance,
separation or salary continuation plans, programs or arrangements and any
and all plans intended to include a Code Section 401(k) arrangement
(unless Parent provides written notice to the Company that such 401(k)
plans shall not be terminated) (collectively, "Company Plans").  Unless
Parent provides such written notice to the Company, no later than five
business days prior to the Closing Date, the Company shall provide Parent
with evidence that such Company Plan(s) have been terminated (effective
as of the day immediately preceding the Closing Date) pursuant to
resolutions of the Company's Board of Directors.  The form and substance
of such resolutions shall be subject to prior review and approval of
Parent.  The Company also shall take such other actions in furtherance of
terminating such Company Plan(s) as Parent may reasonably require.  In
the event that the distribution or rollover of assets from the trust of a
Company Plan that is terminated is reasonably anticipated to trigger
liquidation charges, surrender charges, or other fees to be imposed upon
the account of any participant or beneficiary of such terminated plan or
upon the Company or plan sponsor, then the Company shall take such all
such actions as are necessary to reasonably estimate the amount of such
charges and/or fees and provide such estimate in writing to Parent prior
to the Closing Date.

     5.10 Indemnification.

          (a)  Indemnity.  From and after the Effective Time, Parent will
cause the Surviving Corporation to, fulfill and honor in all respects the
obligations of the Company pursuant to any indemnification agreements
between the Company and its directors and officers immediately prior to
the Effective Time and identified on Schedule 5.10 (the "Indemnified
Parties"), subject to applicable law.  The Certificate of Incorporation
and Bylaws of the Surviving Corporation will contain provisions with
respect to exculpation, indemnification and advancement of expenses that
are at least as favorable to the Indemnified Parties as those contained
in the Certificate of Incorporation and Bylaws of the Company as in
effect on the date hereof, which provisions will not be amended, repealed
or otherwise modified for a period of six (6) years from the Effective
Time in any manner that would adversely affect the rights thereunder of
Indemnified Parties, unless such modification is required by law.

          (b)  Insurance.  For a period of six (6) years after the
Effective Time, Parent will cause the Surviving Corporation to use all
reasonable efforts to cause to be maintained directors' and officers'
liability insurance maintained by the Company covering those persons who
are covered by the Company's directors' and officers' liability insurance
policy as of the date hereof for events occurring prior to the Effective
Time on terms comparable to those applicable to the current directors and
officers of the Company; provided, however, that in no event will the
Surviving Corporation be required to expend in excess of 200% of the
annual premium currently paid by the Company for such coverage and which
is set forth on Schedule 5.10 of the Company Disclosure Letter (and to
the extent annual premium would exceed 200% of the annual premium
currently paid by the Company for such coverage, the Surviving
Corporation or Parent shall use all reasonable efforts to cause to be
maintained the maximum amount of coverage as is available for such amount
that is 200% of such annual premium).

          (c)  Third-Party Beneficiaries.  This Section 5.10 is intended
to be for the benefit of, and shall be enforceable by the Indemnified
Parties and their heirs and personal representatives and shall be binding
on Parent and the Surviving Corporation and its successors and assigns.
In the event Parent or the Surviving Corporation or its successor or
assign (i) consolidates with or merges into any other Person and shall
not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each case, proper
provision shall be made so that the successor and assign of Parent or the
Surviving Corporation, as the case may be, honor the obligations set
forth with respect to Parent or the Surviving Corporation, as the case
may be, in this Section 5.10.

     5.11 Merger Sub Compliance.  Parent shall cause Merger Sub to comply
with all of Merger Sub's obligations under or relating to this Agreement.
 Merger Sub shall not engage in any business which is not in connection
with the Merger with and into the Company pursuant to this Agreement.

     5.12 [Reserved]

     5.13 Section 83(b) Elections.  The Company shall use commercially
reasonable efforts to deliver to Parent at or before the Closing, a true,
correct and complete copy of each election statement made under Section
83(b) of the Code, filed by each person who acquired Company Restricted
Stock, together with evidence of the timely filing of such election with
the appropriate Internal Revenue Service Center.

     5.14 Spreadsheet.  The Company shall prepare and deliver to Parent
at or prior to the Closing a spreadsheet in a form acceptable to Parent,
which spreadsheet shall be dated as of the Closing Date, and which
spreadsheet (the "Spreadsheet") shall set forth as of immediately prior
to the Effective Time:  (a) the names and holders of all Company Options
and Company Restricted Stock; (b) the number of shares of Company Common
Stock underlying such Company Options, and the number of shares of
Company Restricted Stock, held by such Persons; (c) the exercise price
per share in effect as of immediately prior to the Effective Time for
each such Company Option; (d) the vesting status and schedule for such
Company Options and Company Restricted Stock held by each holder; and (e)
the tax status of each Company Option held by such holder under Section
422 of the Code.  A draft of the Spreadsheet shall be provided to Parent
by the Company no later than two (2) business days prior to the Closing.


     5.15 Takeover Laws.  The Company shall, upon the request of Parent,
take all reasonable steps to exclude the applicability of, or to assist
in any challenge by Parent or Merger Sub to the validity or applicability
to the Merger or any other transaction contemplated by this Agreement of,
any "moratorium", "control share acquisition", "business combination",
"fair price" or other form of anti-takeover Legal Requirements of any
jurisdiction that may purport to be applicable to this Agreement.

     5.16  Cooperation with Financing.  The Company acknowledges that to
fund partially or in whole the Merger Consideration, Parent intends to
raise capital pursuant to a bank borrowing under a secured or unsecured
loan, the issuance of debt, equity or hybrid securities in a private
placement or public offering or some combination thereof (any of the
foregoing, a "Financing").  The Company agrees to provide Parent with
such cooperation as may be reasonably requested by Parent in connection
with the arrangement and obtaining of any Financing, including (a)
participation in meetings, drafting sessions, due diligence sessions,
management presentation sessions, "road shows" and sessions with rating
agencies, (b) preparation of business projections, financial statements
(including pro forma financial statements), offering memoranda, private
placement memoranda, prospectuses, marketing materials and similar
documents, (c) providing access to the Company's senior officers and
representatives and the books and records, contracts and properties of
the Company and its Subsidiaries, (d) the execution and delivery of any
pledge and security documents, other financing documents, including any
indemnity agreements, and (e) furnishing, or causing to be furnished,
such other requested certificates or documents, comfort letters
(including "negative assurance" comfort) of accountants, consents of
accountants for use of their reports (which shall be unqualified) in any
materials relating to the financing to be used in connection with the
transactions contemplated by this Agreement, legal opinions, surveys and
title insurance.  The Company will use all commercially reasonable
efforts to assist Parent with the full satisfaction, on a timely basis,
of the terms, conditions, representations and warranties set forth in any
commitment letter, credit agreement, purchase agreement, underwriting
agreement, placement agent agreement or other definitive agreement for
any such Financing.  Notwithstanding anything herein to the contrary,
neither the Company, any of its Subsidiaries nor any of their respective
officers or directors shall be required to file any registration
statement with the SEC or pay any commitment or other similar fee or
incur any other liability in connection with the Financings contemplated
hereby prior to the Effective Time, including, without limitation, any
pledge or security documents or other definitive Financing documents.
The terms of this Section 5.16 relate only to the Company's obligation to
cooperate with Parent in connection with the arrangement of the
Financing, and shall not be deemed to create any additional condition on
the obligations of Parent and Merger Sub to consummate and effect the
Merger; provided, however, that any noncompliance or breach of this
Section 5.16 is subject to the provisions of Section 6.3.

     5.17 Company Options.  The Company agrees that immediately prior to
and contingent upon the effectiveness of the Merger, all Company Options
with an exercise price less than $30.00 per share shall be purchased by
the Company for a cash payment equal to the amount by which $30.00 per
share exceeds the exercise price per share for each share of Company
Common Stock subject to such Company Options, multiplied by the number of
shares issuable upon exercise in full of such Company Options, such that
there shall be no outstanding Company Options as of the effectiveness of
the Merger.  The Company shall make all appropriate withholding as may be
required in accordance with applicable laws and regulations for such
purchase.

     5.18 Company Fairness Opinion.  As soon as practicable following the
date hereof, the Company shall deliver to Parent and its legal counsel a
copy of the Company Fairness Opinion.

     5.19 Payments.  No later than two (2) Business Days following the
Closing, the Parent shall deposit in escrow the aggregate amount of cash
set forth in Section 5.19 to the Company Disclosure Letter. This cash
shall be used to fund the payment terms set forth in the executed Payment
Agreements. the Company shall use all commercially reasonable efforts to
cause the individuals set forth on Schedule 5.19 to the Company
Disclosure Letter hereto to deliver Parent an executed Payment Agreement
at the Closing.

                               ARTICLE VI
                        CONDITIONS TO THE MERGER

     6.1  Conditions to the Obligations of Each Party to Effect the
Merger.  The respective obligations of each party to this Agreement to
consummate and effect the Merger shall be subject to the satisfaction at
or prior to the Closing Date of the following conditions:

          (a)  Company Stockholder Approval.  This Agreement shall have
been approved and adopted, and the Merger shall have been duly approved,
by the requisite vote under applicable law, by the stockholders of the
Company.

          (b)  No Order.  No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent) which (i) is in
effect and (ii) has the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger.

          (c)  HSR Act. All waiting periods (and any extension thereof)
under the HSR Act relating to the transactions contemplated hereby will
have expired or terminated early.  All other material foreign antitrust
approvals reasonably determined by Parent to be required to be obtained
prior to the Merger in connection with the transactions contemplated
hereby shall have been obtained.

     6.2  Additional Conditions to the Obligations of the Company.  The
obligation of the Company to consummate and effect the Merger shall be
subject to the satisfaction at or prior to the Closing Date of each of
the following conditions, any of which may be waived, in writing,
exclusively by the Company:

          (a)  Representations and Warranties.  The representations and
warranties of Parent and Merger Sub contained in this Agreement shall be
true and correct on the date hereof and as of the Closing Date with the
same force and effect as if made on the Closing Date (except that those
representations and warranties which address matters only as of a
particular date shall have been true and correct only on such date),
except, in each case, or in the aggregate, as does not constitute a
Material Adverse Effect on Parent at the Closing Date (it being
understood that, for purposes of determining the accuracy of such
representations and warranties, any update of or modification to the
Parent Disclosure Letter made or purported to have been made after the
execution of this Agreement and any materiality and Material Adverse
Effect qualifications with respect to such representations and warranties
shall be disregarded).  The Company shall have received a certificate
with respect to the foregoing signed on behalf of Parent by an executive
officer of Parent.

          (b)  Agreements and Covenants.  Parent and Merger Sub shall
have performed or complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied with
by it on or prior to the Closing Date, and the Company shall have
received a certificate with respect to the foregoing signed on behalf of
Parent, with respect to the covenants of Parent, by an authorized
executive officer of Parent and a certificate with respect to the
foregoing signed on behalf of Merger Sub, with respect to the covenants
of Merger Sub, by an authorized executive officer of Merger Sub.

          (c)  Material Adverse Effect.  No Material Adverse Effect on
Parent shall have occurred since the date hereof and be continuing.

     6.3  Additional Conditions to the Obligations of Parent.  The
obligations of Parent and Merger Sub to consummate and effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, any of which may be waived, in writing,
exclusively by Parent and Merger Sub:

          (a)  Representations and Warranties.  The representations and
warranties of the Company contained in this Agreement shall be true and
correct on the date hereof and as of the Closing Date with the same force
and effect as if made on the Closing Date (except that those
representations and warranties which address matters only as of a
particular date shall have been true and correct only on such date),
except, in each case or in the aggregate (other than the representations
and warranties of the Company contained in Section 2.2 and 2.17 which
shall be true and correct in all material respects), as does not
constitute a Material Adverse Effect on the Company at the Closing Date
(it being understood that, for purposes of determining the accuracy of
such representations and warranties, any update of or modification to the
Company Disclosure Letter made or purported to have been made after the
execution of this Agreement and any materiality and Material Adverse
Effect qualifications with respect to such representations and warranties
shall be disregarded).  Parent and Merger Sub shall have received a
certificate with respect to the foregoing signed on behalf of the Company
by an executive officer of the Company.

          (b)  Agreements and Covenants.  The Company shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
it at or prior to the Closing Date, and Parent and Merger Sub shall have
received a certificate to such effect signed on behalf of the Company by
an executive officer of the Company.

          (c)  Material Adverse Effect.  No Material Adverse Effect on
the Company shall have occurred since the date hereof and be continuing.

          (d)  No Governmental Restriction.  There shall not be any
pending or threatened suit, action or proceeding asserted by any
Governmental Entity (i) challenging or seeking to restrain or prohibit
the consummation of the Merger or any of the other transactions
contemplated by this Agreement, the effect of which restraint or
prohibition if obtained would cause the condition set forth in Section
6.1(b) to not be satisfied or (ii) seeking to require Parent or the
Company or any Subsidiary or affiliate to effect an Action of
Divestiture.

          (e)  Payment Agreement.  Each of the individuals set forth on
Section 5.19 of the Company Disclosure Letter shall have delivered to
Parent an executed and binding agreement in the form attached hereto as
Exhibit A (the "Payment Agreement").

                              ARTICLE VII
                   TERMINATION, AMENDMENT AND WAIVER

     7.1  Termination.  This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board
of Directors of the terminating party or parties, and except as provided
below, whether before or after the requisite approvals of the
stockholders of the Company:

          (a)  by mutual written consent of Parent and the Company;

          (b)  by either the Company or Parent if:

              (i)     the Merger shall not have been consummated by July
31, 2006 (which date shall be extended to October 31, 2006, if the Merger
shall not have been consummated as of the result of a failure to satisfy
the conditions set forth in Section 6.1(b), Section 6.1(c) or Section
6.3(d)) (as appropriate, the "End Date"); provided, however, that the
right to terminate this Agreement under this Section 7.1(b)(i) shall not
be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the Merger to occur on
or before such date and such action or failure to act constitutes a
breach of this Agreement;

              (ii)    if a Governmental Entity shall have issued an
order, decree or ruling or taken any other action (including the failure
to have taken an action), in any case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger, which order,
decree, ruling or other action is final and nonappealable; or

              (iii)   if the required approval of the stockholders of the
Company contemplated by this Agreement shall not have been obtained by
reason of the failure to obtain the required vote at a meeting of the
Company stockholders duly convened therefor or at any adjournment
thereof; provided, however, that the right to terminate this Agreement
under this Section 7.1(b)(iii) shall not be available to the Company
where the failure to obtain Company stockholder approval shall have been
caused by the action or failure to act of the Company and such action or
failure to act constitutes a breach by the Company of this Agreement;

         (c)  by Parent:

              (i)     if a Triggering Event with respect to the Company
shall have occurred;

              (ii)    upon a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company shall have
become untrue, in either case such that the conditions set forth in
Section 6.3(a) or Section 6.3(b) would not be satisfied as of the time of
such breach or as of the time such representation or warranty shall have
become untrue, provided, that if such inaccuracy in the Company's
representations and warranties or breach by the Company is curable by the
Company prior to the End Date through the exercise of reasonable efforts,
then Parent may not terminate this Agreement under this Section
7.1(c)(ii) prior to the date that is 30 days following the receipt of
written notice from Parent to the Company of such breach, provided that
the Company continues to exercise all reasonable efforts to cure such
breach through such 30-day period (it being understood that Parent may
not terminate this Agreement pursuant to this Section 7.1(c)(ii) if it
shall have materially breached this Agreement or if such breach by the
Company is cured within such 30-day period);

              (iii)   if a Material Adverse Effect on the Company shall
have occurred since the date hereof; or

              (iv)    if a material breach of Section 5.3 of this
Agreement shall have occurred.

          (d)  by the Company:

              (i)     upon a breach of any representation, warranty,
covenant or agreement on the part of Parent set forth in this Agreement,
or if any representation or warranty of Parent shall have become untrue,
in either case such that the conditions set forth in Section 6.2(a) or
Section 6.2(b) would not be satisfied as of the time of such breach or as
of the time such representation or warranty shall have become untrue,
provided that if such inaccuracy in Parent's representations and
warranties or breach by Parent is curable by Parent prior to the End Date
through the exercise of reasonable efforts, then the Company may not
terminate this Agreement under this Section 7.1(d)(i) prior to 20 days
following the receipt of written notice from the Company to Parent of
such breach, provided that Parent continues to exercise all reasonable
efforts to cure such breach through such 20-day period (it being
understood that the Company may not terminate this Agreement pursuant to
this 7.1(d)(i) if it shall have materially breached this Agreement or if
such breach by Parent is cured within such 20-day period); or

              (ii)    if, prior to the adoption of this Agreement or the
approval of the Merger by the stockholders of the Company, in connection
with an Acquisition Proposal it wishes to accept, (A) the Company has
complied with Section 5.3 with respect to such Acquisition Proposal, (B)
the Board of Directors of the Company has determined, and has not changed
its determination prior to the two (2) business day period provided for
in Section 5.3(d)(vi), that such Acquisition Proposal constitutes a
Superior Offer, and (C) the Company pays the Termination Fee prior to or
simultaneously with such termination; or
              (iii)   if a Material Adverse Effect on Parent shall have
occurred since the date hereof.

     For the purposes of this Agreement, a "Triggering Event," with
respect to the Company, shall be deemed to have occurred if:  (i) its
Board of Directors or any committee thereof shall for any reason have
withdrawn or shall have amended or modified in a manner adverse to Parent
its unanimous recommendation in favor of, the adoption and approval of
the Agreement or the approval of the Merger, (ii) it shall have failed to
include in the Proxy Statement the unanimous recommendation of its Board
of Directors in favor of the adoption and approval of the Agreement and
the approval of the Merger, (iii) its Board of Directors fails to
reaffirm (publicly, if so requested) its recommendation in favor of the
adoption and approval of the Agreement and the approval of the Merger
within five (5) calendar days after Parent requests in writing that such
recommendation be reaffirmed, (iv) its Board of Directors or any
committee thereof shall have approved or recommended any Acquisition
Proposal, (v) the Company shall have entered into any letter of intent or
similar document or any agreement, contract or commitment accepting any
Acquisition Proposal, or (vi) a tender or exchange offer relating to its
securities shall have been commenced by a Person unaffiliated with Parent
and the Company shall not have sent to its security holders pursuant to
Rule 14e-2 promulgated under the Securities Act, within ten (10) business
days after such tender or exchange offer is first published, sent or
given, a statement disclosing that the Board of Directors of the Company
recommends rejection of such tender or exchange offer.

     7.2  Notice of Termination; Effect of Termination.  Any termination
of this Agreement under Section 7.1 above will be effective immediately
upon the delivery of a valid written notice of the terminating party to
the other party hereto.  In the event of the termination of this
Agreement as provided in Section 7.1, this Agreement shall be of no
further force or effect, except (i) as set forth in Section 5.4(a), this
Section 7.2, Section 7.3 and Article VIII, each of which shall survive
the termination of this Agreement and (ii) nothing herein shall relieve
any party from liability for any willful breach of this Agreement.  No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, all of which obligations
shall survive termination of this Agreement in accordance with their
terms.

     7.3  Fees and Expenses.

          (a)  General.  Except as set forth in this Section 7.3, all
fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring
such expenses whether or not the Merger is consummated; provided,
however, that:

              (i)     The Company shall pay all fees and expenses
incurred in relation to the printing and filing (with the SEC) of the
Proxy Statement (including any preliminary materials related thereto).

              (ii)    Parent shall pay the filing fee for the initial
Notification and Report Forms filed with the FTC and DOJ under the HSR
Act and premerger notification and reports forms under similar applicable
laws of other jurisdictions, in each case pursuant to Section 5.6(a).

              (iii)   The Company shall pay to Parent all reasonable and
documented out-of-pocket expenses (excluding any wages or salaries of any
of Parent's or Merger Sub's or any of their affiliates' employees)
incurred by Parent and/or Merger Sub prior to the termination of this
Agreement in connection with the Merger and the other transactions
contemplated hereby if this Agreement is terminated pursuant to Section
7.1(c)(iv); provided, however, that in no event shall payments by the
Company to Parent under this Section 7.3(b)(iii) exceed $1,880,821.

          (b)  Company Payment.

              (i)     Payment.  In the event that this Agreement is
terminated by Parent or the Company, as applicable pursuant to Sections
7.1(b)(i), 7.1(b)(iii), 7.1(c)(i), 7.1(c)(ii), 7.1(c)(iv) or 7.1(d)(ii),
the Company shall promptly (simultaneously in connection with a
termination pursuant to Section 7.1(d)(ii)), but in no event later than
two (2) business days after the date of such termination, pay Parent a
fee equal to Fourteen Million One Hundred Six Thousand One Hundred Fifty
Four Dollars ($14,106,154) in immediately available funds (the
"Termination Fee"); provided, that in the case of termination under
Sections 7.1(b)(i), 7.1(b)(iii) or 7.1(c)(ii):  (A) such payment shall be
made only if following the date hereof and prior to the termination of
this Agreement, there has been a public disclosure of an Acquisition
Proposal with respect to the Company and (1) within 12 months following
the termination of this Agreement an Acquisition of the Company is
consummated or (2) within 12 months following the termination of this
Agreement the Company enters into an agreement providing for an
Acquisition of the Company and an Acquisition of the Company is
consummated within 18 months of the termination of this Agreement and (B)
such payment shall be made promptly, but in no event later than two (2)
business days after the consummation of such Acquisition of the Company;
provided further, that in the case of termination under Section
7.1(c)(iv):  (A) such payment shall be made only if following the date
hereof and prior to the termination of this Agreement, there has been
disclosure (whether private, public or confidential) of an Acquisition
Proposal with respect to the Company and (1) within 12 months following
the termination of this Agreement an Acquisition of the Company is
consummated or (2) within 12 months following the termination of this
Agreement the Company enters into an agreement providing for an
Acquisition of the Company and an Acquisition of the Company is
consummated within 18 months of the termination of this Agreement, (B)
such payment shall be made promptly, but in no event later than two (2)
business days after the consummation of such Acquisition of the Company
and (C) such payment shall be reduced for any amounts paid to Parent by
the Company pursuant to Section 7.3(a)(iii).

              (ii)    Interest and Costs; Other Remedies.  The Company
acknowledges that the agreements contained in this Section 7.3(b) are an
integral part of the transactions contemplated by this Agreement, and
that, without these agreements, Parent would not enter into this
Agreement; accordingly, if the Company fails to pay in a timely manner
the amounts due pursuant to this Section 7.3(b), and, in order to obtain
such payment, Parent makes a claim that results in a judgment against the
Company for the amounts set forth in this Section 7.3(b), the Company
shall pay to Parent the reasonable costs and expenses of Parent
(including reasonable attorneys' fees and expenses) in connection with
such suit, together with interest on the amounts set forth in this
Section 7.3(b) at the prime rate of Citibank, N.A. in effect on the date
such payment was required to be made.  Payment of the fees described in
this Section 7.3(b) shall not be in lieu of damages incurred in the event
of breach of this Agreement.

              (iii)   Certain Definitions.  For the purposes of this
Section 7.3(b) only, "Acquisition," with respect to a party hereto, shall
mean any of the following transactions (other than the transactions
contemplated by this Agreement):  (i) a merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving the party pursuant to which the stockholders of the
party immediately preceding such transaction hold less than 50% of the
aggregate equity interests in the surviving or resulting entity of such
transaction or any direct or indirect parent thereof, (ii) a sale or
other disposition by the party of assets representing in excess of 40% of
the aggregate fair market value of the party's business immediately prior
to such sale, or (iii) the acquisition by any Person or group (including
by way of a tender offer or an exchange offer or issuance by the party or
such Person or group), directly or indirectly, of beneficial ownership or
a right to acquire beneficial ownership of shares representing in excess
of 40% of the voting power of the then outstanding shares of capital
stock of the party.

     7.4  Amendment.  Subject to applicable law, this Agreement may be
amended by the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after approval of
the Merger by the stockholders of the Company, provided, after approval
of the Merger by the stockholders of the Company, no amendment shall be
made which by law or in accordance with the rules of Nasdaq requires
further approval by the stockholders of the Company without such further
stockholder approval.  This Agreement may not be amended except by
execution of an instrument in writing signed on behalf of each of Parent,
Merger Sub and the Company.

     7.5  Extension; Waiver.  At any time prior to the Effective Time
either party hereto, by action taken or authorized by their respective
Board of Directors, may, to the extent legally allowed:  (i) extend the
time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations
and warranties made to such party contained herein or in any document
delivered pursuant hereto, and (iii) waive compliance with any of the
agreements or conditions for the benefit of such party contained herein.
 Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.  Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.

                              ARTICLE VIII
                            GENERAL PROVISIONS

     8.1  Non-Survival of Representations and Warranties.  The
representations and warranties of the Company, Parent and Merger Sub
contained in this Agreement, or any instrument delivered pursuant to this
Agreement, shall terminate at the Effective Time, and only the covenants
that by their terms survive the Effective Time and this Article VI shall
survive the Effective Time.

     8.2  Notices.  All notices and other communications hereunder shall
be in writing and shall be deemed duly given (i) on the date of delivery
if delivered personally, (ii) on the date of confirmation of receipt (or
the first business day following such receipt if the date is not a
business day) of transmission by telecopy or telefacsimile, or (iii) on
the date of confirmation of receipt (or the first business day following
such receipt if the date is not a business day) if delivered by a
nationally recognized courier service.  All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice:

          (a)  if to Parent or Merger Sub, to:

               Coherent, Inc.
               5100 Patrick Henry Drive, PO Box
               Santa Clara, CA 95054
               Attention:  Chief Executive Officer
               Telephone No.:  (408) 764-4000
               Telecopy No.:  (408) 970-9998

               with copies to (which shall not constitute notice):

               Coherent, Inc.
               5100 Patrick Henry Drive, PO Box 54980
               Santa Clara, CA 95054
               Attention:  General Counsel
               Telephone No.:  (408) 764-4000
               Telecopy No.:  (408) 970-9998

               Wilson Sonsini Goodrich & Rosati
               Professional Corporation
               650 Page Mill Road
               Palo Alto, California 94304-1050
               Attention:  Larry W. Sonsini, Esq.
               David J. Segre, Esq.
               Bret M. DiMarco, Esq.
               Telephone No.:  (650) 493-9300
               Telecopy No.:  (650) 493-6811
          (b)  if to the Company, to:

               Excel Technology, Inc.
               41 Research Way
               East Setauket, N.Y. 11753
               Attention:  Chief Executive Officer
               Telephone No.:  (631) 784-6100
               Telecopy No.:  (631) 784-6196

               with a copy to (which shall not constitute notice):

               Breslow Walker, LLP
               100 Jericho Quadrangle
               Jericho, NY 11753
               Attention:  Howard S. Breslow, Esq.
               Telephone No.:  (516) 822-6505
               Telecopy No.:  (516) 822-6544


     8.3  Interpretation; Knowledge.

          (a)  When a reference is made in this Agreement to Exhibits,
such reference shall be to an Exhibit to this Agreement unless otherwise
indicated.  When a reference is made in this Agreement to Sections, such
reference shall be to a section of this Agreement unless otherwise
indicated.  For purposes of this Agreement, the words "include,"
"includes" and "including," when used herein, shall be deemed in each
case to be followed by the words "without limitation."  The table of
contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  When reference is made herein to "the
business of" an entity, such reference shall be deemed to include the
business of such entity and its Subsidiaries, taken as a whole.  An
exception or disclosure made in the Company Disclosure Letter with regard
to a representation of the Company, or in the Parent Disclosure Letter
with regard to a representation of Parent or Merger Sub, shall be deemed
made with respect to any other representation by such party to which such
exception or disclosure is clearly relevant on its face based on the
content of such disclosure.  The term "business day" means a day other
than a Saturday, Sunday or other day in which banks located in New York,
New York are required or authorized not to open for business.

          (b)  For purposes of this Agreement, the term "Knowledge"
means, with respect to a party hereto, with respect to any matter in
question, that any of the "officers" (as such term is defined in Rule
16a-1(f) promulgated under the Exchange Act) of such party, has actual
knowledge of such matter, after due inquiry of their respective direct
reports (including outside legal counsel and accountants).

          (c)  For purposes of this Agreement, the term "Material Adverse
Effect," when used in connection with an entity, means any change, event,
violation, inaccuracy, circumstance, occurrence, state of facts,
development or effect (any such item, an "Effect"), individually or when
taken together with all other Effects that have occurred on or prior to
the date of determination of the occurrence of the Material Adverse
Effect, that is or is reasonably likely to (i) be materially adverse to
the business, assets (including intangible assets), capitalization,
condition (financial or otherwise) or results of operations of such
Person taken as a whole with its Subsidiaries or (ii) materially impede
the authority of such entity to consummate the transactions contemplated
by this Agreement in accordance with the terms hereof and applicable
Legal Requirements; provided, however, that, for purposes of clause (i)
above, in no event shall any of the following, alone or in combination,
be deemed to constitute, nor shall any of the following be taken into
account in determining whether there has been or is reasonably likely to
be, a Material Adverse Effect on any Person:  (A) any Effect resulting
from compliance with the requirements of this Agreement or proximately
from the public announcement of the execution of this Agreement or the
pendency of the Merger, (B) any Effect resulting from the announcement or
pendency of the Merger, (C) any change in such Person's stock price or
trading volume (it being understood that the facts or circumstances
giving rise to such change in stock price or trading volume may be taken
into account in determining whether there has been or is reasonably
likely to be a Material Adverse Effect on any Person), (D) any failure by
such Person to meet revenue or earnings projections (it being understood
that the facts or circumstances giving rise to or contributing to such
failure may be taken into account in determining whether there has been
or is reasonably likely to be a Material Adverse Effect on any Person),
(E) any Effect that results from changes affecting any of the industries
in which such Person operates generally or the United States economy
generally (which changes in each case do not disproportionately affect
such Person in any material respect), or (F) any Effect that results from
changes affecting general worldwide economic or capital market conditions
(which changes in each case do not disproportionately affect such Person
in any material respect).

          (d)  For purposes of this Agreement, the term "Person" shall
mean any individual, corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, company (including any limited liability
company or joint stock company), firm or other enterprise, association,
organization, entity or Governmental Entity.

     8.4  Counterparts.  This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.

     8.5  Entire Agreement; Third-Party Beneficiaries.  This Agreement
and the documents and instruments and other agreements among the parties
hereto as contemplated by or referred to herein, including the Company
Disclosure Letter and the Parent Disclosure Letter, (i) constitute the
entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter
hereof, it being understood that the Confidentiality Agreement shall
continue in full force and effect until the Closing and shall survive any
termination of this Agreement and (ii) are not intended, whether express
or implied, to confer upon any other Person any legal or equitable
rights, benefits or remedies hereunder, except as specifically provided,
following the Effective Time, in Section 5.10.

     8.6  Severability.  In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court
of competent jurisdiction to be illegal, void or unenforceable, the
remainder of this Agreement will continue in full force and effect and
the application of such provision to other Persons or circumstances will
be interpreted so as reasonably to effect the intent of the parties
hereto.  The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that
will achieve, to the greatest extent possible, the economic, business and
other purposes of such void or unenforceable provision.

     8.7  Other Remedies; Specific Performance.

          (a)  Other Remedies.  Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy.  The
parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.

          (b)  Specific Performance.  It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity, and each party hereby waives any
requirement to post a bond in connection with any such proceeding.

     8.8  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.

     8.9  Rules of Construction.  The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting
such agreement or document.

     8.10 Assignment.  No party may assign either this Agreement or any
of its rights, interests, or obligations hereunder without the prior
written approval of the other parties.  Any purported assignment in
violation of this Section 8.10 shall be void.  Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
permitted assigns.

     8.11 Waiver of Jury Trial.  EACH OF PARENT, MERGER SUB AND THE
COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF
PARENT, MERGER SUB OR THE COMPANY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.

                                  *****

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date
first written above.

                           COHERENT, INC.

                           By:    /s/ John Ambroseo
                                  .....................................

                           Name:  John Ambroseo
                           Title: Chief Executive Officer

                           SPIDER ACQUISITION CORPORATION


                           By:
                           Name:  [.......................]
                           Title: President and Chief Executive Officer

                           EXCEL TECHNOLOGY, INC.

                           By:    /s/ Antoine Dominic
                                  ......................................
                           Name:  Antoine Dominic
                           Title: Chief Executive Officer



                   ***AGREEMENT AND PLAN OF MERGER***





16
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{"company-data": {"conformed-name": "EXCEL TECHNOLOGY INC", "cik": "0000873603", "assigned-sic": "3690", "irs-number": "112780242", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-19306", "film-number": "06634052"}, "business-address": {"street1": "41 RESEARCH WAY", "city": "E SETUAKET", "state": "NY", "zip": "11733", "phone": "631-784-6175"}, "mail-address": {"street1": "41 RESEARCH WAY", "city": "EAST SETAUKET", "state": "NY", "zip": "11733"}}
UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION

                         Washington, D.C. 20549

                                FORM 8-K

                             CURRENT REPORT
                   Pursuant to Section 13 or 15(d) of
                   the Securities Exchange Act of 1934

   Date of Report (Date of earliest event reported):  February 21, 2006

                         EXCEL TECHNOLOGY, INC.
          .................................................
          (Exact name of Registrant as specified in Charter)

          Delaware                    0-19306            11-2780242
(State or other jurisdiction       (Commission         (I.R.S. Employer
      of Incorporation)            File Number)      Identification No.)

                 41 Research Way, E. Setauket, NY 11733
          ..................................................
          (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (631)-784-6175
                                                      .............

      ............................................................
     (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:

     [ ]  Written communications pursuant to rule 425 under the
          Securities Act (17 CFR 230.425)

     [X]  Soliciting material pursuant to Rule 14a-12 under the Exchange
          Act (17 CFR 240.14a-12)

     [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under
          the Exchange Act (17 CFR 240.14d-2(b))

     [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under
          the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01.     OTHER EVENTS.

     On February 20, 2006, Excel Technology, Inc. (the "Company") entered
into an Agreement and Plan of Merger (the "Merger Agreement") with
Coherent, Inc., a Delaware corporation ("Parent"), and Spider Acquisition
Merger Corporation, a Delaware corporation and wholly owned subsidiary of
Coherent, Inc. ("Merger Sub").  Under the Merger Agreement, Merger Sub
would be merged with and into the Company (the "Merger"), the separate
corporate existence of Merger Sub will cease and the Company will
continue as the surviving corporation (the "Surviving Corporation") and
as a wholly-owned subsidiary of Parent.

     Pursuant to the Merger Agreement, at the effective time of the
Merger, each issued and outstanding share of common stock, par value
$0.001 per share, of the Company ("Common Stock") issued and outstanding
immediately prior to the effective time, other than Common Stock held by
any stockholders who are entitled to and properly exercise appraisal
rights under Delaware law, shall be automatically converted into the
right to receive $30.00 in cash per share.

     The Merger is conditioned upon, among other things, the adoption of
the Merger Agreement by the stockholders of the Company pursuant to
applicable law and the termination or expiration of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

     The foregoing description of the Merger Agreement does not purport
to be complete and is qualified in its entirety by reference to the
Merger Agreement, which is attached as Exhibit 2.1 to this Current Report
on Form 8-K and is incorporated herein by reference.

Additional Information and Where to Find It

     The Company intends to file a proxy statement on Schedule 14A more
fully describing the merger transaction involving the Company and Parent.
The proxy statement will be mailed to the stockholders of the Company.
The Company's stockholders are urged to read the proxy statement and
other relevant materials when they become available because they will
contain important information about the acquisition and the Company.
Investors and security holders may obtain free copies of these documents
(when they are available) and other documents filed with the Securities
and Exchange Commission (the "SEC") at the SEC's web site at www.sec.gov.
In addition, investors and security holders may obtain free copies of the
documents filed with the SEC by the Company by going to the Company's SEC
Filing Page on its corporate website at http://www.Exceltechinc.com.

     In addition, the Company and its officers and directors may be
deemed to be participants in the solicitation of proxies from the
Company's stockholders with respect to the acquisition.  A description of
any interests that the Company's officers and directors have in the
acquisition will be available in the proxy statement.

ITEM 9.01:  FINANCIAL STATEMENTS AND EXHIBITS.

     (d)  Exhibits

          2.1     Agreement and Plan of Merger, dated as of February 20,
2006, by and among Excel Technology, Inc., Coherent, Inc. and Spider
Acquisition Corporation.

                               Signatures:

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

Date: February 21, 2006

                                EXCEL TECHNOLOGY, INC.
                                By:
                                    /s/ Antoine Dominic
                                    ......................
                                    Antoine Dominic
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)

                                                 EXHIBIT 2.1 TO FORM 8-K

                      AGREEMENT AND PLAN OF MERGER
                              BY AND AMONG
                             COHERENT, INC.,
                     SPIDER ACQUISITION CORPORATION
                                   AND
                         EXCEL TECHNOLOGY, INC.
                     Dated as of February 20, 2006

                           TABLE OF CONTENTS

                                                                    Page
                                                                    ....

ARTICLE I THE MERGER                                                   2

1.1  The Merger                                                        2
     ..........
1.2  Effective Time; Closing                                           2
     .......................
1.3  Effect of the Merger                                              2
     ....................
1.4  Certificate of Incorporation and Bylaws                           2
     .......................................
1.5  Directors and Officers                                            3
     ......................
1.6  Effect on Capital Stock                                           3
     .......................
1.7  Surrender of Certificates                                         4
     .........................
1.8  No Further Ownership Rights in Company Common Stock               6
     ...................................................
1.9  Lost, Stolen or Destroyed Certificates                            6
     ......................................
1.10 Dissenting Shares                                                 6
     .................
1.11 Further Action                                                    7
     ..............

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY               7

2.1  Organization; Standing and Power; Charter Documents; Subsidiaries 7
     .................................................................
2.2  Capital Structure                                                 9
     .................
2.3  Authority; Non-Contravention; Necessary Consents                 11
     ................................................
2.4  SEC Filings; Financial Statements; Controls                      12
     ...........................................
2.5  Absence of Certain Changes or Events                             14
     ....................................
2.6  Taxes                                                            15
     .....
2.7  Intellectual Property                                            18
     .....................
2.8  Compliance; Permits                                              23
     ...................
2.9  Litigation                                                       23
     ..........
2.10 Brokers' and Finders' Fees; Fees and Expenses                    23
     .............................................
2.11 Transactions with Affiliates                                     24
     ............................
2.12 Employee Benefit Plans                                           24
     ......................
2.13 Title to Properties                                              27
     ...................
2.14 Environmental Matters                                            28
     .....................
2.15 Contracts                                                        30
     .........
2.16 Disclosure                                                       33
     ..........
2.17 Board Approval                                                   33
     ..............
2.18 Fairness Opinion                                                 33
     ................
2.19 Takeover Statutes                                                33
     .................

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB   34

3.1  Organization; Standing and Power; Charter Documents; Merger Sub  34
     ...............................................................
3.2  Authority; Non-Contravention; Necessary Consents                 34
     ................................................
3.3  SEC Filings; Financial Statements                                35
     .................................
3.4  Disclosure                                                       36
     ..........
3.5  Board Approval                                                   36
     ..............
3.6  No Prior Merger Sub Operations                                   36
     ..............................
3.7  Financing                                                        36
     .........

ARTICLE IV CONDUCT BY THE COMPANY PRIOR TO THE EFFECTIVE TIME         36

4.1  Conduct of Business by the Company                               36
     ..................................

ARTICLE V ADDITIONAL AGREEMENTS                                       41

5.1  Proxy Statement                                                  41
     ...............
5.2  Meeting of Company Stockholders; Board Recommendation            42
     .....................................................
5.3  Acquisition Proposals                                            43
     .....................
5.4  Confidentiality; Access to Information; No Modification of
     ..........................................................

     Representations, Warranties or Covenants                         47
     ........................................

5.5  Public Disclosure                                                48
     .................
5.6  Regulatory Filings; Commercially Reasonable Efforts              48
     ...................................................
5.7  Notification of Certain Matters                                  50
     ...............................
5.8  Third-Party Consents                                             51
     ....................
5.9  Termination of 401(k) Plans                                      51
     ...........................
5.10 Indemnification                                                  51
     ...............
5.11 Merger Sub Compliance                                            52
     .....................
5.12 [Reserved]                                                       52
     ..........
5.13 Section 83(b) Elections                                          53
     .......................
5.14 Spreadsheet                                                      53
     ...........
5.15 Takeover Laws                                                    53
     .............
5.16 Cooperation with Financing                                       53
     ..........................
5.17 Company Options                                                  54
     ...............
5.18 Company Fairness Opinion                                         54
     ........................
5.19 Payments                                                         54
     ........

ARTICLE VI CONDITIONS TO THE MERGER                                   55

6.1  Conditions to the Obligations of Each Party to Effect the Merger 55
     ................................................................
6.2  Additional Conditions to the Obligations of the Company          55
     .......................................................
6.3  Additional Conditions to the Obligations of Parent               56
     ..................................................

ARTICLE VII TERMINATION, AMENDMENT AND WAIVER                         57

7.1  Termination                                                      57
     ...........
7.2  Notice of Termination; Effect of Termination                     59
     ............................................
7.3  Fees and Expenses                                                60
     .................
7.4  Amendment                                                        62
     .........

7.5  Extension; Waiver                                                62
     ................
ARTICLE VIII GENERAL PROVISIONS                                       62

8.1  Non-Survival of Representations and Warranties                   62
     ..............................................
8.2  Notices                                                          62
     .......
8.3  Interpretation; Knowledge                                        64
     .........................
8.4  Counterparts                                                     66
     ............
8.5  Entire Agreement; Third-Party Beneficiaries                      66
     ...........................................
8.6  Severability                                                     66
     ............
8.7  Other Remedies; Specific Performance                             66
     ....................................
8.8  Governing Law                                                    67
     .............
8.9  Rules of Construction                                            67
     .....................
8.10 Assignment                                                       67
     ..........
8.11 Waiver of Jury Trial                                             67

                         INDEX OF DEFINED TERMS

Defined Term                                Defined in Section
................................             ..................
Acquisition                                 7.3(b)(iii)
Acquisition Proposal                        5.3(g)(i)
Action of Divestiture                       5.6(e)
Affiliate                                   5.12(a)
Agreement                                   Forepart
Approval                                    2.12(c)(ii)
Average Stock Price                         1.6(f)
Certificate of Merger                       1.2
Certificates                                1.7(c)
Change of Recommendation                    5.3(d)
Closing                                     1.2
Closing Date                                1.2
COBRA                                       2.12(b)
Code                                        Recitals
Company                                     Forepart
Company Affiliate                           5.12
Company Balance Sheet                       2.4(b)
Company Benefit Plans                       2.12(a)
Company Board Approval                      2.17
Company Charter Documents                   2.1(b)
Company Common Stock                        1.6(a)
Company Disclosure Letter                   Article II
Company Environmental Permits               2.14(c)
Company Fairness Opinion                    2.18
Company Financials                          2.4(b)
Company Intellectual Property               2.7(a)(ii)
Company Material Contract                   2.15(a)
Company Options                             2.2(b)
Company Permits                             2.8(b)
Company Plans                               5.9(c)
Company Preferred Stock                     2.2(a)
Company Products                            2.7(c)
Company Registered Intellectual Property    2.7(a)(iv)
Company Restricted Stock                    1.6(b)
Company Retirement Plan                     2.12(a)
Company SEC Reports                         2.4(a)
Company Stock Option Plans                  2.12(a)
Company Voting Debt                         2.2(c)
Confidentiality Agreement                   5.4(a)
Contracts                                   2.15(d)
Delaware Law                                Recitals
Dissenting Shares                           1.10
DOJ                                         5.6(a)
DOL                                         2.12(b)
Domain Names                                2.7(a)(i)
Effect                                      8.3(c)
Effective Time                              1.2
Employee                                    2.12(a)
Employment Agreements                       Recitals
End Date                                    7.1(b)(i)
Environmental Law                           2.14(c)
ERISA                                       2.12(c)(i)
Exchange Act                                2.3(c)
Exchange Fund                               1.7(b)
Exchange Ratio                              1.6(a)
FTC                                         5.6(a)
Funded Retirement Plan                      2.12(d)
GAAP                                        2.4(b)
Governmental Entity                         2.3(c)
Hazardous Material                          2.14(a)
Hazardous Materials Activities              2.14(b)
HSR Act                                     2.3(c)
Indemnified Parties                         5.11(a)
Intellectual Property                       2.7(a)(i)
International Employee Plan                 2.12(g)
IRS                                         2.12(b)
Knowledge                                   8.3(b)
Leased Real Property                        2.13(a)
Leases                                      2.13(a)
Legal Requirements                          2.2(d)
Marketplace Rule                            1.6(a)
Material Adverse Effect                     8.3(c)
Merger                                      1.1
Merger Consideration                        1.6(a)
Merger Sub                                  Forepart
Merger Sub Common Stock                     1.6(d)
Nasdaq                                      1.6(f)
Necessary Consents                          2.3(c)
Option Ratio                                5.9(a)
Owned Real Property                         2.13(a)
Parent                                      Forepart
Parent Balance Sheet                        3.4(b)
Parent Charter Documents                    3.1(b)
Parent Common Stock                         1.6(a)
Parent Disclosure Letter                    Article III
Parent Financials                           3.4(b)
Parent Options                              3.2(b)
Parent Preferred Stock                      3.2(a)
Parent Rights                               1.6(a)
Parent Rights Agreement                     1.6(a)
Parent SEC Reports                          3.4(a)
Parent Stock Option Plans                   3.2(b)
Parent Voting Debt                          3.2(c)
Payment Agent                               1.7(a)
Payment Agreement                           5.19
Per Share Amount                            1.6(a)
Per Share Merger Consideration              1.6(a)
Permits                                     2.8(b)
Person                                      8.3(d)
Proxy Statement                             2.16
PTO                                         2.7(b)
Registered Intellectual Property            2.7(a)(iii)
Registration Statement                      2.16
Retirement Benefit Rights                   2.12(d)
Retirement Plan                             2.12(d)
Rights                                      2.15(e)
RoHS Directive                              2.14(b)
Routine Grants                              4.1(b)(iv)
Section 262                                 1.10
Securities Act                              2.4(a)
Spreadsheet                                 5.17
Stockholders' Meeting                       5.2(a)
Subsidiary                                  2.1(a)
Subsidiary Charter Documents                2.1(b)
Superior Offer                              5.3(g)(ii)
Surviving Corporation                       1.1
Tax                                         2.6(a)
Tax Returns                                 2.6(b)
Taxes                                       2.6(a)
Termination Fee                             7.3(b)(i)
Triggering Event                            7.1(d)(iii)
URLs                                        2.7(a)(i)
WEEE Directive                              2.14(b)

                     AGREEMENT AND PLAN OF MERGER

     This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of February 20, 2006, by and among Coherent, Inc., a
Delaware corporation ("Parent"), Spider Acquisition Corporation, a
Delaware corporation and direct wholly-owned subsidiary of Parent
("Merger Sub"), and Excel Technology, Inc., a Delaware corporation (the
"Company").

                                RECITALS
                                ........

     A.  The respective Boards of Directors of Parent, Merger Sub and the
Company have deemed it advisable and in the best interests of their
respective corporations and stockholders that Parent and the Company
consummate the business combination and other transactions provided for
herein in order to advance their respective long-term strategic business
interests.

     B.  The respective Boards of Directors of Parent, Merger Sub and the
Company have approved, in accordance with applicable provisions of the
laws of the state of Delaware ("Delaware Law"), this Agreement and the
transactions contemplated hereby, including the Merger.

     C.  The Board of Directors of the Company has resolved to recommend
to its stockholders approval and adoption of this Agreement and approval
of the Merger.

     D.  Parent, as the sole stockholder of Merger Sub, has approved and
adopted this Agreement and approved the Merger.

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

     NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

                               ARTICLE I
                               THE MERGER

     1.1  The Merger.  At the Effective Time and subject to and upon the
terms and conditions of this Agreement and the applicable provisions of
Delaware Law, Merger Sub shall be merged with and into the Company (the
"Merger"), the separate corporate existence of Merger Sub shall cease and
the Company shall continue as the surviving corporation.  The Company, as
the surviving corporation after the Merger, is hereinafter sometimes
referred to as the "Surviving Corporation."

     1.2  Effective Time; Closing.  Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by
filing a Certificate of Merger with the Secretary of State of the State
of Delaware in accordance with the relevant provisions of Delaware Law
(the "Certificate of Merger") (the time of such filing with the Secretary
of State of the State of Delaware or such later time as may be agreed in
writing by the Company and Parent and specified in the Certificate of
Merger being the "Effective Time") on the Closing Date.  The closing of
the Merger (the "Closing") shall take place at the offices of Wilson
Sonsini Goodrich & Rosati, Professional Corporation, located at 650 Page
Mill Road, Palo Alto, California, at a time and date to be specified by
the parties, which shall be no later than the second business day after
the satisfaction or waiver of the conditions set forth in Article VI
(other than those conditions that by their terms are to be satisfied or
waived at the Closing, but subject to the satisfaction or waiver
thereof), or at such other time, date and location as the parties hereto
agree in writing; provided, however, that if all the conditions set forth
in Article VI shall not have been satisfied or waived on such second
business day, then the Closing shall take place on the first business day
on which all such conditions shall have been satisfied or waived.  The
date on which the Closing occurs is referred to herein as the "Closing
Date."

     1.3  Effect of the Merger.  At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable
provisions of Delaware Law, including Section 259 of the General
Corporation Law of the State of Delaware. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of the Company and
Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.

     1.4  Certificate of Incorporation and Bylaws.  At the Effective
Time, the Certificate of Incorporation of the Surviving Corporation shall
be amended and restated to read the same as the Certificate of
Incorporation of Merger Sub, as in effect immediately prior to the
Effective Time, until thereafter amended in accordance with Delaware Law
and as provided in such Certificate of Incorporation; provided, however,
that at the Effective Time, Article I  of the Certificate of
Incorporation of the Surviving Corporation shall be amended and restated
in its entirety to read as follows:  "The name of the corporation is
Excel Technology, Inc." and, to the extent necessary, the Certificate of
Incorporation shall be amended so as to comply with Section 5.10(a).  At
the Effective Time, the Bylaws of the Surviving Corporation shall be
amended and restated to read the same as the Bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, until thereafter amended
in accordance with Delaware Law and as provided in such Bylaws; provided,
however, that at the Effective Time, the Bylaws shall be amended, to the
extent necessary, so as to comply with Section 5.10(a).

     1.5  Directors and Officers.  The initial directors of the Surviving
Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, until their respective successors are duly elected or
appointed and qualified.  The initial officers of the Surviving
Corporation shall be the officers of Merger Sub immediately prior to the
Effective Time, until their respective successors are duly appointed.

     1.6  Effect on Capital Stock.  Subject to the terms and conditions
of this Agreement, at the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Merger Sub, the Company or the
holders of any shares of capital stock of the Company, the following
shall occur:

          (a)  Company Common Stock.  Each share of the Common Stock, par
value $0.001 per share, of the Company ("Company Common Stock") issued
and outstanding immediately prior to the Effective Time, other than any
shares of Company Common Stock to be canceled pursuant to Section 1.6(c)
and any Dissenting Shares, will be canceled and extinguished and
automatically converted (subject to Section 1.6(f)) into the right to
receive $30.00 in cash, without interest (as may be adjusted, the "Per
Share Amount" and the sum of the Per Share Amounts, the "Merger
Consideration"), upon surrender of the certificate representing such
share of Company Common Stock in the manner provided in Section 1.7 (or
in the case of a lost, stolen or destroyed certificate, upon delivery of
an affidavit (and bond, if required) in the manner provided in Section
1.9).

          (b)  Repurchase Rights.  If any shares of Company Common Stock
outstanding immediately prior to the Effective Time are unvested or are
subject to a repurchase option, risk of forfeiture or other condition
under any applicable restricted stock purchase agreement or other
agreement with the Company ("Company Restricted Stock"), then the portion
of the Merger Consideration payable in exchange for such shares of
Company Common Stock will also be unvested and subject to the same
repurchase option, risk of forfeiture or other condition.  The Company
shall take all action that may be necessary to ensure that, from and
after the Effective Time, the Surviving Corporation is entitled to
exercise any such repurchase option or other right set forth in any such
restricted stock purchase agreement or other agreement.  The portion of
the Merger Consideration payable upon conversion of the Company
Restricted Stock shall be withheld and paid by the Merger Sub to such
holder in accordance with the vesting and other provisions set forth in
the applicable restricted stock purchase agreement or other agreement.

          (c)  Cancellation of Treasury and Parent Owned Stock.  Each
share of Company Common Stock held by the Company or Parent or any direct
or indirect wholly-owned Subsidiary of the Company or of Parent
immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof.

          (d)  Capital Stock of Merger Sub.  Each share of common stock,
par value $0.001, of Merger Sub (the "Merger Sub Common Stock") issued
and outstanding immediately prior to the Effective Time shall evidence
ownership of such shares of capital stock of the Surviving Corporation.

          (e)  Stock Options.  At the Effective Time, no outstanding
Company Options will be assumed by Parent, and unless otherwise exercised
by the holder thereof or purchased by the Company under Section 5.17, any
outstanding Company Options shall terminate on the Effective Time in
accordance with their terms.

          (f)  Adjustments to Per Share Amount.  The Per Share Amount
shall be adjusted to reflect fully the appropriate effect of any stock
split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into Company Common Stock),
reorganization, recapitalization, reclassification or other like change
with respect to Company Common Stock having a record date on or after the
date hereof and prior to the Effective Time.

     1.7  Surrender of Certificates.

          (a)  Payment Agent.  Parent shall select an institution to act
as the payment agent (the "Payment Agent") for the Merger.

          (b)  Parent to Provide Cash.  On or before the Effective Time,
Parent shall make available to the Payment Agent for exchange in
accordance with this Article I , the Merger Consideration deliverable
pursuant to Section 1.6(a) in exchange for the outstanding shares of
Company Common Stock.  Any cash deposited with the Payment Agent shall
hereinafter be referred to as the "Exchange Fund."

          (c)  Exchange Procedures.  As promptly as reasonably
practicable after the Effective Time, Parent shall cause the Payment
Agent to mail to each holder of record (as of the Effective Time) of a
certificate or certificates (the "Certificates") which immediately prior
to the Effective Time represented outstanding shares of Company Common
Stock whose shares were converted into the right to receive a portion of
the Merger Consideration pursuant to Section 1.6(a):  (i) a letter of
transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery
of the Certificates to the Payment Agent and shall be in such form and
have such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for a portion of the Merger Consideration.  Upon surrender of
Certificates for cancellation to the Payment Agent or to such other agent
or agents as may be appointed by Parent, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto and such other documents as may reasonably be
required by the Payment Agent, the holder of record of such Certificates
shall be entitled to receive in exchange therefor the portion of the
Merger Consideration (after taking into account all Certificates
surrendered by such holder of record) to which such holder is entitled
pursuant to Section 1.6(a), and the Certificates so surrendered shall
forthwith be canceled.  Until so surrendered, outstanding Certificates
will be deemed from and after the Effective Time, for all corporate
purposes, to evidence the ownership of the portion of the Merger
Consideration for which such shares of Company Common Stock shall have
been so converted.

          (d)  Required Withholding.  Each of the Payment Agent 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 Company 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 Legal Requirement.  To the extent such amounts are so deducted
or withheld, the amount of such consideration shall be treated for all
purposes under this Agreement as having been paid to the Person to whom
such consideration would otherwise have been paid.

          (e)  No Liability.  Notwithstanding anything to the contrary in
this Section 1.7, neither the Payment Agent, the Surviving Corporation
nor any party hereto shall be liable to a holder of shares of Company
Common Stock for any amount paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.

          (f)  Investment of Exchange Fund.  The Payment Agent shall
invest the cash included in the Exchange Fund as directed by Parent on a
daily basis; provided that no such investment or loss thereon shall
affect the amounts payable to Company stockholders pursuant to this
Article I.  Any interest and other income resulting from such investment
shall become a part of the Exchange Fund, and any amounts in excess of
the amounts payable to Company stockholders pursuant to this Article I
shall promptly be paid to Parent.

          (g)  Termination of Exchange Fund.  Any portion of the Exchange
Fund which remains undistributed to the holders of Certificates nine (9)
months after the Effective Time shall, at the request of Parent or the
Surviving Corporation, be delivered to the Surviving Corporation or
Parent or otherwise according to the instruction of the Surviving
Corporation or Parent, and any holders of the Certificates who have not
surrendered such Certificates in compliance with this Section 1.7 shall
after such delivery to Surviving Corporation look only to Parent or the
Surviving Corporation for the portion of the Merger Consideration
deliverable pursuant to Section 1.6(a) with respect to the shares of
Company Common Stock formerly represented thereby.  If any Certificate
shall not have been surrendered prior to two (2) years after the
Effective Time (or immediately prior to such time as such amounts would
otherwise escheat to or become property of any Governmental Entity), any
such portion of the Exchange Fund remaining unclaimed by holders of
shares of Company Common Stock immediately prior to such time shall, to
the extent permitted by law, become the property of Parent free and clear
of any claims or interest of any Person previously entitled thereto.

      1.8  No Further Ownership Rights in Company Common Stock.  The
Merger Consideration paid upon the surrender for exchange of shares of
Company 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 of Company Common Stock, and there shall be no further
registration of transfers on the records of the Surviving Corporation of
shares of Company Common Stock which 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
canceled and exchanged as provided in this Article I.

     1.9  Lost, Stolen or Destroyed Certificates.  In the event any
Certificates shall have been lost, stolen or destroyed, the Payment Agent
shall deliver in exchange for such lost, stolen or destroyed
Certificates, upon the making of an affidavit of that fact by the holder
thereof, the portion of the Merger Consideration to which the holder
thereof would have been entitled upon the delivery of such Certificate;
provided, however, that Parent or the Payment Agent may, in their sole
discretion and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed Certificates to deliver a
bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against Parent, the Company or the Payment Agent
with respect to the Certificates alleged to have been lost, stolen or
destroyed.

     1.10 Dissenting Shares.  Notwithstanding anything in this Agreement
to the contrary, shares of Company Common Stock which are issued and
outstanding immediately prior to the Effective Time and which are held by
stockholders properly exercising appraisal rights (the "Dissenting
Shares") available under Section 262 ("Section 262") of Delaware Law
shall not be converted into or be exchangeable for the right to receive
the portion of the Merger Consideration for which such shares of Company
Common Stock would otherwise have been entitled, unless and until such
holders shall have failed to perfect or shall have effectively withdrawn
or lost their rights to appraisal under Section 262.  If any such holder
shall have failed to perfect or shall have effectively withdrawn or lost
such right to appraisal, such holder's shares of Company Common Stock
shall thereupon be converted into and be exchangeable only for the right
to receive, as of the Effective Time, the portion of the Merger
Consideration to which such holder would have been entitled pursuant to
this Article I for such shares of Company Common Stock.  The Company
shall give Parent and Merger Sub (a) prompt notice of any written demands
for appraisal of any shares of Company Common Stock, attempted
withdrawals of such demands and any other instruments served pursuant to
Delaware Law and received by the Company relating to rights to be paid
the "fair value" of Dissenting Shares, as provided in Section 262 and (b)
the opportunity to participate in, and after the Closing, direct all
negotiations and proceedings with respect to demands for appraisal under
Section 262.  The Company shall not, except with the prior written
consent of Parent, voluntarily make or agree to make any payment with
respect to any demands for appraisals, or offer to settle or settle any
such demands or approve any withdrawals of any such demands.

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

                               ARTICLE II
             REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to Parent and Merger Sub,
subject to the exceptions specifically disclosed in writing in the
disclosure letter supplied by Company to Parent dated as of the date
hereof (the "Company Disclosure Letter"), as follows:

     2.1  Organization; Standing and Power; Charter Documents;
            Subsidiaries.

          (a)  Organization; Standing and Power.  The Company and each of
its Subsidiaries (i) is a corporation or other organization duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (except, in the case of
good standing, for entities organized under the laws of any jurisdiction
that does not recognize such concept), (ii) has the requisite power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted, and (iii) is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties
makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to so qualify or to be in good standing,
individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on the Company.  For purposes of this
Agreement, "Subsidiary," when used with respect to any party, shall mean
any corporation or other organization, whether incorporated or
unincorporated, at least a majority of the securities or other interests
of which having by their terms ordinary voting power to elect a majority
of the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries.

          (b)  Charter Documents.  The Company has furnished to Parent:
(i) a true and correct copy of the Certificate of Incorporation and
Bylaws of the Company, each as amended to date (collectively, the
"Company Charter Documents") and (ii) the certificate of incorporation
and bylaws, or like organizational documents (collectively, "Subsidiary
Charter Documents"), of each of its Subsidiaries, and each such
instrument is in full force and effect.  The Company is not in violation
of any of the provisions of the Company Charter Documents and no
Subsidiary of the Company is in violation of its respective Subsidiary
Charter Documents.

          (c)  Minutes. The Company has furnished to Parent and its
representatives true and complete copies of the minutes of all meetings
of the stockholders, the Board of Directors and each committee of the
Board of Directors of the Company and each of its Subsidiaries held since
December 31, 2002.

          (d)  Subsidiaries.  Section 2.1(d) of the Company Disclosure
Letter sets forth each Subsidiary of the Company.  All the outstanding
shares of capital stock of, or other equity or voting interests in, each
such Subsidiary have been validly issued and are fully paid and
nonassessable and, except as set forth in the footnotes to Section 2.1(d)
of the Company Disclosure Letter, are owned by the Company, a wholly-
owned Subsidiary of the Company, or the Company and another wholly-owned
Subsidiary of the Company, free and clear of all pledges, claims, liens,
charges, encumbrances, options and security interests of any kind or
nature whatsoever (any, a "Lien"), including any restriction on the right
to vote, sell or otherwise dispose of such capital stock or other
ownership interests, except for restrictions imposed by applicable
securities laws, and are duly authorized, validly issued, full paid and
nonassessable.  Other than the Subsidiaries of the Company, except as set
forth in Section 2.1(d) of the Company Disclosure Letter, neither the
Company nor any of its Subsidiaries owns any capital stock of, or other
equity or voting interests of any nature in, or any interest convertible,
exchangeable or exercisable for, capital stock of, or other equity or
voting interests of any nature in, any other Person.

     2.2  Capital Structure.

          (a)  Capital Stock.  The authorized capital stock of Company
consists of:  (i) 20,000,000 shares of Company Common Stock, par value
$0.001 per share and (ii) 2,000,000 shares of preferred stock, par value
$0.001 per share (the "Company Preferred Stock").  At the close of
business on the date hereof:  (i) 12,058,329 shares of Company Common
Stock were issued and outstanding, excluding shares of Company Common
Stock held by the Company in its treasury, (ii) no shares of Company
Common Stock were issued and held by the Company in its treasury, and
(iii) no shares of Company Preferred Stock were issued and outstanding.
No shares of Company Common Stock are owned or held by any Subsidiary of
the Company.  All of the outstanding shares of capital stock of the
Company are, and all shares of capital stock of the Company which may be
issued as contemplated or permitted by this Agreement will be, when
issued, duly authorized and validly issued, fully paid and nonassessable
and not subject to any preemptive rights.  Section 2.2(a) of the Company
Disclosure Letter sets forth a list of each holder of Company Restricted
Stock and (a) the name and location of the holder of such Company
Restricted Stock, (b) the number of shares of Company Restricted Stock
held by such holder, (c) the repurchase price of such Company Restricted
Stock, (d) the date on which such Company Restricted Stock was purchased
or granted, (e) the applicable vesting schedule pursuant to which the
Company's right of repurchase or forfeiture lapses, and (f) the extent to
which such Company right of repurchase or forfeiture has lapsed as of the
date hereof.  There are no commitments or agreements of any character to
which the Company is bound obligating Company to waive its right of
repurchase or forfeiture with respect to any Company Restricted Stock as
a result of the Merger (whether alone or upon the occurrence of any
additional or subsequent events).

          (b)  Stock Options.  As of the close of business on the date
hereof 1,437,676 shares of Company Common Stock are subject to issuance
pursuant to outstanding options to purchase Company Common Stock under
each stock option plan, stock award plan, stock appreciation right plan,
phantom stock plan, stock option, other equity or equity-based
compensation plan, equity or other equity based award to any Person
(whether payable in cash, shares or otherwise) (to the extent not issued
pursuant to any of the foregoing plans) or other plan or Contract of any
nature with any Person (whether or not an Employee) pursuant to which any
stock, option, warrant or other right to purchase or acquire capital
stock of the Company or right to payment based on the value of the
Company capital stock has been granted or otherwise issued (collectively,
"Company Stock Option Plans") (equity or other equity-based awards,
whether payable in cash, shares or otherwise granted under or pursuant to
the Company Stock Option Plans are referred to in this Agreement as
"Company Options").  Section 2.2(b) of the Company Disclosure Letter sets
forth a list of each outstanding Company Stock Option issued, and (a) the
particular Company Stock Option Plan (if any) pursuant to which such
Company Option was granted) (b) the name and location of the holder of
such Company Option, (c) the number of shares of Company Common Stock
subject to such Company Option, (d) the exercise price of such Company
Option, (e) the date on which such Company Option was granted, (f) the
applicable vesting schedule, and the extent to which such Company Option
is vested and exercisable as of the date hereof, and (g) the date on
which such Company Option expires.  All shares of Company Common Stock
subject to issuance under the Company Stock Option Plans, upon issuance
on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully
paid and nonassessable.  Except as set forth in Section 2.2(b) of the
Disclosure Letter, there are no commitments or agreements of any
character to which the Company is bound obligating Company to accelerate
the vesting of any Company Option as a result of the Merger (whether
alone or upon the occurrence of any additional or subsequent events).
There are no outstanding or authorized stock appreciation, phantom stock,
equity based profit participation or other similar rights with respect to
the Company.

          (c)  Voting Debt.  No bonds, debentures, notes or other
indebtedness of the Company or any of its Subsidiaries (i) having the
right to vote on any matters on which stockholders may vote (or which is
convertible into, or exchangeable for, securities having such right) or
(ii) the value of which is any way based upon or derived from capital or
voting stock of the Company, is issued or outstanding as of the date
hereof (collectively, "Company Voting Debt").

          (d)  Other Securities.  Except as otherwise set forth in this
Section 2.2 or the Company Disclosure Letter, as of the date hereof,
there are no securities, options, warrants, calls, rights, contracts,
commitments, agreements, instruments, arrangements, understandings,
obligations or undertakings of any kind to which the Company or any of
its Subsidiaries is a party or by which any of them is bound obligating
Company or any of its Subsidiaries to (including on a deferred basis)
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock, Company Voting Debt or other voting
securities of Company or any of its Subsidiaries, or obligating the
Company or any of its Subsidiaries to issue, grant, extend or enter into
any such security, option, warrant, call, right, commitment, agreement,
instrument, arrangement, understanding, obligation or undertaking. All
outstanding shares of Company Common Stock, all outstanding Company
Options, and all outstanding shares of capital stock of, or equity
interest in, each Subsidiary of the Company have been issued and granted
in compliance in all material respects with (i) all applicable securities
laws and all other applicable Legal Requirements and (ii) all
requirements set forth in applicable material Contracts.  Except for
shares of Restricted Stock, there are not any outstanding Contracts of
the Company or any of its Subsidiaries to (i) repurchase, redeem or
otherwise acquire any shares of capital stock of, or other equity or
voting interests in, the Company or any of its Subsidiaries or (ii)
dispose of any shares of the capital stock of, or other equity or voting
interests in, any of its Subsidiaries.  The Company is not a party to any
voting agreement with respect to shares of the capital stock of, or other
equity or voting interests in, the Company or any of its Subsidiaries
and, to the Knowledge of the Company, there are no irrevocable proxies
and no voting agreements, voting trusts, rights plans, anti-takeover
plans or registration rights agreements with respect to any shares of the
capital stock of, or other equity or voting interests in, the Company or
any of its Subsidiaries.  For purposes of this Agreement, "Legal
Requirements" shall mean any federal, state, local, municipal, foreign or
other law, statute, constitution, principle of common law, resolution,
ordinance, code, order, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or
otherwise put into effect by or under the authority of any Governmental
Entity.

     2.3  Authority; Non-Contravention; Necessary Consents.

          (a)  Authority.  The Company has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.  The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
has been duly authorized by all necessary corporate action on the part of
the Company and no other corporate proceedings on the part of the Company
are necessary to authorize the execution and delivery of this Agreement
or to consummate the Merger and the other transactions contemplated
hereby, subject only to the approval and adoption of this Agreement and
the approval of the Merger by the Company's stockholders and the filing
of the Certificate of Merger pursuant to Delaware Law.  The affirmative
vote of the holders of a majority of the outstanding shares of Company
Common Stock to approve and adopt this Agreement and approve the Merger
is the only vote of the holders of any class or series of Company capital
stock necessary to approve and adopt this Agreement, approve the Merger
and consummate the Merger and the other transactions contemplated hereby
(the "Company Stockholder Approval").  This Agreement has been duly
executed and delivered by the Company and, assuming due execution and
delivery by Parent and Merger Sub, constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms.

          (b)  Non-Contravention.  The execution and delivery of this
Agreement by the Company does not, and performance of this Agreement by
the Company will not:  (i) conflict with or violate the Company Charter
Documents or any Subsidiary Charter Documents, (ii) subject to obtaining
the approval and adoption of this Agreement and the approval of the
Merger by the Company's stockholders as contemplated in Section 5.2 and
compliance with the requirements set forth in Section 2.3(c), conflict
with or violate any material Legal Requirement applicable to the Company
or any of its Subsidiaries or by which the Company or any of its
Subsidiaries or any of their respective properties is bound or affected,
or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under,
or materially impair the Company's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company or
any of its Subsidiaries pursuant to, any Company Material Contract.
Section 2.3(b) of the Company Disclosure Letter lists all consents,
waivers and approvals under any of the Company's or any of its
Subsidiaries' Contracts required to be obtained in connection with the
consummation of the transactions contemplated hereby, which, if
individually or in the aggregate were not obtained, would result in a
material loss of benefits to the Company, Parent or the Surviving
Corporation as a result of the Merger.

          (c)  Necessary Consents.  No consent, approval, order or
authorization of, or registration, declaration or filing with any
supranational, national, state, municipal, local or foreign government,
any instrumentality, subdivision, court, administrative agency or
commission or other governmental authority or instrumentality, or any
quasi-governmental or private body exercising any regulatory, taxing,
importing or other governmental or quasi-governmental authority (a
"Governmental Entity") or any other Person is required to be obtained or
made by the Company in connection with the execution and delivery of this
Agreement or the consummation of the Merger and other transactions
contemplated hereby, except for:  (i) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in
which the Company and/or Parent are qualified to do business, (ii) the
filing of the Proxy Statement with the SEC in accordance with the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iii)
such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal,
foreign and state securities (or related) laws and the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and
satisfaction of such other requirements of the comparable laws of other
jurisdictions that the Parent reasonably determines to apply, and (iv)
such other consents, authorizations, filings, approvals and registrations
which if not obtained or made would not be material to the Company,
Parent or Merger Sub or materially adversely affect the ability of the
parties hereto to consummate the Merger within the time frame in which
the Merger would otherwise be consummated in the absence of the need for
such consent, approval, order, authorization, registration, declaration
or filings.  The consents, approvals, orders, authorizations,
registrations, declarations and filings set forth in (i) through (iv) are
referred to herein as the "Necessary Consents."

     2.4  SEC Filings; Financial Statements; Controls

          (a)  SEC Filings.  The Company has filed all required
registration statements, prospectuses, reports, schedules, forms,
statements and other documents (including exhibits and all other
information incorporated by reference) required to be filed by it with
the SEC since December 31, 2001.  All such required registration
statements, prospectuses, reports, schedules, forms, statements and other
documents (including those that the Company may file subsequent to the
date hereof) are referred to herein as the "Company SEC Reports."  As of
their respective dates, the Company SEC Reports (i) were prepared in
accordance and complied in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and regulations of the
SEC thereunder applicable to such Company SEC Reports and (ii) did not at
the time they were filed (or 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 the light of the circumstances under which they
were made, not misleading.  None of the Company's Subsidiaries is
required to file any forms, reports or other documents with the SEC.  The
Company has previously furnished to Parent a complete and correct copy of
any amendments or modifications, which have not yet been filed with the
SEC but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Company with the SEC
pursuant to the Securities Act or the Exchange Act.

          (b)  Financial Statements.  Each of the consolidated financial
statements (including, in each case, any related notes thereto) contained
in the Company SEC Reports (the "Company Financials"), including each
Company SEC Report filed after the date hereof until the Closing:  (i)
complied as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, (ii) was 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 interim financial statements, as may be permitted by the SEC on
Form 10-Q, 8-K or any successor form under the Exchange Act), and (iii)
fairly presented in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as at the
respective dates thereof and the consolidated results of the Company
operations and cash flows for the periods indicated.  The Company does
not intend to correct or restate, nor is there any basis for any
correction or restatement of, any aspect of the Company Financials.  The
balance sheet of the Company contained in the Company SEC Reports as of
September 30, 2005 is hereinafter referred to as the "Company Balance
Sheet."  Except as disclosed in the Company Financials, since the date of
the Company Balance Sheet, neither the Company nor any of its
Subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise) of a nature required to be disclosed on a consolidated balance
sheet or in the related notes to the consolidated financial statement
prepared in accordance with GAAP which are, individually or in the
aggregate, material to the business, results of operations or financial
condition of the Company and its Subsidiaries taken as a whole.

          (c)  Disclosure Controls and Procedures.  The Company has
established and maintains disclosure controls and procedures (as defined
in Rule 13a-15 under the Exchange Act).  Such disclosure controls and
procedures are designed to ensure that material information relating to
the Company, including its Subsidiaries, is made known to the Company's
principal executive officer and its principal financial officer by others
within those entities.  To the knowledge of the Company, based on its
evaluation of the Company's disclosure controls and procedures as of the
end of the Company's most recently completed fiscal quarter, such
disclosure controls and procedures are currently effective in timely
alerting the Company's principal executive officer and principal
financial officer to material information required to be included in the
Company's periodic and current reports required under the Exchange Act.

          (d)  Internal Control Over Financial Reporting.  The Company
has established and maintains a system of internal control over financial
reporting (as defined in Rule 13a-15 under the Exchange Act).  Based on
its evaluation of its internal control over financial reporting as of the
end of the Company's most recently completed fiscal quarter, such
internal control over financial reporting is sufficient to provide
reasonable assurance regarding the reliability of the Company's financial
reporting and the preparation of the Company's financial statements for
external purposes in accordance with GAAP.  Based on its most recent
evaluation of internal control over financial reporting and, to the
knowledge of the Company, since such evaluation, there are not any
significant deficiencies or material weaknesses known to the Company in
the design or operation of internal control over financial reporting
which could reasonably be expected to adversely affect in a material
respect the Company's ability to record, process, summarize and report
financial information or any material fraud known to the Company that
involves management or other employees who have a significant role in
internal control over financial reporting.  The Company has furnished to
Parent disclosures regarding material weaknesses, significant
deficiencies and fraud involving management or other employees who have a
significant role in internal control over financial reporting since
December 31, 2002.

     2.5  Absence of Certain Changes or Events.  Except as set forth in
Section 2.5 of the Company Disclosure Letter, since the date of the
Company Balance Sheet there has not been:  (i) any Material Adverse
Effect on the Company, (ii) any 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 of its Subsidiaries'
capital stock, or any purchase, redemption or other acquisition by the
Company or any of its Subsidiaries of any of the Company's capital stock
or any other securities of the Company or its Subsidiaries or any
options, warrants, calls or rights to acquire any such shares or other
securities except for repurchases from Employees following their
termination pursuant to the terms of their pre-existing stock option or
purchase agreements, (iii) any split, combination or reclassification of
any of the Company's or any of its Subsidiaries' capital stock; (iv) any
granting by the Company or any of its Subsidiaries of any increase in
compensation or fringe benefits, except for normal increases of cash
compensation in the ordinary course of business consistent with past
practice (other than to directors or executive officers of the Company),
or any payment by the Company or any of its Subsidiaries of any bonus,
except for bonuses made in the ordinary course of business consistent
with past practice (other than to directors or executive officers of the
Company), or any granting by the Company or any of its Subsidiaries of
any increase in severance or termination pay or any entry by the Company
or any of its Subsidiaries into any currently effective employment,
severance, termination or indemnification agreement or any agreement the
benefits of which are contingent or the terms of which are materially
altered upon the occurrence of a transaction involving the Company of the
nature contemplated hereby, (v) entry by the Company or any of its
Subsidiaries into any licensing or other agreement with regard to the
acquisition or disposition of any material Intellectual Property other
than licenses, distribution agreements, advertising agreements,
sponsorship agreements or merchant program agreements entered into in the
ordinary course of business consistent with past practice, (vi) any
amendment with respect to any Company Material Contract in effect, (vii)
any material change by the Company in its accounting methods, principles
or practices, except as required by concurrent changes in GAAP, or (viii)
any material revaluation by the Company of any of its assets, including
writing down the value of capitalized inventory or writing off notes or
accounts receivable other than in the ordinary course of business
consistent with past practice.

     2.6  Taxes

          (a)  Definition.  For the purposes of this Agreement, the term
"Tax" or, collectively, "Taxes" shall mean (i) any and all federal,
state, local and foreign 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,
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) of this Section 2.6(a) 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 clauses (i) or (ii) of this Section 2.6(a) 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.

          (b)  Tax Returns and Audits.

              (i)    The Company and each of its Subsidiaries have
prepared and timely filed all required federal, state, local and foreign
returns, estimates, information statements and reports ("Tax Returns")
relating to any and all Taxes concerning or attributable to the Company,
its Subsidiaries or their respective operations and such Returns are true
and correct and have been completed in accordance with applicable law.
              (ii)   The Company and each of its Subsidiaries have timely
paid all Taxes required to be paid and withheld with respect to their
Employees (and paid over to the appropriate Taxing authority) all federal
and state income taxes, Federal Insurance Contribution Act, Federal
Unemployment Tax Act and other Taxes required to be withheld.

              (iii)  Neither the Company nor any of its Subsidiaries has
been delinquent in the payment of any Tax, nor is there any Tax
deficiency outstanding, assessed or proposed against the Company or any
of its Subsidiaries, nor has the Company or any of its Subsidiaries
executed any waiver of any statute of limitations on or extending the
period for the assessment or collection of any Tax.

              (iv)   No audit or other examination of any Tax Return of
the Company or any of its subsidiaries is presently in progress, nor has
the Company or any of its Subsidiaries been notified of any request for
such an audit or other examination.

              (v)    Neither the Company nor any of its Subsidiaries has
any liabilities for unpaid Taxes which have not been accrued or reserved
on the Company Balance Sheet, whether asserted or unasserted, contingent
or otherwise, and neither the Company nor any of its subsidiaries has
incurred any liability for Taxes since the date of the Company Balance
Sheet other than in the ordinary course of business.

              (vi)   The Company has made available to Parent or its
legal counsel, copies of all Tax Returns for the Company and each of its
Subsidiaries filed for all periods since inception.

              (vii)  There are no Liens on the assets of the Company or
any of its Subsidiaries relating to or attributable to Taxes other than
Liens for Taxes not yet due and payable.  There is no basis for the
assertion of any claim relating or attributable to Taxes which, if
adversely determined, would result in any Lien for Taxes on the assets of
the Company or any of its subsidiaries.

              (viii) None of the assets of the Company or any of its
Subsidiaries is treated as "tax-exempt use property," within the meaning
of Section 168(h) of the Code.

              (ix)   Neither the Company nor any of its Subsidiaries is,
nor has been at any time, a "United States Real Property Holding
Corporation" within the meaning of Section 897(c)(2) of the Code.

              (x)    No adjustment relating to any Return filed by the
Company or any of its Subsidiaries has been proposed formally or, to the
Knowledge of the Company or any of its Subsidiaries, informally by any
tax authority to the Company, any of its Subsidiaries or any
representative thereof.

              (xi)   Neither the Company nor any of its Subsidiaries has
(a) ever been a member of an affiliated group (within the meaning of Code
Section 1504(a)) filing a consolidated federal income Tax Return (other
than a group the common parent of which was Company), (b) ever been a
party to any Tax sharing, indemnification or allocation agreement, nor
does the Company or any of its Subsidiaries owe any amount under any such
agreement (c) any liability for the Taxes of any person (other than
Company or any of its Subsidiaries) under Treas. Reg. Section 1.1502-6
(or any similar provision of state, local or foreign law), as a
transferee or successor, by contract, or otherwise and (d) ever been a
party to any joint venture, partnership or other agreement that could be
treated as a partnership for Tax purposes.

              (xii)  Neither the Company nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled
corporation" in a distribution of stock intended to qualify for tax-free
treatment under Section 355 of the Code (x) in the two years prior to the
date of this Agreement or (y) in a distribution which could otherwise
constitute part of a "plan" or "series of related transactions" (within
the meaning of Section 355(e) of the Code) in conjunction with the
Merger.

              (xiii) [Reserved]

              (xiv)  No claim has ever been made by any taxing authority
in a jurisdiction where the Company or any of its Subsidiaries do not
file Tax Returns that the Company or any of its Subsidiaries is or may be
subject to taxation within that jurisdiction.

              (xv)   Neither the Company nor any of its Subsidiaries has
consummated, has participated in, or is currently participating in any
transaction which was or is a "tax shelter," "listed transaction" or
"reportable transaction" as defined in Sections 6662, 6662A, 6011, 6012
or 6707A of the Code or the Treasury Regulations promulgated thereunder,
including, but not limited to, transactions identified by the Internal
Revenue Service by notice, regulation or other form of published guidance
as set forth in Treasury Regulations Section 1.6011-4(b)(2).

     2.7  Intellectual Property

          (a)  Definitions.  For the purposes of this Agreement, the
following terms have the following meanings:

              (i)    "Intellectual Property" shall mean any or all of the
following and all rights in, arising out of, or associated therewith: (a)
all United States, international and foreign patents and applications
therefor and all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof; (b) all inventions
(whether patentable or not), invention disclosures, improvements, trade
secrets, proprietary information, know how, technology, technical data
and customer lists, and all documentation relating to any of the
foregoing; (c) all copyrights, copyrights registrations and applications
therefor, and all other rights corresponding thereto throughout the
world; (d) all mask works, mask work registrations and applications
therefor, and any equivalent or similar rights in semiconductor masks,
layouts, architectures or topology; (e) domain names, uniform resource
locators ("URLs") and other names and locators associated with the
Internet (collectively, "Domain Names"), (f) all computer software,
including all source code, object code, firmware, development tools,
files, records and data, and all media on which any of the foregoing is
recorded; (g) all industrial designs and any registrations and
applications therefor throughout the world; (h) all trade names, logos,
common law trademarks and service marks, trademark and service mark
registrations and applications therefor throughout the world; (i) all
databases and data collections and all rights therein throughout the
world; (j) all moral and economic rights of authors and inventors,
however denominated, throughout the world, and (k) any similar or
equivalent rights to any of the foregoing anywhere in the world.

              (ii)   "Company Intellectual Property" shall mean any
Intellectual Property that is owned by, or created, invented, authored or
acquired by, or exclusively licensed to, the Company or any of its
Subsidiaries.

              (iii)  "Registered Intellectual Property" shall mean all
United States, international and foreign: (a) patents and patent
applications (including provisional applications); (b) registered
trademarks, applications to register trademarks, intent-to-use
applications, or other registrations or applications related to
trademarks; (c) registered copyrights and applications for copyright
registration; (d) Domain Name Registrations; and (e) any other
Intellectual Property that is the subject of an application, certificate,
filing, registration or other document issued, filed with, or recorded by
any Governmental Authority.

              (iv)   "Company Registered Intellectual Property" shall
mean all of the Registered Intellectual Property owned by, or filed in
the name of, the Company or any of its Subsidiaries.

          (b)  Registered Intellectual Property; Proceedings.  Section
2.7(b) of the Company Disclosure Letter sets forth (a) all Company
Registered Intellectual Property and specifies, where applicable, the
jurisdictions in which each such item of Company Registered Intellectual
Property has been issued, applied for or registered, and (b) all
proceedings or actions before any court or tribunal (including the United
States Patent and Trademark Office (the "PTO") or equivalent authority
anywhere else in the world) related to any of the Company Registered
Intellectual Property.

          (c)   Company Products.  Section 2.7(c) of the Company
Disclosure Letter sets forth a list (by name) of all products or service
offerings of the Company or any of its Subsidiaries (collectively,
"Company Products") that currently or within the 90-day period preceding
the date hereof have been sold, offered for sale, distributed or
otherwise disposed of or which the Company or any of its Subsidiaries
currently intends to license, sell, offer for sale or otherwise
distribute in the future, including any products or service offerings
under development.

          (d)  No Order.  Except as set forth in Section 2.7(d) of the
Company Disclosure Letter, no Company Intellectual Property or Company
Product is subject to any proceeding or outstanding order, Contract or
stipulation restricting in any manner the use, transfer, or licensing
thereof by Company or any of its Subsidiaries, or which may affect the
validity, use or enforceability of such Company Intellectual Property or
Company Product.

          (e)  Registration. Each item of Company Registered Intellectual
Property is valid and subsisting, all necessary registration, maintenance
and renewal fees currently due in connection with such Company Registered
Intellectual Property have been made and all necessary documents,
recordations and certificates in connection with such Company Registered
Intellectual Property have been filed with the relevant patent,
copyright, trademark or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of prosecuting,
maintaining or perfecting such Company Registered Intellectual Property.

          (f)  Further Actions.  Section 2.7(f) of the Company Disclosure
Letter sets forth a list of all actions that are required to be taken by
the Company within 120 days of the date hereof with respect to any of the
Company Registered Intellectual Property.

          (g)  Absence of Liens. The Company owns and has good and
exclusive title to each item of Company Intellectual Property owned by
it, free and clear of any Liens (excluding non-exclusive licenses and
related restrictions granted in the ordinary course of business
consistent with past practice).

          (h)  Third-Party Development.  To the extent that any product,
technology, software or Intellectual Property has been developed or
created independently or jointly (with the Company) by a third party for
the Company or any of its Subsidiaries, or is incorporated into any of
the Company Products, the Company and its Subsidiaries have a written
agreement (which is listed on Section 2.7(j)(ii) of the Company
Disclosure Letter) with such third party with respect thereto and, except
as set forth in Section 2.7(h) of the Company Disclosure Letter the
Company and its Subsidiaries thereby either (a) have obtained ownership
of, and are the exclusive owners of, or (b) have obtained perpetual, non-
terminable licenses (sufficient for the conduct of its business as
currently conducted and as proposed to be conducted) to all such third
party's Intellectual Property in such work, material or invention by
operation of law or by valid assignment, to the fullest extent it is
legally possible to do so.

          (i)  Transfers.  Neither the Company nor any of its
Subsidiaries has transferred ownership of, or granted any exclusive
license with respect to, any Intellectual Property that is or was Company
Intellectual Property, to any third party.  Neither the Company nor any
of its Subsidiaries has permitted the Company's rights in such Company
Intellectual Property to lapse or enter the public domain except where
such Intellectual Property is not material to the Company and the Company
has made a reasonable business judgment to permit such Company
Intellectual Property to lapse or enter the public domain.

          (j)  Licenses. Section 2.7(j)(i) of the Company Disclosure
Letter sets forth a list of all contracts, licenses and agreements to
which the Company or any of its Subsidiaries is a party with respect to
Company Intellectual Property licensed, disclosed or transferred to any
third party or under which any third party has otherwise been granted or
has any right with respect to any Company Intellectual Property ("Out-
Licenses").  Section 2.7(j)(ii) of the Company Disclosure Letter sets
forth a list of all contracts, licenses and agreements to which the
Company or any of its Subsidiaries is a party ("In-Licenses"), other than
"shrink wrap" and similar widely available commercial end-user licenses,
pursuant to which a third party has licensed, extended or permitted to
use or transferred, any Intellectual Property to the Company or any of
its Subsidiaries.  The Out-Licenses together with the In-Licenses, the
"Company IP Licenses".

          (k)  No Conflict.  All Company IP Licenses are in full force
and effect.  The consummation of the transactions contemplated by this
Agreement will neither violate nor result in the breach, modification,
cancellation, termination, suspension of, or acceleration of any payments
with respect to, any Company IP Licenses.  Each of the Company and its
Subsidiaries is in material compliance with, and has not materially
breached any term of any Company IP License and, to the Knowledge of the
Company, all other parties to the Company IP Licenses are in compliance
with, and have not materially breached any term of, any Company IP
Licenses.  Following the Closing Date, the Surviving Corporation will be
permitted to exercise all of the Company's and its Subsidiaries' rights
under the Company IP Licenses to the same extent the Company and its
Subsidiaries would have been able to had the transactions contemplated by
this Agreement not occurred and without the payment of any additional
amounts or consideration other than ongoing fees, royalties or payments
which the Company or any of its Subsidiaries would otherwise be required
to pay.  Neither this Agreement nor the transactions contemplated by this
Agreement, including the assignment to Parent or Merger Sub by operation
of law or otherwise of any contracts or agreements to which the Company
or any of its Subsidiaries are a party, will result in (A) either Parent
or the Merger Sub granting to any third party any right to or with
respect to any material Intellectual Property right owned by, or licensed
to, either of them, (B) either Parent or Merger Sub being bound by, or
subject to, any non-compete or other material restriction on the
operation or scope or their respective businesses, or (C) either Parent
or Merger Sub being obligated to pay any royalties or other material
amounts to any third party in excess of those payable by Parent or Merger
Sub, respectively, prior to the Closing.

          (l)  No Infringement.  The operation of the business of the
Company and its Subsidiaries as such business was conducted prior hereto,
as currently is conducted, and reasonably contemplated to be conducted,
including (a) the Company's and its Subsidiaries' design, development,
manufacture, distribution, reproduction, marketing or sale of the
products, software or services of the Company and its Subsidiaries
(including Company Products), and (b) the Company's use of any product,
device or process, has not, does not and will not infringe or
misappropriate the Intellectual Property of any third party or,
constitute unfair competition or unfair trade practices under the laws of
any jurisdiction.

          (m)  All Necessary Intellectual Property.  The Company
Intellectual Property constitutes all the material Intellectual Property
used in and/or necessary to the conduct of the business of the Company
and its Subsidiaries as it currently is conducted, and as it is currently
planned to be conducted by the Company and its Subsidiaries, including
the design, development, manufacture, use, import and sale of products,
technology and performance of services (including the Company Products).

          (n)  No Notice of Infringement. Neither the Company nor any of
its Subsidiaries has received notice from any third party that the
operation of the business of the Company or any of its Subsidiaries or
any act, product or service of the Company or any of its Subsidiaries,
infringes or misappropriates the Intellectual Property of any third party
or constitutes unfair competition or unfair trade practices under the
laws of any jurisdiction.

          (o)  No Third Party Infringement.  Except as set forth in
Section 2.7(o) of the Company Disclosure Letter, to the Knowledge of the
Company, no person has or is infringing or misappropriating any Company
Intellectual Property.

          (p)  Proprietary Information Agreements.  The Company and each
of its Subsidiaries has taken reasonable steps to protect the Company's
and its Subsidiaries' rights in the Company's confidential information
and trade secrets that it wishes to protect or any trade secrets or
confidential information of third parties provided to the Company or any
of its Subsidiaries, and, without limiting the foregoing, each of the
Company and its Subsidiaries has and enforces a policy requiring each
Employee to execute a proprietary information/confidentiality agreement
substantially in the form provided to Parent, and all Employees of the
Company and any of its Subsidiaries have executed such an agreement.  The
Company and its Subsidiaries take reasonable steps to protect the
confidentiality and security of their software, databases, systems,
networks and Internet Sites from any unauthorized use, access,
interruption or modification by third parties.

          (q)  Open Source.  No Company Product uses, incorporates or has
embedded in it any source, object or other software code subject to an
open source license or other similar type of license (including without
limitation, the GNU General Public License, Library Generally Public
License, Lesser General Public License, Mozilla License, Berkeley
Software Distribution License, Open Source Initiative license, MIT,
Apache or Public Domain Licenses), (each an "Open Source License"), and
no software subject to an Open Source License was used in the development
or design of any  Company Product.

          (r)  Source Code Escrow.  Neither the Company nor any of its
Subsidiaries is a party to any Contract which will require that the
computer software source code owned by the Company or any Subsidiary be
released from escrow, or access to such source code otherwise be provided
to any third party, as a result of the execution, delivery or
effectiveness of this Agreement or the consummation of any of the
transactions contemplated by this Agreement.

          (s)  No Defect.  All Company Products are free from any
material defect, bug, malware, virus or programming design or
documentation error or corruptant.

          (t)  Privacy.  The Company and its Subsidiaries fully comply in
all material respects with all relevant laws and regulations, and with
the Company's own policies with respect to the privacy of all users and
customers and any of their personally identifiable information, and no
written claims have been asserted or threatened against the Company or
any of its Subsidiaries by any person alleging a violation of any of the
foregoing.

     2.8  Compliance; Permits

          (a)  Compliance.  Neither the Company nor any of its
Subsidiaries is in conflict with, or in default or in violation of, any
Legal Requirement 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, or the Company believes is
reasonably likely to be, bound or affected, except for those conflicts,
defaults or violations that, individually or in the aggregate, would not
cause the Company to lose any material benefit or incur any material
liability.  No investigation or review by any Governmental Entity is
pending or, to the Knowledge of the Company, has been threatened, against
the Company or any of its Subsidiaries.  There is no material judgment,
injunction, order or decree binding upon the Company or any of its
Subsidiaries which has or would reasonably be expected to have the effect
of prohibiting or materially impairing any business practice of the
Company or any of its Subsidiaries, any acquisition of material property
by the Company or any of its Subsidiaries or the conduct of business by
the Company and its Subsidiaries as currently conducted.

          (b)  Permits.  The Company and its Subsidiaries hold, to the
extent legally required, all material permits, licenses, variances,
clearances, consents, commissions, franchises, exemptions, orders and
approvals from Governmental Entities ("Permits") that are required for
the operation of the business of the Company (collectively, "Company
Permits").  As of the date hereof, no suspension or cancellation of any
of the Company Permits is pending or, to the Knowledge of the Company,
threatened.  The Company and its Subsidiaries are in compliance in all
material respects with the terms of the Company Permits.

     2.9  Litigation.  Except as set forth in Section 2.9 of the Company
Disclosure Letter, there are no claims, suits, actions or proceedings
pending or, to the Knowledge of the Company, threatened against the
Company or any of its Subsidiaries, before any court, governmental
department, commission, agency, instrumentality or authority, or any
arbitrator that seeks to restrain or enjoin the consummation of the
transactions contemplated hereby or which would reasonably be expected,
either singularly or in the aggregate with all such claims, actions or
proceedings, to be material to the Company.

     2.10 Brokers' and Finders' Fees; Fees and Expenses.  Except for fees
payable to UBS Securities LLC pursuant to an engagement letter dated
August 11, 2004, as amended by letter agreement dated July 1, 2005, a
copy of which (including exhibits) has been provided to Parent, the
Company has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby, and, except for an Indemnification Agreement, dated
August 11, 2004, with UBS Securities LLC, the Company has not entered
into an indemnification agreement or arrangement with any Person in
connection with this Agreement and the transactions contemplated hereby.
 An itemized good faith estimate of the fees and expenses of any
accountant, broker, financial advisor, consultant, legal counsel or other
Person retained by the Company in connection with this Agreement or the
transactions contemplated hereby incurred or to be incurred by the
Company in connection with this Agreement and the transactions
contemplated thereby is set forth in Section 2.10 of the Company
Disclosure Letter.

     2.11 Transactions with Affiliates.  Except as set forth in the
Company SEC Reports, since the date of the Company's last proxy statement
filed with the SEC, no event has occurred that would be required to be
reported by the Company pursuant to Item 404 of Regulation S-K
promulgated by the SEC under the Securities Act.

     2.12  Employee Benefit Plans

          (a)  Schedule.  All employee compensation, incentive, fringe or
benefit plans, programs, policies, commitments, contracts (including each
material employment, severance, consulting, relocation, repatriation,
expatriation or other contract between the Company or any Affiliate (as
defined below) and any Employee (as defined below)) or other arrangements
(whether or not set forth in a written document and including, without
limitation, all "employee benefit plans" within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) covering any active, former employee, director or consultant
of Company (an "Employee," which shall for this purpose mean an Employee
of Company or any Affiliate (as defined below)), any subsidiary of
Company or any trade or business (whether or not incorporated) which is a
member of a controlled group or which is under common control with
Company within the meaning of Section 414 of the Code (an "Affiliate"),
or with respect to which Company has or may have liability, are listed in
Section 2.12(a) of the Company Schedule (the "Company Benefit Plans").

         (b)  Documents.  The Company has provided to Parent: (i) correct
and complete copies of all documents embodying each Company Benefit Plan,
including (without limitation) all amendments to each such Company
Benefit Plan, and all material written agreements and contracts relating
to each such Company Benefit Plan (including, but not limited to,
administrative service agreements, group annuity contracts and group
insurance contracts, trust agreements, and policies pertaining to
fiduciary liability insurance covering the fiduciaries for each Company
Benefit Plan); (ii) the three (3) most recent annual reports (Form Series
5500 and all schedules and financial statements attached thereto), if
any, required under ERISA or the Code in connection with each Company
Benefit Plan; (iii) the most recent summary plan description together
with the summary(ies) of material modifications thereto, if any, required
under ERISA with respect to each Plan; (iv) all Internal Revenue Service
(the "IRS") determination, opinion, notification and/or advisory letters;
(v) all correspondence to or from any governmental agency relating to any
Company Benefit Plan; (vi) all forms and notices pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"); (vii) all discrimination tests for each Company Benefit Plan
for the most recent three (3) plan years; (viii) the most recent annual
actuarial valuations, if any, prepared for each Company Employee Plan;
(ix) if the Company Employee Plan is funded, the most recent annual and
periodic accounting of plan assets; (x) all communications to Employees
relating to any Company Employee Plan and any proposed Company Employee
Plan, in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of
payments or vesting schedules, or other events which would result in any
material liability to Company or any Affiliate; and (xi) all registration
statements, annual reports (Form 11-K and all attachments thereto) and
prospectuses prepared in connection with any Company Employee Plan.

          (c)  Compliance.  Company has performed in all material
respects all obligations required to be performed by it under, is not in
default or violation of, and has no knowledge of any default or violation
by any other party to, each Company Employee Plan, and each Company
Employee Plan has been maintained and administered in all material
respects in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations,
including but not limited to ERISA and the Code, which are applicable to
each such plan.  No suit, action or other litigation (excluding claims
for benefits incurred in the ordinary course of plan activities) has been
brought, or to the knowledge of Company is threatened, against or with
respect to any such Company Employee Plan. There are no audits, inquiries
or proceedings pending or, to the knowledge of Company, threatened by the
IRS or Department of Labor (the "DOL") with respect to any Company
Employee Plan. All contributions, reserves or premium payments required
to be made or accrued as of the date hereof to any Company Employee Plan
has been timely made or accrued. Any Company Employee Plan intended to be
qualified under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code: (i) has either obtained a
favorable determination, notification, advisory and/or opinion letter, as
applicable, as to its tax-qualified status from the IRS or still has a
remaining period of time under applicable Treasury Regulations or IRS
pronouncements in which to apply for such letter and to make any
amendments necessary to obtain a favorable determination, and (ii)
incorporates or has been amended to incorporate all provisions required
to comply with the Tax Reform Act of 1986 and subsequent legislation.
Company does not have any plan or commitment to establish any new Company
Employee Plan, to modify any Company Employee Plan (except to the extent
required by law or to conform any such Company Employee Plan to the
requirements of any applicable law, in each case as previously disclosed
to Parent in writing, or as required by this Agreement), or to enter into
any new Company Employee Plan.  Each Company Employee Plan (other than
any stock option plan) can be amended, terminated or otherwise
discontinued after the Effective Time in accordance with its terms,
without liability to Parent, Company or any of its Affiliates (other than
ordinary administration expenses and expenses for benefits accrued but
not yet paid). No Company Employee Plan that is subject to Section 409A
of the Code has been materially modified (as defined under Section 409A
of the Code) since October 3, 2004 and all such non-qualified deferred
compensation plans or arrangements have been operated in good faith
compliance with Section 409A of the Code from December 31, 2004 through
the date hereof.

          (d)  Multiple Employer and Multiemployer Plans.  Neither
Company nor any of its Affiliates has at any time ever maintained,
established, sponsored, participated in, or contributed to any plan
subject to Title IV of ERISA or Section 412 of the Code.  At no time has
Company or any of its Affiliates contributed to or been obligated to
contribute to any "multiemployer plan," as such term is defined in
Section 3(37) of ERISA or to any plan described in Section 413 of the
Code.  Neither Company nor any of its Affiliates, nor any officer or
director of Company or any of its Affiliates is subject to any liability
or penalty under Section 4975 through 4980B of the Code or Title I of
ERISA. No "prohibited transaction," within the meaning of Section 4975 of
the Code or Sections 406 and 407 of ERISA, and not otherwise exempt under
Section 4975 of the Code, and Section 408 of ERISA, has occurred with
respect to any Company Employee Plan which could subject Company or its
Affiliates to material liabilities.

          (e)  Continuation Coverage.  No Company Benefit Plan provides
health benefits (whether or not insured), with respect to Employees after
retirement or other termination of service (other than coverage mandated
by applicable Legal Requirements or benefits, the full cost of which is
borne by the Employee) other than individual arrangements the amounts of
which are not material.

          (f)  International Employee Plans.  Except as set forth in
Section 2.12(f) of the Disclosure Letter, the Company does not now, nor
has it ever had the obligation to, maintain, establish, sponsor,
participate in, or contribute to any International Employee Plan.  As
used in this Agreement, "International Employee Plan" shall mean each
Company Benefit Plan that has been adopted or maintained by the Company
or any Affiliate, whether informally or formally, or with respect to
which the Company or any Affiliate will or may have any liability, for
the benefit of Employees who perform services outside the United States.

          (g)  Effect of Transaction.  Except as set forth in Section
2.12(g) of the Company Disclosure Letter, the execution of this Agreement
and the consummation of the transactions contemplated hereby will not
(either alone or upon the occurrence of any additional or subsequent
events) constitute an event under any Company Benefit Plan that will or
may result in any material payment (whether of severance pay or
otherwise), acceleration of payment, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee.  There is no contract, agreement,
plan or arrangement with an Employee to which the Company or any of its
Subsidiaries is a party as of the date of this Agreement, that,
individually or collectively and as a result of the transaction
contemplated hereby (whether alone or upon the occurrence of any
additional or subsequent events), would reasonably be expected to give
rise to the payment of any amount that would not be deductible pursuant
to Section 280G of the Code.

          (h)  Healthcare Compliance.  Neither the Company nor any
Affiliate has, prior to the Effective Time, violated any of the health
care continuation requirements of COBRA, the requirements of Family
Medical Leave Act of 1993, as amended, or the requirements of the Health
Insurance Portability and Accountability Act of 1996, or any amendment to
each such act, or any similar provisions of state law applicable to its
Employees, except where the violation, individually or in the aggregate,
would not be material the Company.

          (i)  Labor.  The Company is not presently, nor has it been in
the past, a party to, or bound by, any collective bargaining agreement or
union contract with respect to Employees and no collective bargaining
agreement is being negotiated by the Company or any of its Subsidiaries.
 To the Knowledge of the Company, there are no activities or proceedings
of any labor union to organize any Employees.  There is no labor dispute,
strike or work stoppage against the Company or any of its Subsidiaries
pending or, to the Knowledge of the Company, threatened or reasonably
anticipated which may materially interfere with the respective business
activities of the Company or any of its Subsidiaries.  None of the
Company, any of its Subsidiaries or any of their respective
representatives or Employees has committed any material unfair labor
practice in connection with the operation of the respective businesses of
the Company or any of its Subsidiaries. There are no actions, suits,
claims, labor disputes or grievances pending, or, to the knowledge of the
Company, threatened or reasonably anticipated relating to any labor,
safety or discrimination matters involving any Employee, including
charges of unfair labor practices or discrimination complaints, which, if
adversely determined, would, individually or in the aggregate, be
material to the Company.  Neither the Company nor any of its Subsidiaries
has engaged in any unfair labor practices within the meaning of the
National Labor Relations Act.

     2.13 Title to Properties

          (a)  Properties.  Section 2.13(a)(i) of the Company Disclosure
Letter sets forth a list of all real property currently owned by the
Company or any of its Subsidiaries (the "Owned Real Property").  Section
2.13(a)(ii) of the Company Disclosure Letter sets forth a list of all
real property currently leased, licensed, subleased or otherwise occupied
by the Company or any of its Subsidiaries excluding the Owned Real
Property (collectively, the "Leased Real Property"), the name of the
lessor, the date of the relevant occupancy agreement and each amendment
thereto and the aggregate annual rental and/or other fees payable under
any such lease (collectively, the "Leases").  All such current Leases are
in full force and effect, are valid and effective in accordance with
their respective terms, and there is not, under any of such Leases, any
existing default or event of default (or event which with notice or lapse
of time, or both, would constitute a default).   The Leased Real Property
and the Owned Real Property shall be collectively referred to herein as
the "Company Real Property").

          (b)  Condition of Company Real Property.  Except as otherwise
described in Section 2.13(b) of the Company Disclosure Letter: (i) there
are no structural, electrical, mechanical, plumbing, roof, paving or
other defects in any improvements located on any of the Owned Real
Property as could, either individually or in the aggregate, have a
material and adverse effect on the use, development, occupancy or
operation thereof, (ii) to the Knowledge of the Company, there are no
natural or artificial conditions upon any Owned Real Property or any
other facts or conditions which could, in the aggregate, have a material
and adverse effect on the transferability, financeability, ownership,
leasing, use, development, occupancy or operation of any such real
property, (iii) neither the Company nor any of its Subsidiaries has
received any notice from any insurance company of any defects or
inadequacies in any Company Real Property or any part thereof which could
materially and adversely affect the insurability of such property or the
premiums for the insurance thereof, nor has any notice been given by any
insurer of any such property requesting the performance of any repairs,
alterations or other work with which compliance has not been made, and
(iv) there are no pending, or, to the Knowledge of the Company,
threatened condemnation or eminent domain actions or proceedings, or any
special assessments or other activities of any public or quasi-public
body that are reasonably likely to materially and adversely affect the
Owned Real Property.  To the Knowledge of the Company, neither the
Company nor any of its Subsidiaries will be required to incur more than
$100,000 to restore any Leased Real Property at the end of the term of
any Lease.

          (c)  Valid Title.  The Company and each of its Subsidiaries has
good and valid title to, or, in the case of leased properties and assets,
valid leasehold interests in, all of its tangible properties and assets,
real, personal and mixed, used or held for use in its business, free and
clear of any Liens, except for Liens imposed by law in respect of
obligations not yet due which are owed in respect of taxes and Liens
which are not material in character, amount or extent, and which do not
materially detract from the value, or materially interfere with the
present use, of the property subject thereto or affected thereby.

     2.14 Environmental Matters

          (a)  Hazardous Material.  Except as would not reasonably be
expected to result in a material liability to the Company or any of its
Subsidiaries, no underground storage tanks and no amount of any substance
that has been designated by any Governmental Entity or by applicable
foreign, federal, state, provincial or local Legal Requirement to be
radioactive, toxic, hazardous or otherwise a danger to health or the
environment, including PCBs, asbestos, petroleum, toxic mold, urea-
formaldehyde and all substances listed as hazardous substances pursuant
to the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, or defined as a hazardous waste pursuant to the
United States Resource Conservation and Recovery Act of 1976, as amended,
and the regulations promulgated pursuant to said laws, but excluding
office and janitorial supplies properly and safely maintained, (a
"Hazardous Material") are present, as a result of the actions of the
Company or any of its Subsidiaries or any affiliate of the Company, or,
to the Company's Knowledge, as a result of any actions of any third party
or otherwise, in, on or under any property, including the land and the
improvements, ground water and surface water thereof, that the Company or
any of its Subsidiaries has at any time owned, operated, occupied or
leased.

          (b)  Hazardous Materials Activities.  Neither the Company nor
any of its Subsidiaries has transported, stored, used, manufactured,
disposed of, released, removed or exposed its Employees or others to
Hazardous Materials or manufactured any product containing a Hazardous
Material (collectively "Hazardous Materials Activities") in violation, in
any material respect, of any Legal Requirement or in a manner which has
caused or could reasonably be expected to cause an adverse health effect
to any such person.   There are no facts or circumstances likely to
prevent or delay the ability of the Company or any its Subsidiaries to
comply, when required, with the European Directive 2002/96/EC on waste
electrical and electronic equipment ("WEEE Directive") or European
Directive 2002/95/EC on the restriction of the use of certain hazardous
substances in electrical and electronic equipment ("RoHS Directive") and
Section 2.14(b) of the Company Disclosure Letter lists all products of
the Company or any of its Subsidiaries which are subject to the RoHS
Directive which will not be in compliance with the RoHS Directive as of
the Closing.

          (c)  Neither the Company nor any of its Subsidiaries have
entered into any agreement that may require any of them to guarantee,
reimburse, pledge, defend, hold harmless, or indemnify any other party
with respect to any material liabilities arising out of the Hazardous
Material Activities of the Company or any of its Subsidiaries or any
Legal Requirement relating to the environment, natural resources,
pollution, worker safety or exposure of any individual to a Hazardous
Material ("Environmental Law").

          (d)  Permits.  The Company and its subsidiaries currently hold
all Permits (the "Company Environmental Permits") necessary for the
conduct of the Company's and its Subsidiaries' Hazardous Material
Activities and other businesses of the Company and its Subsidiaries as
such activities and businesses are currently being conducted.

          (e)  Environmental Liabilities.  No action, proceeding,
revocation proceeding, amendment procedure, writ or injunction is
pending, and to the Company's Knowledge, no action, proceeding,
revocation proceeding, amendment procedure, writ or injunction has been
threatened by any Governmental Entity, against the Company or any of its
Subsidiaries concerning any Company Environmental Permit, Hazardous
Material or any Hazardous Materials Activity of the Company or any of its
Subsidiaries. The Company is not aware of any fact or circumstance which
could reasonably be expected to result in a material liability to the
Company or any of its Subsidiaries arising out of the Hazardous Materials
Activities of the Company or any of its Subsidiaries or pursuant to any
Environmental Law.

          (f)  Environmental Documents.  The Company has made available
for inspection by Parent and its agents and representatives all records
in the Company's or any Subsidiary's possession or control concerning the
Hazardous Material Activities of the Company or its Subsidiaries, all
environmental assessments, audits, and sampling reports, Company
Environmental Permits, and material correspondence with any Governmental
Entity relating to Environmental Laws.

     2.15  Contracts

          (a)  Material Contracts.  For purposes of this Agreement,
"Company Material Contract" shall mean:

              (i)    any "material contracts" (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC) with respect to the Company
and its Subsidiaries;

              (ii)   any employment or consulting Contract with any
executive officer or other employee of the Company earning an annual
salary in excess of $100,000 or member of the Company's Board of
Directors, other than those that are terminable by the Company or any of
its Subsidiaries on no more than 30 days notice without liability or
financial obligation to the Company;

              (iii)  any Contract or plan, including any stock option
plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
contemplated by this Agreement;

              (iv)   any agreement of indemnification or any guaranty
other than any agreement of indemnification entered into in connection
with the sale or license of hardware or software products in the ordinary
course of business;

              (v)    any Contract containing any covenant (A) limiting in
any respect the right of the Company or any of its Subsidiaries to engage
in any line of business, to make use of any material Intellectual
Property or compete with any Person in any material line of business or
to compete with any person, (B) granting any exclusive distribution
rights, or (C) otherwise having an adverse effect on the right of the
Company and its Subsidiaries to sell, distribute or manufacture any
material products or services or to purchase or otherwise obtain any
material software, components, parts or subassemblies;

              (vi)   any Contract relating to the disposition or
acquisition by the Company or any of its Subsidiaries, after the date of
this Agreement, of a material amount of assets not in the ordinary course
of business or pursuant to which the Company or any of its Subsidiaries
has any material ownership interest in any other Person or other business
enterprise other than the Company's Subsidiaries;

              (vii)  any dealer, distributor, joint marketing or
development agreement under which the Company or any of its Subsidiaries
have continuing material obligations to jointly market any product,
technology or service and which may not be canceled without penalty upon
notice of 30 days or less, or any material agreement pursuant to which
the Company or any of its Subsidiaries have continuing material
obligations to jointly develop any Intellectual Property that will not be
owned, in whole or in part, by the Company or any of its Subsidiaries and
which may not be terminated without liability or financial obligation to
the Company upon notice of 30 days or less;

              (viii) any Contract to provide source code to any third
party for any product or technology that is material to the Company and
its Subsidiaries taken as a whole;

              (ix)   any Contract containing any material support,
maintenance or service obligation on the part of the Company or any of
its Subsidiaries, other than those obligations that are terminable by the
Company or any of its Subsidiaries on no more than 30 days notice without
liability or financial obligation to the Company or its Subsidiaries;

              (x)    any Contract to license any third party to
manufacture or reproduce any of the Company's products, services or
technology or any Contract to sell or distribute any of the Company's
products, services or technology, except agreements with distributors or
sales representative in the ordinary course of business consistent with
past practice and terminable without liability or financial obligation to
the Company upon notice of 30 days or less and substantially in the form
previously provided to Parent;

              (xi)   any mortgages, indentures, guarantees, loans or
credit agreements, security agreements or other Contracts relating to the
borrowing of money or extension of credit, other than accounts
receivables and payables in the ordinary course of business;

              (xii)  any material settlement agreement entered into
within five (5) years prior to the date of this Agreement;

              (xiii) any other agreement, contract or commitment (other
than purchase orders from customers in the ordinary course of business
consistent with past practices for the Company's standard products) that
has a value of $250,000 or more in any individual case or which relates
to one of Company's customers or affiliates listed on Section
2.15(a)(xiii) of the Company Disclosure Letter which sets forth a list of
the Company's top ten customers by related revenue for the four fiscal
quarters ended September 30, 2005; or

              (xiv)  any Contract, or group of Contracts with a Person
(or group of affiliated Persons), the termination or breach of which
would be reasonably expected to have a material adverse effect on any
material division or business unit or other material operating group of
product or service offerings of the Company or otherwise have a Material
Adverse Effect on the Company.

          (b)  Schedule.  Section 2.15(b) of the Company Disclosure
Letter sets forth a list of all Company Material Contracts to which the
Company or any of its Subsidiaries is a party or is bound by as of the
date hereof which are described in Sections 2.15(a)(i) through
2.15(a)(xiv) hereof.

          (c)  No Breach.  All Company Material Contracts are valid and
in full force and effect except to the extent they have previously
expired in accordance with their terms or if the failure to be in full
force and effect, individually or in the aggregate, would not reasonably
be expected to be material to the Company.  Neither the Company nor any
of its Subsidiaries has violated any provision of, or committed or failed
to perform any act which, with or without notice, lapse of time or both
would constitute a default under the provisions of, any Company Material
Contract, except in each case for those violations and defaults which,
individually or in the aggregate, would not reasonably be expected to be
material to the Company.

          (d)  Contracts.  For purposes of this Agreement, "Contracts"
shall mean any written, oral or other agreement, contract, subcontract,
settlement agreement, lease, binding understanding, instrument, note,
option, warranty, purchase order, license, sublicense, insurance policy,
benefit plan or legally binding commitment or undertaking of any nature,
as in effect as of the date hereof or as may hereinafter be in effect.

          (e)  Rights.  Upon consummation of the Merger, Parent will
automatically succeed to, and become entitled to, exercise the Company's
rights and remedies under any Contract to which the Company or any of its
Subsidiaries is a party.

     2.16 Disclosure.  None of the information supplied or to be supplied
by or on behalf of the Company for inclusion or incorporation by
reference in the proxy statement to be filed by the Company with the SEC
(the "Proxy Statement"), will, at the time the Proxy Statement is mailed
to the stockholders of the Company, at the time of the Stockholders'
Meeting or as of the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading.
The Proxy Statement will comply as to form in all material respects with
the provisions of the Exchange Act and the rules and regulations
promulgated by the SEC thereunder.  Notwithstanding the foregoing, no
representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein about Parent
supplied by Parent for inclusion or incorporation by reference in the
Proxy Statement.

     2.17 Board Approval.  The Board of Directors of the Company has, by
resolutions duly adopted by unanimous vote at a meeting of all Directors
duly called and held and not subsequently rescinded or modified in any
way (the "Company Board Approval") has duly (i) determined that the
Merger is fair to, and in the best interests of, the Company and its
stockholders and declared the Merger to be advisable, (ii) approved this
Agreement and the transactions contemplated thereby, including the
Merger, and (iii) recommended that the stockholders of the Company
approve and adopt this Agreement and approve the Merger and directed that
such matter be submitted to Company's stockholders at the Stockholders'
Meeting.

     2.18 Fairness Opinion.  The Company's Board of Directors has
received a written opinion from UBS Securities LLC, dated as of February
17, 2006, in customary form to the effect that, as of such date, the Per
Share Merger Consideration is fair, from a financial point of view, to
the Company stockholders (the "Company Fairness Opinion").

    2.19 Takeover Statutes.  The Board of Directors of the Company has
taken all steps necessary to exclude the applicability of any
"moratorium", "control share acquisition", "business combination", "fair
price" or other form of anti-takeover Legal Requirements of any
jurisdiction that may purport to be applicable to this Agreement and no
such Legal Requirement will apply to Parent or Merger Sub during the
pendency of this Agreement, including the execution, delivery or
performance of this Agreement and the consummation of the Merger and the
other transactions contemplated hereby.

                              ARTICLE III
                REPRESENTATIONS AND WARRANTIES OF PARENT
                            AND MERGER SUB

     Parent and Merger Sub represent and warrant to the Company, subject
to the exceptions specifically disclosed in writing in the disclosure
letter supplied by Parent and Merger Sub to the Company dated as of the
date hereof (the "Parent Disclosure Letter"), as follows:

     3.1  Organization; Standing and Power; Charter Documents;
          Merger Sub.

          (a)  Organization; Standing and Power.  Each of Parent and
Merger Sub is a corporation or other organization duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (except, in the case of good standing, for
entities organized under the laws of any jurisdiction that does not
recognize such concept), has the requisite power and authority to own,
lease and operate its properties and to carry on its business as now
being conducted and is duly qualified or licensed and in good standing to
do business in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such qualification
necessary, other than in such jurisdictions where the failure to be so
organized, existing and in good standing or so qualified, individually or
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Parent.

          (b)  Charter Documents.  Parent has delivered or made available
to the Company a true and correct copy of the Certificate of
Incorporation and Bylaws of Parent and Merger Sub, each as amended to
date (collectively, the "Parent Charter Documents").  Parent is not in
violation of any of the provisions of the Parent Charter Documents.

     3.2  Authority; Non-Contravention; Necessary Consents.

         (a)  Authority.  Each of Parent and Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.  The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Parent and Merger Sub and no other corporate
proceedings on the part of Parent or Merger Sub are necessary to
authorize the execution and delivery of this Agreement or to consummate
the Merger and the other transactions contemplated hereby, subject only
to the approval and adoption of this Agreement and the approval of  the
Merger by Parent as Merger Sub's sole stockholder and the filing of the
Certificate of Merger pursuant to Delaware Law.  This Agreement has been
duly executed and delivered by Parent and Merger Sub and, assuming due
execution and delivery by the Company, constitutes valid and binding
obligations of Parent, enforceable against Parent and Merger Sub in
accordance with its terms.

          (b)  Non-Contravention.  The execution and delivery of this
Agreement by Parent and Merger Sub does not, and performance of this
Agreement by Parent will not:  (i) conflict with or violate the Parent
Charter Documents or the certificate of incorporation or bylaws of Merger
Sub, (ii) subject to compliance with the requirements set forth in
Section 3.2(c), conflict with or violate any material Legal Requirement
applicable to Parent, Merger Sub or any of Parent's other Subsidiaries or
by which Parent, Merger Sub or any of Parent's other Subsidiaries or any
of their respective properties is bound or affected, or (iii) result in
any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or materially impair
Parent's rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on
any of the properties or assets of Parent or any of its Subsidiaries
pursuant to, any Contract to which Parent or any of its Subsidiaries is a
party the termination or breach of which would have a Material Adverse
Effect on Parent.  Section 3.2(b) of the Parent Disclosure Letter lists
all consents, waivers and approvals under any of Parent's Contracts
required to be obtained in connection with the consummation of the
transactions contemplated hereby, which, if individually or in the
aggregate were not obtained, would result in a Material Adverse Effect on
Parent or the Surviving Corporation.

          (c)  Necessary Consents.  No consent, approval, order or
authorization of, or registration, declaration or filing with any
Governmental Entity or any other Person is required to be obtained or
made by Parent in connection with the execution and delivery of this
Agreement or the consummation of the Merger and other transactions
contemplated hereby, except for the Necessary Consents.

     3.3  SEC Filings; Financial Statements.  Each of the consolidated
financial statements (including, in each case, any related notes thereto)
contained in the Form 10-K for the fiscal year ended September 30, 2005
(as amended prior to the date hereof) and the Form 10-Q for the fiscal
quarter ended December 31, 2005 (the "Parent Financials"):  (i) complied
as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, (ii) was prepared in
accordance with 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 interim financial statements, as may be permitted by the SEC
on Form 10-Q, 8-K or any successor form under the Exchange Act), and
(iii) fairly presented in all material respects the consolidated
financial position of Parent and its consolidated Subsidiaries as at the
respective dates thereof and the consolidated results of Parent's
operations and cash flows for the periods indicated.  The balance sheet
of Parent contained in the Form 10-Q for the quarter ended December 31,
2005 as of December 31, 2005 is hereinafter referred to as the "Parent
Balance Sheet."  Except as disclosed in the Parent Financials, since the
date of the Parent Balance Sheet, neither Parent nor any of its
Subsidiaries has any liabilities required under GAAP to be set forth on a
consolidated balance sheet (absolute, accrued, contingent or otherwise)
which, individually or in the aggregate, would have a Material Adverse
Effect on Parent.

     3.4  Disclosure.  None of the information supplied or to be supplied
by or on behalf of Parent and Merger Sub for inclusion or incorporation
by reference in the Proxy Statement, will, at the time the Proxy
Statement is mailed to the stockholders of Company, the time of the
Stockholders' Meeting or as of the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.  Notwithstanding the foregoing, no representation or warranty
is made by Parent with respect to statements made or incorporated by
reference therein about the Company.

     3.5  Board Approval.  The Board of Directors of Parent has, by
resolutions duly adopted by unanimous vote at a meeting of all Directors
duly called and held and not subsequently rescinded or modified in any
way, duly (i) determined that the Merger is fair to, and in the best
interests of, Parent and its stockholders and declared the Merger to be
advisable, and (ii) approved this Agreement and the transactions
contemplated hereby, including the Merger.

     3.6  No Prior Merger Sub Operations.  Merger Sub was formed solely
for the purpose of effecting the Merger and has not engaged in any
business activities or conducted any operations other than in connection
with the transactions contemplated hereby.

     3.7  Financing.  Parent will have at the Closing, after taking into
account cash on hand of Parent and the Company immediately prior to the
Closing and proceeds from a planned Financing, sufficient cash to satisfy
its obligations under Section 1.7(b).

                               ARTICLE IV
           CONDUCT BY THE COMPANY PRIOR TO THE EFFECTIVE TIME

     4.1  Conduct of Business by the Company.

          (a)  Ordinary Course.  During the period from the date hereof
and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, the Company and each of its
Subsidiaries shall, except as otherwise expressly contemplated by this
Agreement or to the extent that Parent shall otherwise consent in
writing, (i) carry on its business in the usual, regular and ordinary
course, in substantially the same manner as heretofore conducted and in
material compliance with all applicable laws and regulations, (ii) pay
its debts and taxes when due, pay or perform other material obligations
when due, and (iii) use all reasonable efforts consistent with past
practices and policies to (x) preserve intact its present business
organization, (y) keep available the services of its present executive
officers and Employees, and (z) preserve its relationships with
customers, suppliers, licensors, licensees, and others with which it has
business dealings.  In addition, the Company shall promptly notify in
writing Parent of any material adverse event involving its business or
operations.

          (b)  Required Consent.  In addition, without limiting the
generality of Section 4.1(a), except as permitted by the terms of this
Agreement, and except as provided in Article IV of the Company Disclosure
Letter, without the prior written consent of Parent, during the period
from the date hereof and continuing until the earlier of the termination
of this Agreement pursuant to its terms or the Effective Time, the
Company shall not do any of the following, and shall not permit any of
its Subsidiaries to do any of the following:

              (i)     Enter into any new line of business;

              (ii)    Declare, set aside or pay any dividends on or make
any other distributions (whether in cash, stock, equity securities or
property) in respect of any capital stock or split, combine or reclassify
any capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for any capital
stock, other than any such transaction by a wholly-owned Subsidiary of it
that remains a wholly-owned Subsidiary of it after consummation of such
transaction, in the ordinary course of business consistent with past
practice;

              (iii)   Purchase, redeem or otherwise acquire, directly or
indirectly, any shares of its capital stock or the capital stock of its
Subsidiaries, except repurchases of unvested shares at cost in connection
with the termination of the employment relationship with any Employee
pursuant to stock option or purchase agreements in effect on the date
hereof;

              (iv)    Issue, deliver, sell, authorize, pledge or
otherwise encumber any shares of capital stock, Company Voting Debt or
any securities convertible into shares of capital stock or Company Voting
Debt, or subscriptions, rights, warrants or options to acquire any shares
of capital stock or Company Voting Debt or any securities convertible
into shares of capital stock or Company Voting Debt, or enter into other
agreements or commitments of any character obligating it to issue any
such securities or rights, other than:  (A) issuances of Company Common
Stock upon the exercise of Company Options, warrants or other rights of
the Company existing on the date hereof in accordance with their present
terms or granted pursuant to clause (B) hereof, (B) grants of stock
options or other stock based awards of or to acquire, Company Common
Stock granted under the Company Stock Option Plans outstanding on the
date hereof, in each case in the ordinary course of business consistent
with past practices to new hires and which options or stock based awards
have a vesting schedule no more favorable than one-quarter (1/4) on the
first anniversary of the date of hire, and one-forty-eighth (1/48) on
each monthly anniversary of the date of hire thereafter and do not
accelerate, or become subject to acceleration, directly or indirectly, as
a result of the approval or consummation of the Merger and/or termination
of employment following the Merger, but in no event shall the period for
exercisability under such option following termination of employment be
extended beyond 90 days following a termination of employment for any
reason other than retirement, death or total and permanent disability
("Routine Grants");

              (v)     Cause, permit or propose any amendments to the
Company Charter Documents or any of the Subsidiary Charter Documents of
the Company's Subsidiaries;

              (vi)    Acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity or voting interest in or
a portion of the assets of, or by any other manner, any business or any
Person or division thereof, or otherwise acquire or agree to acquire any
assets which are material, individually or in the aggregate, to the
business of the Company;

              (vii)   Enter into any binding agreement, agreement in
principle, letter of intent, memorandum of understanding or similar
agreement with respect to any material joint venture, strategic
partnership or alliance;

              (viii)  Sell, lease, license, encumber or otherwise dispose
of any properties or assets except (A) the sale, lease or disposition
(other than through licensing) of property or assets which are not
material, individually or in the aggregate, to the business of Company
and its subsidiaries or (B) the licenses of current Company Products in
the ordinary course of business and in a manner consistent with past
practice having a term of less than or equal to 12 months, and having no
material support, maintenance or service obligation, other than those
obligations that are terminable by the Company or any of its Subsidiaries
on no more than 30 days notice without liability or financial obligation
to the Company;

              (ix)    Make any loans, advances or capital contributions
to, or investments in, any other Person, other than:  (A) loans or
investments by it or a wholly-owned Subsidiary of it to or in it or any
wholly-owned Subsidiary of it, or (B) employee loans or advances for
travel and entertainment expenses made in the ordinary course of business
consistent with past practices;

              (x)     Except as required by GAAP or the SEC as concurred
in by its independent registered public accounting firm, make any
material change in its methods, principles or practices of accounting
since the date of the Company Balance Sheet;

              (xi)    Make any Tax election or accounting method change
that, individually or in the aggregate, is reasonably likely to adversely
affect in any material respect the tax liability or tax attributes of the
Company or any of its subsidiaries or settle or compromise any material
income tax liability or consent to any extension or waiver of any
limitation period with respect to Taxes;

              (xii)   Revalue any of its assets;

              (xiii)  (A) Pay, discharge, settle or satisfy any claims
(including any Tax claim), liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), or litigation (whether
or not commenced prior to the date of this Agreement) other than the
payment, discharge, settlement or satisfaction for money, of claims,
liabilities, obligations or litigation (x) in the ordinary course of
business consistent with past practice or in accordance with their terms,
of claims not in excess of $500,000 individually or $1,000,000 in the
aggregate or (y) to the extent subject to reserves on the Company
Financials existing as of the date hereof in accordance with GAAP, or (B)
waive the benefits of, agree to modify in any manner, terminate, release
any person from or knowingly fail to enforce any confidentiality or
similar agreement to which Company or any of its subsidiaries is a party
or of which Company or any of its subsidiaries is a beneficiary;

              (xiv)   Except as required by Legal Requirements or
Contracts binding on the Company or its Subsidiaries as of the date
hereof, (1) increase in any manner the amount of compensation or fringe
benefits of, or pay any bonus to or grant severance or termination pay
to, any Employee or director of the Company or any Subsidiary of the
Company, (2) make any increase in or commitment to increase any Company
Benefit Plan (including any severance plan), adopt or amend or make any
commitment to adopt or amend any Company Benefit Plan or make any
contribution, other than regularly scheduled contributions, to any
Company Benefit Plan, (3) waive any stock repurchase rights, accelerate,
amend or change the period of exercisability of Company Options or
Company Restricted Stock, or reprice any Company Options or authorize
cash payments in exchange for any Company Options, (4) enter into any
employment, severance, termination or indemnification agreement with any
Employee or enter into any collective bargaining agreement (other than
offer letters and letter agreements entered into in the ordinary course
of business consistent with past practice with employees who are
terminable "at will"), (5) make any material oral or written
representation or commitment with respect to any material aspect of any
Company Benefit Plan that is not materially in accordance with the
existing written terms and provision of such Company Benefit Plan, (6)
grant any stock appreciation right, phantom stock award, stock-related
award or performance award (whether payable in cash, shares or otherwise)
to any Person (including any Company Employee), or (7) enter into any
agreement with any Company Employee the benefits of which are (in whole
or in part) contingent or the terms of which are materially altered upon
the occurrence of a transaction involving Company of the nature
contemplated hereby; provided, however, that nothing herein shall be
construed as prohibiting the Company from (a) granting Company Options
that are Routine Grants;

              (xv)    Grant any exclusive rights with respect to any
Company Intellectual Property;

              (xvi)   Enter into or renew any Contracts containing, or
otherwise subject the Surviving Corporation or Parent to, any non-
competition, exclusivity or other material restrictions on the Company or
the Surviving Corporation or Parent, or any of their respective
businesses, following the Closing;

              (xvii)  Enter into any agreement or commitment the effect
of which would be to grant to a third party following the Merger any
actual or potential right of license to any material Intellectual
Property owned by Parent or any of its Subsidiaries or access to any
source code owned by the Company;

              (xviii) Hire employees other than in the ordinary course of
business consistent with past practice;

              (xix)   Incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person, issue or sell any debt
securities or options, warrants, calls or other rights to acquire any
debt securities of the Company or any of its Subsidiaries, guarantee any
debt securities of another Person, enter into any "keep well" or other
agreement to maintain any financial statement condition of any other
Person (other than any wholly-owned Subsidiary of it) or enter into any
arrangement having the economic effect of any of the foregoing, other
than in connection with the financing of ordinary course trade payables
consistent with past practice;

              (xx)    Make any individual or series of related payments
outside of the ordinary course of business or make or commit to make
capital expenditures beyond those contained in the Company's capital
expenditure budget in effect on the date hereof, a copy of which is
included in Section 4.1(b)(xxi) of the Company Disclosure Letter ;

              (xxi)   Enter into, modify or amend in a manner adverse in
any material respect to the Company, or terminate any Company Material
Contract currently in effect, or waive, release or assign any material
rights or claims thereunder, in each case, in a manner adverse in any
material respect to the Company, other than any modification, amendment
or termination of any such Company Material Contract in the ordinary
course of business, consistent with past practice;

              (xxii)  Enter into any Contract requiring the Company or
any of its Subsidiaries to pay in excess of an aggregate of $1,500,000
individually, or $5,000,000 in the aggregate;

              (xxiii) Agree in writing or otherwise to take any of the
actions described in (i) through (xxii) above.

                               ARTICLE V
                         ADDITIONAL AGREEMENTS

     5.1  Proxy Statement.

     As promptly as practicable after the execution of this Agreement,
the Company shall prepare, and file with the SEC, the Proxy Statement
relating to the Company Stockholder Approval.  Parent shall provide
promptly to the Company such information concerning Parent as, in the
reasonable judgment of Parent, the Company or their respective counsel,
may be required or appropriate for inclusion in the Proxy Statement, or
in any amendments or supplements thereto.  At the earliest practicable
time following the later of (i) receipt and resolution of SEC comments
thereon, or (ii) the expiration of the 10-day waiting period provided in
Rule 14a-6(a) promulgated under the Exchange Act, the Company shall file
definitive proxy materials with the SEC and cause the Proxy Statement to
be mailed to its stockholders.  The Company will use commercially
reasonable efforts to cause all documents that it is responsible for
filing with the SEC or other regulatory authorities in connection with
the Merger (or as required or appropriate to facilitate the Merger) to
comply in all material respects with all applicable Legal Requirements.
Prior to filing the preliminary proxy materials, definitive proxy
materials or any other filing with the SEC, any other Governmental Entity
or other regulatory authorities, the Company shall provide Parent (which
term shall in all instances in this Section 3.1 also include Parent's
counsel) with reasonable opportunity to review and comment on each such
filing in advance and the Company shall in good faith consider including
in such filings all comments reasonably proposed by Parent.  The Company
will notify Parent promptly of the receipt of any comments from the SEC
or its staff (or of notice of the SEC's intent to review the Proxy
Statement) and of any request by the SEC or its staff or any other
government or regulatory officials for amendments or supplements to the
Proxy Statement or any other filing or for additional/supplemental
information, and will supply Parent with copies of all correspondence
between the Company or any of its representatives, on the one hand, and
the SEC, or its staff or any other government or regulatory officials, on
the other hand, with respect to the Proxy Statement or any such other
filing.  The Company and its outside counsel shall permit Parent to
participate in all communications with the SEC and its staff (including
all meetings and telephone conferences) relating to the Proxy Statement,
this Agreement or the Merger.  The Company shall consult with Parent
prior to responding to any comments or inquiries by the SEC, any other
Governmental Entity or regulatory authority with respect to any filings
related to (or necessary or appropriate to facilitate) the Merger, shall
provide Parent with reasonable opportunity to review and comment on any
such written response in advance and shall in good faith consider
including in such response all comments reasonably proposed by Parent.
Whenever any event occurs that is required to be set forth in an
amendment or supplement to the Proxy Statement or any other filing, the
Company shall promptly inform Parent of such occurrence, provide Parent
with reasonable opportunity to review and comment on any such amendment
or supplement in advance, shall in good faith consider including in such
amendment or supplement all comments reasonably proposed by Parent, and
shall cooperate in filing with the SEC or its staff, any other
Governmental Entity or regulatory authority, and/or mailing to the
stockholders of the Company, such amendment or supplement.

     5.2  Meeting of Company Stockholders; Board Recommendation.

          (a)  Meeting of Company Stockholders.  Promptly after the date
hereof, the Company will take all action necessary in accordance with
Delaware Law and its Certificate of Incorporation and Bylaws to call,
hold and convene a meeting of its stockholders to consider adoption and
approval of this Agreement and approval of the Merger (the "Stockholders'
Meeting").  The Stockholder's Meeting shall be held as promptly as
practicable, and in any event (to the extent permissible under applicable
law) within 45 days after the Proxy Statement is cleared by the SEC (or
if no SEC comments are received on or prior to the expiration of the 10-
day waiting period provided in Rule 14a-6(a) promulgated under the
Exchange Act, within 55 days after such initial filing).  Subject to
Section 5.3(d), the Company will use all reasonable efforts to solicit
from its stockholders proxies in favor of the adoption and approval of
this Agreement and the approval of the Merger, and will take all other
action necessary or advisable to secure the vote or consent of its
stockholders required by the rules of Nasdaq or Delaware Law to obtain
such approvals.  Notwithstanding anything to the contrary contained in
this Agreement, the Company may adjourn or postpone the Stockholders'
Meeting to the extent necessary to ensure that any necessary supplement
or amendment to the Proxy Statement is provided to its stockholders in
advance of a vote on the Merger and this Agreement or if, as of the time
for which the Stockholders' Meeting is originally scheduled (as set forth
in the Proxy Statement), there are insufficient shares of Company Common
Stock represented (either in person or by proxy) to constitute a quorum
necessary to conduct the business of such Stockholders' Meeting or there
are not sufficient votes for the adoption of this Agreement and the
approval of the Merger.  The Company shall ensure that the Stockholders'
Meeting is called, noticed, convened, held and conducted, and that all
proxies solicited by it in connection with the Stockholders' Meeting are
solicited in compliance with Delaware Law, its Certificate of
Incorporation and Bylaws, the rules of Nasdaq and all other applicable
Legal Requirements.

          (b)  Board Recommendation.  Except to the extent expressly
permitted by Section 5.3(d):  (i) the Board of Directors of the Company
shall unanimously recommend that its stockholders vote in favor of
adoption and approval of this Agreement and approval of the Merger at the
Stockholders' Meeting, (ii) the Proxy Statement shall include a statement
to the effect that the Board of Directors of the Company has unanimously
recommended that the Company's stockholders vote in favor of adoption and
approval of this Agreement and approval of the Merger at the
Stockholders' Meeting, and (iii) neither the Board of Directors of the
Company nor any committee thereof shall withdraw, amend or modify, or
propose or resolve to withdraw, amend or modify, in a manner adverse to
Parent and Merger Sub, the unanimous recommendation of its Board of
Directors that the Company's stockholders vote in favor of adoption and
approval of this Agreement and the Merger.  Without limitation, the
recommendation of the Board of Directors of the Company shall be deemed
to have been modified in a manner adverse to Parent if the recommendation
shall no longer be unanimous.

     5.3  Acquisition Proposals.

          (a)  No Solicitation.  Except to the extent expressly permitted
by Section 5.3(c), the Company agrees that neither it nor any of its
Subsidiaries, nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall not permit its and its
Subsidiaries' Employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) to, directly or indirectly:  (i) solicit, initiate,
encourage, knowingly facilitate or induce any inquiry with respect to, or
the making, submission or announcement of, any Acquisition Proposal, (ii)
participate in any discussions or negotiations regarding, or furnish to
any Person any nonpublic information with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to, any Acquisition
Proposal, (iii) engage in discussions with any Person with respect to any
Acquisition Proposal, except as to the existence of these provisions,
(iv) approve, endorse or recommend any Acquisition Proposal (except to
the extent specifically permitted pursuant to Section 5.3(d)), (v)
release any third Person from any confidentiality or standstill agreement
to which the Company is a party (or its investment banker on behalf of
the Company), or fail to enforce or grant any material waiver, consent or
request to, any Acquisition Proposal, under such agreement, or (vi) enter
into any letter of intent or similar document or any contract agreement
or commitment contemplating or otherwise relating to any Acquisition
Proposal or transaction contemplated thereby.  The Company and its
Subsidiaries will immediately cease any and all existing activities,
discussions or negotiations with any third parties conducted heretofore
with respect to any Acquisition Proposal.  The Company acknowledges that
any violation of the restrictions set forth in this Section 5.3(a)by any
officer, director, employee, representative, investment banker, attorney,
accountant or agent of the Company or any of its Subsidiaries shall be
deemed to be a breach of this Section 5.3(a) by the Company.

           (b)  Notification of Unsolicited Acquisition Proposals.

              (i)     As time is of the essence, as promptly as
practicable (and in any event no later than 24 hours) after receipt of
any Acquisition Proposal or any request for nonpublic information or
inquiry which it reasonably believes would lead to an Acquisition
Proposal, the Company shall provide Parent with oral and written notice
of the material terms and conditions of such Acquisition Proposal,
request or inquiry, and the identity of the Person or group making any
such Acquisition Proposal, request or inquiry and a copy of all written
materials provided in connection with such Acquisition Proposal, request
or inquiry.
              (ii)    As time is of the essence, the Company shall
provide Parent with two (2) business days prior written notice (or such
lesser prior notice as is provided to the members of its Board of
Directors) of any meeting of the its Board of Directors at which its
Board of Directors is reasonably expected to consider any Acquisition
Proposal.

          (c)  Superior Offers.  Notwithstanding anything to the contrary
contained in Section 5.3(a), in the event that the Company receives an
unsolicited, bona fide written Acquisition Proposal from a third party
that its Board of Directors has in good faith concluded (following
consultation with its outside legal counsel and its financial advisor),
is, or is reasonably likely to result in, a Superior Offer, the Company
may then take the following actions (but only if and to the extent that
the Board of Directors of the Company concludes in good faith, following
the receipt of advice of the Company's outside legal counsel, that the
failure to do so is reasonably likely to result in a breach of its
fiduciary obligations under applicable Legal Requirements):

              (i)     Furnish nonpublic information to the third party
making such Acquisition Proposal, provided that (A) (1) prior to
furnishing any such nonpublic information to such party, the Company
gives Parent no less than 24 hours written notice of its intention to
furnish such nonpublic information and (2) the Company receives from the
third party an executed confidentiality agreement containing customary
limitations on the use and disclosure of all nonpublic written and oral
information furnished to such third party on the Company's behalf, the
terms of which are at least as restrictive as the terms contained in the
Confidentiality Agreement and (B) contemporaneously with furnishing any
such nonpublic information to such third party, the Company furnishes
such nonpublic information to Parent (to the extent such nonpublic
information has not been previously so furnished); and

              (ii)    Engage in negotiations with the third party with
respect to the Acquisition Proposal, provided that no less than 24 hours
prior to entering into negotiations with such third party, the Company
gives Parent written notice of the Company's intention to enter into
negotiations with such third party.

          (d)  Change of Recommendation.  In response to the receipt of a
Superior Offer, the Board of Directors of the Company may withhold,
withdraw, amend or modify its unanimous recommendation in favor of the
Merger and enter into a written agreement memorializing such Superior
Proposal, and, in the case of a Superior Offer that is a tender or
exchange offer made directly to the stockholders of the Company, may
recommend that the stockholders of the Company accept the tender or
exchange offer (any of the foregoing actions, whether by the Board of
Directors of the Company or a committee thereof, a "Change of
Recommendation"), only if all of the following conditions in clauses (i)
through (viii) are met:

              (i)     A Superior Offer with respect to it has been made
and has not been withdrawn;

              (ii)    The Stockholders' Meeting has not occurred;

              (iii)   The Company shall have (A) provided to Parent
written notice which shall state expressly (1) that the Company has
received a Superior Offer, (2) the material terms and conditions of the
Superior Offer and the identity of the Person or group making the
Superior Offer, and (3) that the Company intends to effect a Change of
Recommendation and the manner in which it intends to do so, (B) provided
to Parent a copy of all written materials delivered to the Person or
group making the Superior Offer in connection with such Superior Offer,
and (C) made available to Parent all other materials and information made
available to the Person or group making the Superior Offer in connection
with such Superior Offer;

              (iv)    The Board of Directors of the Company has concluded
in good faith, after receipt of advice of its outside legal counsel,
that, in light of such Superior Offer, the failure of the Board of
Directors to effect a Change of Recommendation is reasonably likely to
result in a breach of its fiduciary obligations to the stockholders of
the Company under applicable law;

              (v)     The Company shall not have breached any of the
provisions set forth in Section 5.2 or this Section 5.3;

              (vi)    At least two (2) business days shall have elapsed
from the provision by the Company to Parent of the information specified
in Section 5.3(d)(iii);

              (vii)   During the two (2) business day period specified in
Section 5.3(d)(vi), the Company negotiates with Parent in good faith with
respect to adjustments to the terms and conditions of this Agreement that
Parent may suggest during such period; and

              (viii)  During or following the two (2) business day period
specified in Section 5.3(d)(vi), the Board of Directors of the Company
does not conclude in good faith (after consultation with its outside
legal counsel and its financial advisor) that such Acquisition Proposal
no longer constitutes a Superior Offer.

          (e)  Continuing Obligation to Call, Hold and Convene
Stockholders' Meeting; No Other Vote.  Notwithstanding anything to the
contrary contained in this Agreement, unless this Agreement is earlier
terminated pursuant to Section 7.1, the obligation of the Company to
call, give notice of, convene and hold the Stockholders' Meeting shall
not be limited or otherwise affected by the commencement, disclosure,
announcement or submission to it of any Acquisition Proposal, or by any
Change of Recommendation and, the Company shall not submit to the vote of
its stockholders any Acquisition Proposal, or propose to do so.

          (f)  Compliance with Tender Offer Rules.  Nothing contained in
this Agreement shall prohibit the Company or its Board of Directors from
taking and disclosing to the stockholders of the Company a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act; provided that the content of any such disclosure thereunder shall be
governed by the terms of this Agreement.  Without limiting the foregoing
proviso, the Company shall not effect a Change of Recommendation unless
specifically permitted pursuant to the terms of Section 5.3(d).

          (g)  Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:

              (i)     "Acquisition Proposal," with respect to the
Company, shall mean any offer or proposal, relating to any transaction or
series of related transactions involving:  (A) any purchase from such
party or acquisition by any Person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) of
more than a ten percent (10%) interest in the total outstanding voting
securities of the Company or any of its Subsidiaries or any tender offer
or exchange offer that if consummated would result in any Person or group
beneficially owning ten percent (10%) or more of the total outstanding
voting securities of the Company or any of its Subsidiaries or any
merger, consolidation, business combination or similar transaction
involving the Company or any of its Subsidiaries, (B) any sale, lease
(other than in the ordinary course of business), exchange, transfer,
license (other than in the ordinary course of business), acquisition or
disposition of more than ten percent (10%) of the assets of the Company
(including its Subsidiaries taken as a whole), or (C) any liquidation or
dissolution of the Company (provided, however, the transactions
contemplated hereby by Parent and Merger Sub shall not be deemed an
Acquisition Proposal); and

              (ii)    "Superior Offer," with respect to the Company,
shall mean an unsolicited, bona fide written offer made by a third party
to acquire, directly or indirectly, pursuant to a tender offer, exchange
offer, merger, consolidation or other business combination, all or
substantially all of the assets of the Company or a majority of the total
outstanding voting securities of the Company as a result of which the
stockholders of the Company immediately preceding such transaction would
hold less than fifty percent (50%) of the equity interests in the
surviving or resulting entity of such transaction or any direct or
indirect parent or subsidiary thereof, on terms that the Board of
Directors of the Company has in good faith concluded (following
consultation with its outside legal counsel and its financial adviser),
taking into account, among other things, all legal, financial, regulatory
and other aspects of the offer and the Person making the offer (including
committed borrowing capacity to the extent necessary to finance such
Acquisition Proposal), to be more favorable, from a financial point of
view, to the Company's stockholders (in their capacities as stockholders)
than the terms of the Merger (taking into account all of the terms of any
proposal by Parent to amend or modify the terms of this Agreement and the
Merger) and is reasonably capable of being consummated without
unreasonable delay.

     5.4  Confidentiality; Access to Information; No Modification of
Representations, Warranties or Covenants.

          (a)  Confidentiality. The parties acknowledge that the Company
and Parent have previously executed a Confidential Disclosure Agreement
dated March 25 2005 (the "Confidentiality Agreement"), which
Confidentiality Agreement will continue in full force and effect in
accordance with its terms and each of Parent and the Company will hold,
and will cause its respective directors, officers, Employees, agents and
advisors (including attorneys, accountants, consultants, bankers and
financial advisors) to hold, any Confidential Information (as defined in
the Confidentiality Agreement) confidential in accordance with the terms
of the Confidentiality Agreement.

          (b)  Access to Information.  The Company shall afford Parent
(and its advisors) reasonable access during normal business hours to the
Company properties, books, records and personnel during the period prior
to the Effective Time to obtain all information concerning its business,
including the status of product development efforts, properties, results
of operations and personnel, as Parent may reasonably request (including
for the purpose of performing such environmental tests and investigations
as Parent may desire); provided, however, that the Company may restrict
the foregoing access to the extent that any law, treaty, rule or
regulation of any Governmental Entity applicable to such party requires
such party or its Subsidiaries to restrict or prohibit access to any such
properties or information.

          (c)  No Modification of Representations and Warranties or
Covenants.  No information or knowledge obtained in any investigation or
notification pursuant to this Section 5.4, Section 5.6 or Section 5.7
shall affect or be deemed to modify any representation or warranty
contained herein, the covenants or agreements of the parties hereto or
the conditions to the obligations of the parties hereto under this
Agreement.

     5.5  Public Disclosure.  Without limiting any other provision of
this Agreement, Parent and the Company will consult with each other
before issuing, and provide each other the opportunity to review, comment
upon and concur with, and use all reasonable efforts to agree on, any
press release or public statement with respect to this Agreement and the
transactions contemplated hereby, including the Merger, and any
Acquisition Proposal and will not issue any such press release or make
any such public statement prior to such consultation and (to the extent
practicable) agreement, except as may be required by law or any listing
agreement with the Nasdaq or any other applicable national or regional
securities exchange or market.  The parties have agreed to the text of
the joint press release announcing the signing of this Agreement.

     5.6  Regulatory Filings; Commercially Reasonable Efforts.

          (a)  Regulatory Filings.  Each of Parent, Merger Sub and the
Company shall coordinate and cooperate with one another and shall each
use all reasonable efforts to comply with, and shall each refrain from
taking any action that would impede compliance with, all Legal
Requirements, and as promptly as practicable after the date hereof, each
of Parent, Merger Sub and the Company shall make all filings, notices,
petitions, statements, registrations, submissions of information,
application or submission of other documents required by any Governmental
Entity in connection with the Merger and the transactions contemplated
hereby, including:  (i) each party using its respective best efforts to
file Notification and Report Forms with the United States Federal Trade
Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice ("DOJ") as required by the HSR Act no later than
two (2) business days following the date hereof, (ii) any other filing
necessary to obtain any Necessary Consent, (iii) filings under any other
comparable pre-merger notification forms reasonably determined by Parent
to be required by the merger notification or control laws of any
applicable jurisdiction, as agreed by the parties hereto, and (iv) any
filings required under the Securities Act, the Exchange Act, any
applicable state securities or "blue sky" laws and the securities laws of
any foreign country, or any other Legal Requirement relating to the
Merger.  Each of Parent and the Company will cause all documents that it
is responsible for filing with any Governmental Entity under this Section
5.6(a) to comply in all material respects with all applicable Legal
Requirements.

          (b)  Exchange of Information.  Parent, Merger Sub and the
Company each shall promptly supply the other with any information which
may be required in order to effectuate any filings or application
pursuant to Section 5.6(a).  Except where prohibited by applicable Legal
Requirements, and subject to the Confidentiality Agreement and any joint
defense agreement entered into between the parties or their counsel, each
of the Company and Parent shall consult with the other prior to taking a
position with respect to any such filing, shall permit the other to
review and discuss in advance, and consider in good faith the views of
the other in connection with any analyses, appearances, presentations,
memoranda, briefs, white papers, arguments, opinions and proposals before
making or submitting any of the foregoing to any Governmental Entity by
or on behalf of any party hereto in connection with any investigations or
proceedings in connection with this Agreement or the transactions
contemplated hereby (including under any antitrust or fair trade Legal
Requirement), coordinate with the other in preparing and exchanging such
information and promptly provide the other (and its counsel) with copies
of all filings, presentations or submissions (and a summary of any oral
presentations) made by such party with any Governmental Entity in
connection with this Agreement or the transactions contemplated hereby,
provided that with respect to any such filing, presentation or
submission, each of Parent and the Company need not supply the other (or
its counsel) with copies (or in case of oral presentations, a summary) to
the extent that any law, treaty, rule or regulation of any Governmental
Entity applicable to such party requires such party or its Subsidiaries
to restrict or prohibit access to any such properties or information.  It
is acknowledged and agreed by the parties hereto that Parent shall have,
except where prohibited by applicable Legal Requirements, primary
responsibility for determining the strategy for dealing with  the FTC,
DOJ, EC or any other Governmental Authority with responsibility for
reviewing the Merger with respect to antitrust or competition issues.

          (c)  Notification.  Each of Parent, Merger Sub and the Company
will notify the other promptly upon the receipt of:  (i) any comments
from any officials of any Governmental Entity in connection with any
filings made pursuant hereto and (ii) any request by any officials of any
Governmental Entity for amendments or supplements to any filings made
pursuant to, or information provided to comply in all material respects
with, any Legal Requirements.  Whenever any event occurs that is required
to be set forth in an amendment or supplement to any filing made pursuant
to Section 5.6(a), Parent, Merger Sub or the Company, as the case may be,
will promptly inform the other of such occurrence and cooperate in filing
with the applicable Governmental Entity such amendment or supplement.

          (d)  Commercially Reasonable Efforts.  Subject to the express
provisions of Section 5.2 and Section 5.3 hereof and upon the terms and
subject to the conditions set forth herein, each of the parties agrees to
use commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including using commercially reasonable efforts to accomplish
the following:  (i) the taking of commercially reasonable acts necessary
to cause the conditions precedent set forth in Article IV to be
satisfied, (ii) the obtaining of all necessary actions or nonactions,
waivers, consents, approvals, orders and authorizations from Governmental
Entities and the making of all necessary registrations, declarations and
filings (including registrations, declarations and filings with
Governmental Entities, if any) and the taking of all reasonable steps as
may be necessary to avoid any suit, claim, action, investigation or
proceeding by any Governmental Entity, (iii) the obtaining of all
necessary consents, approvals or waivers from third parties, including
all Necessary Consents, (iv) the defending of any suits, claims, actions,
investigations or proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions
contemplated hereby and (v) the execution or delivery of any additional
instruments necessary to consummate the transactions contemplated by, and
to fully carry out the purposes of, this Agreement.  In connection with
and without limiting the foregoing, the Company and its Board of
Directors shall, if any takeover statute or similar Legal Requirement is
or becomes applicable to the Merger, this Agreement or any of the
transactions contemplated by this Agreement, use all reasonable efforts
to ensure that the Merger and the other transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of
such Legal Requirement on the Merger, this Agreement and the transactions
contemplated hereby.

          (e)  Limitation on Divestiture.   Notwithstanding anything in
this Agreement to the contrary, nothing contained in this Agreement shall
be deemed to require Parent or the Company or any Subsidiary or affiliate
thereof to agree to any Action of Divestiture.   The Company shall not
take or agree to take any Action of Divestiture without the prior written
consent of Parent.  For purposes of this agreement, an "Action of
Divestiture" shall mean any divestiture by Parent or the Company or any
of their Subsidiaries or affiliates of shares of capital stock or of any
business, assets or property, or the imposition of any material
limitation on the ability of any of them to conduct their businesses or
to own or exercise control of such assets, properties and stock.

     5.7  Notification of Certain Matters.

          (a)  By the Company.  The Company shall give prompt notice to
Parent and Merger Sub of any representation or warranty made by it
contained in this Agreement becoming untrue or inaccurate, or any failure
of the Company to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it
under this Agreement, in each case, such that the conditions set forth in
Section 6.3(a) or 6.3(b) would not be satisfied.

          (b)  By Parent.  Parent and Merger Sub shall give prompt notice
to the Company of any representation or warranty made by it contained in
this Agreement becoming untrue or inaccurate, or any failure of Parent to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement, in
each case, such that the conditions set forth in Section 6.2(a) or 6.2(b)
would not be satisfied.

     5.8  Third-Party Consents.  As soon as practicable following the
date hereof, Parent and the Company will each use all reasonable efforts
to obtain any material consents, waivers and approvals under any of its
or its Subsidiaries' respective Contracts required to be obtained in
connection with the consummation of the transactions contemplated hereby.

     5.9  Termination of 401(k) Plans.  Effective no later than the day
immediately preceding the Closing Date, the Company and its Affiliates,
as applicable, shall each terminate any and all group severance,
separation or salary continuation plans, programs or arrangements and any
and all plans intended to include a Code Section 401(k) arrangement
(unless Parent provides written notice to the Company that such 401(k)
plans shall not be terminated) (collectively, "Company Plans").  Unless
Parent provides such written notice to the Company, no later than five
business days prior to the Closing Date, the Company shall provide Parent
with evidence that such Company Plan(s) have been terminated (effective
as of the day immediately preceding the Closing Date) pursuant to
resolutions of the Company's Board of Directors.  The form and substance
of such resolutions shall be subject to prior review and approval of
Parent.  The Company also shall take such other actions in furtherance of
terminating such Company Plan(s) as Parent may reasonably require.  In
the event that the distribution or rollover of assets from the trust of a
Company Plan that is terminated is reasonably anticipated to trigger
liquidation charges, surrender charges, or other fees to be imposed upon
the account of any participant or beneficiary of such terminated plan or
upon the Company or plan sponsor, then the Company shall take such all
such actions as are necessary to reasonably estimate the amount of such
charges and/or fees and provide such estimate in writing to Parent prior
to the Closing Date.

     5.10 Indemnification.

          (a)  Indemnity.  From and after the Effective Time, Parent will
cause the Surviving Corporation to, fulfill and honor in all respects the
obligations of the Company pursuant to any indemnification agreements
between the Company and its directors and officers immediately prior to
the Effective Time and identified on Schedule 5.10 (the "Indemnified
Parties"), subject to applicable law.  The Certificate of Incorporation
and Bylaws of the Surviving Corporation will contain provisions with
respect to exculpation, indemnification and advancement of expenses that
are at least as favorable to the Indemnified Parties as those contained
in the Certificate of Incorporation and Bylaws of the Company as in
effect on the date hereof, which provisions will not be amended, repealed
or otherwise modified for a period of six (6) years from the Effective
Time in any manner that would adversely affect the rights thereunder of
Indemnified Parties, unless such modification is required by law.

          (b)  Insurance.  For a period of six (6) years after the
Effective Time, Parent will cause the Surviving Corporation to use all
reasonable efforts to cause to be maintained directors' and officers'
liability insurance maintained by the Company covering those persons who
are covered by the Company's directors' and officers' liability insurance
policy as of the date hereof for events occurring prior to the Effective
Time on terms comparable to those applicable to the current directors and
officers of the Company; provided, however, that in no event will the
Surviving Corporation be required to expend in excess of 200% of the
annual premium currently paid by the Company for such coverage and which
is set forth on Schedule 5.10 of the Company Disclosure Letter (and to
the extent annual premium would exceed 200% of the annual premium
currently paid by the Company for such coverage, the Surviving
Corporation or Parent shall use all reasonable efforts to cause to be
maintained the maximum amount of coverage as is available for such amount
that is 200% of such annual premium).

          (c)  Third-Party Beneficiaries.  This Section 5.10 is intended
to be for the benefit of, and shall be enforceable by the Indemnified
Parties and their heirs and personal representatives and shall be binding
on Parent and the Surviving Corporation and its successors and assigns.
In the event Parent or the Surviving Corporation or its successor or
assign (i) consolidates with or merges into any other Person and shall
not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each case, proper
provision shall be made so that the successor and assign of Parent or the
Surviving Corporation, as the case may be, honor the obligations set
forth with respect to Parent or the Surviving Corporation, as the case
may be, in this Section 5.10.

     5.11 Merger Sub Compliance.  Parent shall cause Merger Sub to comply
with all of Merger Sub's obligations under or relating to this Agreement.
 Merger Sub shall not engage in any business which is not in connection
with the Merger with and into the Company pursuant to this Agreement.

     5.12 [Reserved]

     5.13 Section 83(b) Elections.  The Company shall use commercially
reasonable efforts to deliver to Parent at or before the Closing, a true,
correct and complete copy of each election statement made under Section
83(b) of the Code, filed by each person who acquired Company Restricted
Stock, together with evidence of the timely filing of such election with
the appropriate Internal Revenue Service Center.

     5.14 Spreadsheet.  The Company shall prepare and deliver to Parent
at or prior to the Closing a spreadsheet in a form acceptable to Parent,
which spreadsheet shall be dated as of the Closing Date, and which
spreadsheet (the "Spreadsheet") shall set forth as of immediately prior
to the Effective Time:  (a) the names and holders of all Company Options
and Company Restricted Stock; (b) the number of shares of Company Common
Stock underlying such Company Options, and the number of shares of
Company Restricted Stock, held by such Persons; (c) the exercise price
per share in effect as of immediately prior to the Effective Time for
each such Company Option; (d) the vesting status and schedule for such
Company Options and Company Restricted Stock held by each holder; and (e)
the tax status of each Company Option held by such holder under Section
422 of the Code.  A draft of the Spreadsheet shall be provided to Parent
by the Company no later than two (2) business days prior to the Closing.

     5.15 Takeover Laws.  The Company shall, upon the request of Parent,
take all reasonable steps to exclude the applicability of, or to assist
in any challenge by Parent or Merger Sub to the validity or applicability
to the Merger or any other transaction contemplated by this Agreement of,
any "moratorium", "control share acquisition", "business combination",
"fair price" or other form of anti-takeover Legal Requirements of any
jurisdiction that may purport to be applicable to this Agreement.

     5.16  Cooperation with Financing.  The Company acknowledges that to
fund partially or in whole the Merger Consideration, Parent intends to
raise capital pursuant to a bank borrowing under a secured or unsecured
loan, the issuance of debt, equity or hybrid securities in a private
placement or public offering or some combination thereof (any of the
foregoing, a "Financing").  The Company agrees to provide Parent with
such cooperation as may be reasonably requested by Parent in connection
with the arrangement and obtaining of any Financing, including (a)
participation in meetings, drafting sessions, due diligence sessions,
management presentation sessions, "road shows" and sessions with rating
agencies, (b) preparation of business projections, financial statements
(including pro forma financial statements), offering memoranda, private
placement memoranda, prospectuses, marketing materials and similar
documents, (c) providing access to the Company's senior officers and
representatives and the books and records, contracts and properties of
the Company and its Subsidiaries, (d) the execution and delivery of any
pledge and security documents, other financing documents, including any
indemnity agreements, and (e) furnishing, or causing to be furnished,
such other requested certificates or documents, comfort letters
(including "negative assurance" comfort) of accountants, consents of
accountants for use of their reports (which shall be unqualified) in any
materials relating to the financing to be used in connection with the
transactions contemplated by this Agreement, legal opinions, surveys and
title insurance.  The Company will use all commercially reasonable
efforts to assist Parent with the full satisfaction, on a timely basis,
of the terms, conditions, representations and warranties set forth in any
commitment letter, credit agreement, purchase agreement, underwriting
agreement, placement agent agreement or other definitive agreement for
any such Financing.  Notwithstanding anything herein to the contrary,
neither the Company, any of its Subsidiaries nor any of their respective
officers or directors shall be required to file any registration
statement with the SEC or pay any commitment or other similar fee or
incur any other liability in connection with the Financings contemplated
hereby prior to the Effective Time, including, without limitation, any
pledge or security documents or other definitive Financing documents.
The terms of this Section 5.16 relate only to the Company's obligation to
cooperate with Parent in connection with the arrangement of the
Financing, and shall not be deemed to create any additional condition on
the obligations of Parent and Merger Sub to consummate and effect the
Merger; provided, however, that any noncompliance or breach of this
Section 5.16 is subject to the provisions of Section 6.3.

     5.17 Company Options.  The Company agrees that immediately prior to
and contingent upon the effectiveness of the Merger, all Company Options
with an exercise price less than $30.00 per share shall be purchased by
the Company for a cash payment equal to the amount by which $30.00 per
share exceeds the exercise price per share for each share of Company
Common Stock subject to such Company Options, multiplied by the number of
shares issuable upon exercise in full of such Company Options, such that
there shall be no outstanding Company Options as of the effectiveness of
the Merger.  The Company shall make all appropriate withholding as may be
required in accordance with applicable laws and regulations for such
purchase.

     5.18 Company Fairness Opinion.  As soon as practicable following the
date hereof, the Company shall deliver to Parent and its legal counsel a
copy of the Company Fairness Opinion.

     5.19 Payments.  No later than two (2) Business Days following the
Closing, the Parent shall deposit in escrow the aggregate amount of cash
set forth in Section 5.19 to the Company Disclosure Letter. This cash
shall be used to fund the payment terms set forth in the executed Payment
Agreements. the Company shall use all commercially reasonable efforts to
cause the individuals set forth on Schedule 5.19 to the Company
Disclosure Letter hereto to deliver Parent an executed Payment Agreement
at the Closing.

                               ARTICLE VI
                        CONDITIONS TO THE MERGER

     6.1  Conditions to the Obligations of Each Party to Effect the
Merger.  The respective obligations of each party to this Agreement to
consummate and effect the Merger shall be subject to the satisfaction at
or prior to the Closing Date of the following conditions:

          (a)  Company Stockholder Approval.  This Agreement shall have
been approved and adopted, and the Merger shall have been duly approved,
by the requisite vote under applicable law, by the stockholders of the
Company.

          (b)  No Order.  No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent) which (i) is in
effect and (ii) has the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger.

          (c)  HSR Act. All waiting periods (and any extension thereof)
under the HSR Act relating to the transactions contemplated hereby will
have expired or terminated early.  All other material foreign antitrust
approvals reasonably determined by Parent to be required to be obtained
prior to the Merger in connection with the transactions contemplated
hereby shall have been obtained.

     6.2  Additional Conditions to the Obligations of the Company.  The
obligation of the Company to consummate and effect the Merger shall be
subject to the satisfaction at or prior to the Closing Date of each of
the following conditions, any of which may be waived, in writing,
exclusively by the Company:

          (a)  Representations and Warranties.  The representations and
warranties of Parent and Merger Sub contained in this Agreement shall be
true and correct on the date hereof and as of the Closing Date with the
same force and effect as if made on the Closing Date (except that those
representations and warranties which address matters only as of a
particular date shall have been true and correct only on such date),
except, in each case, or in the aggregate, as does not constitute a
Material Adverse Effect on Parent at the Closing Date (it being
understood that, for purposes of determining the accuracy of such
representations and warranties, any update of or modification to the
Parent Disclosure Letter made or purported to have been made after the
execution of this Agreement and any materiality and Material Adverse
Effect qualifications with respect to such representations and warranties
shall be disregarded).  The Company shall have received a certificate
with respect to the foregoing signed on behalf of Parent by an executive
officer of Parent.

          (b)  Agreements and Covenants.  Parent and Merger Sub shall
have performed or complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied with
by it on or prior to the Closing Date, and the Company shall have
received a certificate with respect to the foregoing signed on behalf of
Parent, with respect to the covenants of Parent, by an authorized
executive officer of Parent and a certificate with respect to the
foregoing signed on behalf of Merger Sub, with respect to the covenants
of Merger Sub, by an authorized executive officer of Merger Sub.

          (c)  Material Adverse Effect.  No Material Adverse Effect on
Parent shall have occurred since the date hereof and be continuing.

     6.3  Additional Conditions to the Obligations of Parent.  The
obligations of Parent and Merger Sub to consummate and effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, any of which may be waived, in writing,
exclusively by Parent and Merger Sub:

          (a)  Representations and Warranties.  The representations and
warranties of the Company contained in this Agreement shall be true and
correct on the date hereof and as of the Closing Date with the same force
and effect as if made on the Closing Date (except that those
representations and warranties which address matters only as of a
particular date shall have been true and correct only on such date),
except, in each case or in the aggregate (other than the representations
and warranties of the Company contained in Section 2.2 and 2.17 which
shall be true and correct in all material respects), as does not
constitute a Material Adverse Effect on the Company at the Closing Date
(it being understood that, for purposes of determining the accuracy of
such representations and warranties, any update of or modification to the
Company Disclosure Letter made or purported to have been made after the
execution of this Agreement and any materiality and Material Adverse
Effect qualifications with respect to such representations and warranties
shall be disregarded).  Parent and Merger Sub shall have received a
certificate with respect to the foregoing signed on behalf of the Company
by an executive officer of the Company.

          (b)  Agreements and Covenants.  The Company shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
it at or prior to the Closing Date, and Parent and Merger Sub shall have
received a certificate to such effect signed on behalf of the Company by
an executive officer of the Company.

          (c)  Material Adverse Effect.  No Material Adverse Effect on
the Company shall have occurred since the date hereof and be continuing.

          (d)  No Governmental Restriction.  There shall not be any
pending or threatened suit, action or proceeding asserted by any
Governmental Entity (i) challenging or seeking to restrain or prohibit
the consummation of the Merger or any of the other transactions
contemplated by this Agreement, the effect of which restraint or
prohibition if obtained would cause the condition set forth in Section
6.1(b) to not be satisfied or (ii) seeking to require Parent or the
Company or any Subsidiary or affiliate to effect an Action of
Divestiture.

          (e)  Payment Agreement.  Each of the individuals set forth on
Section 5.19 of the Company Disclosure Letter shall have delivered to
Parent an executed and binding agreement in the form attached hereto as
Exhibit A (the "Payment Agreement").

                              ARTICLE VII
                   TERMINATION, AMENDMENT AND WAIVER

     7.1  Termination.  This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board
of Directors of the terminating party or parties, and except as provided
below, whether before or after the requisite approvals of the
stockholders of the Company:

          (a)  by mutual written consent of Parent and the Company;

          (b)  by either the Company or Parent if:

              (i)     the Merger shall not have been consummated by July
31, 2006 (which date shall be extended to October 31, 2006, if the Merger
shall not have been consummated as of the result of a failure to satisfy
the conditions set forth in Section 6.1(b), Section 6.1(c) or Section
6.3(d)) (as appropriate, the "End Date"); provided, however, that the
right to terminate this Agreement under this Section 7.1(b)(i) shall not
be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the Merger to occur on
or before such date and such action or failure to act constitutes a
breach of this Agreement;

              (ii)    if a Governmental Entity shall have issued an
order, decree or ruling or taken any other action (including the failure
to have taken an action), in any case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger, which order,
decree, ruling or other action is final and nonappealable; or

              (iii)   if the required approval of the stockholders of the
Company contemplated by this Agreement shall not have been obtained by
reason of the failure to obtain the required vote at a meeting of the
Company stockholders duly convened therefor or at any adjournment
thereof; provided, however, that the right to terminate this Agreement
under this Section 7.1(b)(iii) shall not be available to the Company
where the failure to obtain Company stockholder approval shall have been
caused by the action or failure to act of the Company and such action or
failure to act constitutes a breach by the Company of this Agreement;

         (c)  by Parent:

              (i)     if a Triggering Event with respect to the Company
shall have occurred;

              (ii)    upon a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company shall have
become untrue, in either case such that the conditions set forth in
Section 6.3(a) or Section 6.3(b) would not be satisfied as of the time of
such breach or as of the time such representation or warranty shall have
become untrue, provided, that if such inaccuracy in the Company's
representations and warranties or breach by the Company is curable by the
Company prior to the End Date through the exercise of reasonable efforts,
then Parent may not terminate this Agreement under this Section
7.1(c)(ii) prior to the date that is 30 days following the receipt of
written notice from Parent to the Company of such breach, provided that
the Company continues to exercise all reasonable efforts to cure such
breach through such 30-day period (it being understood that Parent may
not terminate this Agreement pursuant to this Section 7.1(c)(ii) if it
shall have materially breached this Agreement or if such breach by the
Company is cured within such 30-day period);

              (iii)   if a Material Adverse Effect on the Company shall
have occurred since the date hereof; or

              (iv)    if a material breach of Section 5.3 of this
Agreement shall have occurred.

          (d)  by the Company:

              (i)     upon a breach of any representation, warranty,
covenant or agreement on the part of Parent set forth in this Agreement,
or if any representation or warranty of Parent shall have become untrue,
in either case such that the conditions set forth in Section 6.2(a) or
Section 6.2(b) would not be satisfied as of the time of such breach or as
of the time such representation or warranty shall have become untrue,
provided that if such inaccuracy in Parent's representations and
warranties or breach by Parent is curable by Parent prior to the End Date
through the exercise of reasonable efforts, then the Company may not
terminate this Agreement under this Section 7.1(d)(i) prior to 20 days
following the receipt of written notice from the Company to Parent of
such breach, provided that Parent continues to exercise all reasonable
efforts to cure such breach through such 20-day period (it being
understood that the Company may not terminate this Agreement pursuant to
this 7.1(d)(i) if it shall have materially breached this Agreement or if
such breach by Parent is cured within such 20-day period); or

              (ii)    if, prior to the adoption of this Agreement or the
approval of the Merger by the stockholders of the Company, in connection
with an Acquisition Proposal it wishes to accept, (A) the Company has
complied with Section 5.3 with respect to such Acquisition Proposal, (B)
the Board of Directors of the Company has determined, and has not changed
its determination prior to the two (2) business day period provided for
in Section 5.3(d)(vi), that such Acquisition Proposal constitutes a
Superior Offer, and (C) the Company pays the Termination Fee prior to or
simultaneously with such termination; or
              (iii)   if a Material Adverse Effect on Parent shall have
occurred since the date hereof.

     For the purposes of this Agreement, a "Triggering Event," with
respect to the Company, shall be deemed to have occurred if:  (i) its
Board of Directors or any committee thereof shall for any reason have
withdrawn or shall have amended or modified in a manner adverse to Parent
its unanimous recommendation in favor of, the adoption and approval of
the Agreement or the approval of the Merger, (ii) it shall have failed to
include in the Proxy Statement the unanimous recommendation of its Board
of Directors in favor of the adoption and approval of the Agreement and
the approval of the Merger, (iii) its Board of Directors fails to
reaffirm (publicly, if so requested) its recommendation in favor of the
adoption and approval of the Agreement and the approval of the Merger
within five (5) calendar days after Parent requests in writing that such
recommendation be reaffirmed, (iv) its Board of Directors or any
committee thereof shall have approved or recommended any Acquisition
Proposal, (v) the Company shall have entered into any letter of intent or
similar document or any agreement, contract or commitment accepting any
Acquisition Proposal, or (vi) a tender or exchange offer relating to its
securities shall have been commenced by a Person unaffiliated with Parent
and the Company shall not have sent to its security holders pursuant to
Rule 14e-2 promulgated under the Securities Act, within ten (10) business
days after such tender or exchange offer is first published, sent or
given, a statement disclosing that the Board of Directors of the Company
recommends rejection of such tender or exchange offer.

     7.2  Notice of Termination; Effect of Termination.  Any termination
of this Agreement under Section 7.1 above will be effective immediately
upon the delivery of a valid written notice of the terminating party to
the other party hereto.  In the event of the termination of this
Agreement as provided in Section 7.1, this Agreement shall be of no
further force or effect, except (i) as set forth in Section 5.4(a), this
Section 7.2, Section 7.3 and Article VIII, each of which shall survive
the termination of this Agreement and (ii) nothing herein shall relieve
any party from liability for any willful breach of this Agreement.  No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, all of which obligations
shall survive termination of this Agreement in accordance with their
terms.

     7.3  Fees and Expenses.

          (a)  General.  Except as set forth in this Section 7.3, all
fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring
such expenses whether or not the Merger is consummated; provided,
however, that:

              (i)     The Company shall pay all fees and expenses
incurred in relation to the printing and filing (with the SEC) of the
Proxy Statement (including any preliminary materials related thereto).

              (ii)    Parent shall pay the filing fee for the initial
Notification and Report Forms filed with the FTC and DOJ under the HSR
Act and premerger notification and reports forms under similar applicable
laws of other jurisdictions, in each case pursuant to Section 5.6(a).

              (iii)   The Company shall pay to Parent all reasonable and
documented out-of-pocket expenses (excluding any wages or salaries of any
of Parent's or Merger Sub's or any of their affiliates' employees)
incurred by Parent and/or Merger Sub prior to the termination of this
Agreement in connection with the Merger and the other transactions
contemplated hereby if this Agreement is terminated pursuant to Section
7.1(c)(iv); provided, however, that in no event shall payments by the
Company to Parent under this Section 7.3(b)(iii) exceed $1,880,821.

          (b)  Company Payment.

              (i)     Payment.  In the event that this Agreement is
terminated by Parent or the Company, as applicable pursuant to Sections
7.1(b)(i), 7.1(b)(iii), 7.1(c)(i), 7.1(c)(ii), 7.1(c)(iv) or 7.1(d)(ii),
the Company shall promptly (simultaneously in connection with a
termination pursuant to Section 7.1(d)(ii)), but in no event later than
two (2) business days after the date of such termination, pay Parent a
fee equal to Fourteen Million One Hundred Six Thousand One Hundred Fifty
Four Dollars ($14,106,154) in immediately available funds (the
"Termination Fee"); provided, that in the case of termination under
Sections 7.1(b)(i), 7.1(b)(iii) or 7.1(c)(ii):  (A) such payment shall be
made only if following the date hereof and prior to the termination of
this Agreement, there has been a public disclosure of an Acquisition
Proposal with respect to the Company and (1) within 12 months following
the termination of this Agreement an Acquisition of the Company is
consummated or (2) within 12 months following the termination of this
Agreement the Company enters into an agreement providing for an
Acquisition of the Company and an Acquisition of the Company is
consummated within 18 months of the termination of this Agreement and (B)
such payment shall be made promptly, but in no event later than two (2)
business days after the consummation of such Acquisition of the Company;
provided further, that in the case of termination under Section
7.1(c)(iv):  (A) such payment shall be made only if following the date
hereof and prior to the termination of this Agreement, there has been
disclosure (whether private, public or confidential) of an Acquisition
Proposal with respect to the Company and (1) within 12 months following
the termination of this Agreement an Acquisition of the Company is
consummated or (2) within 12 months following the termination of this
Agreement the Company enters into an agreement providing for an
Acquisition of the Company and an Acquisition of the Company is
consummated within 18 months of the termination of this Agreement, (B)
such payment shall be made promptly, but in no event later than two (2)
business days after the consummation of such Acquisition of the Company
and (C) such payment shall be reduced for any amounts paid to Parent by
the Company pursuant to Section 7.3(a)(iii).

              (ii)    Interest and Costs; Other Remedies.  The Company
acknowledges that the agreements contained in this Section 7.3(b) are an
integral part of the transactions contemplated by this Agreement, and
that, without these agreements, Parent would not enter into this
Agreement; accordingly, if the Company fails to pay in a timely manner
the amounts due pursuant to this Section 7.3(b), and, in order to obtain
such payment, Parent makes a claim that results in a judgment against the
Company for the amounts set forth in this Section 7.3(b), the Company
shall pay to Parent the reasonable costs and expenses of Parent
(including reasonable attorneys' fees and expenses) in connection with
such suit, together with interest on the amounts set forth in this
Section 7.3(b) at the prime rate of Citibank, N.A. in effect on the date
such payment was required to be made.  Payment of the fees described in
this Section 7.3(b) shall not be in lieu of damages incurred in the event
of breach of this Agreement.

              (iii)   Certain Definitions.  For the purposes of this
Section 7.3(b) only, "Acquisition," with respect to a party hereto, shall
mean any of the following transactions (other than the transactions
contemplated by this Agreement):  (i) a merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving the party pursuant to which the stockholders of the
party immediately preceding such transaction hold less than 50% of the
aggregate equity interests in the surviving or resulting entity of such
transaction or any direct or indirect parent thereof, (ii) a sale or
other disposition by the party of assets representing in excess of 40% of
the aggregate fair market value of the party's business immediately prior
to such sale, or (iii) the acquisition by any Person or group (including
by way of a tender offer or an exchange offer or issuance by the party or
such Person or group), directly or indirectly, of beneficial ownership or
a right to acquire beneficial ownership of shares representing in excess
of 40% of the voting power of the then outstanding shares of capital
stock of the party.

     7.4  Amendment.  Subject to applicable law, this Agreement may be
amended by the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after approval of
the Merger by the stockholders of the Company, provided, after approval
of the Merger by the stockholders of the Company, no amendment shall be
made which by law or in accordance with the rules of Nasdaq requires
further approval by the stockholders of the Company without such further
stockholder approval.  This Agreement may not be amended except by
execution of an instrument in writing signed on behalf of each of Parent,
Merger Sub and the Company.

     7.5  Extension; Waiver.  At any time prior to the Effective Time
either party hereto, by action taken or authorized by their respective
Board of Directors, may, to the extent legally allowed:  (i) extend the
time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations
and warranties made to such party contained herein or in any document
delivered pursuant hereto, and (iii) waive compliance with any of the
agreements or conditions for the benefit of such party contained herein.
 Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.  Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.

                              ARTICLE VIII
                            GENERAL PROVISIONS

     8.1  Non-Survival of Representations and Warranties.  The
representations and warranties of the Company, Parent and Merger Sub
contained in this Agreement, or any instrument delivered pursuant to this
Agreement, shall terminate at the Effective Time, and only the covenants
that by their terms survive the Effective Time and this Article VI shall
survive the Effective Time.

     8.2  Notices.  All notices and other communications hereunder shall
be in writing and shall be deemed duly given (i) on the date of delivery
if delivered personally, (ii) on the date of confirmation of receipt (or
the first business day following such receipt if the date is not a
business day) of transmission by telecopy or telefacsimile, or (iii) on
the date of confirmation of receipt (or the first business day following
such receipt if the date is not a business day) if delivered by a
nationally recognized courier service.  All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice:

          (a)  if to Parent or Merger Sub, to:

               Coherent, Inc.
               5100 Patrick Henry Drive, PO Box
               Santa Clara, CA 95054
               Attention:  Chief Executive Officer
               Telephone No.:  (408) 764-4000
               Telecopy No.:  (408) 970-9998

               with copies to (which shall not constitute notice):

               Coherent, Inc.
               5100 Patrick Henry Drive, PO Box 54980
               Santa Clara, CA 95054
               Attention:  General Counsel
               Telephone No.:  (408) 764-4000
               Telecopy No.:  (408) 970-9998

               Wilson Sonsini Goodrich & Rosati
               Professional Corporation
               650 Page Mill Road
               Palo Alto, California 94304-1050
               Attention:  Larry W. Sonsini, Esq.
               David J. Segre, Esq.
               Bret M. DiMarco, Esq.
               Telephone No.:  (650) 493-9300
               Telecopy No.:  (650) 493-6811
          (b)  if to the Company, to:

               Excel Technology, Inc.
               41 Research Way
               East Setauket, N.Y. 11753
               Attention:  Chief Executive Officer
               Telephone No.:  (631) 784-6100
               Telecopy No.:  (631) 784-6196

               with a copy to (which shall not constitute notice):

               Breslow Walker, LLP
               100 Jericho Quadrangle
               Jericho, NY 11753
               Attention:  Howard S. Breslow, Esq.
               Telephone No.:  (516) 822-6505
               Telecopy No.:  (516) 822-6544

     8.3  Interpretation; Knowledge.

          (a)  When a reference is made in this Agreement to Exhibits,
such reference shall be to an Exhibit to this Agreement unless otherwise
indicated.  When a reference is made in this Agreement to Sections, such
reference shall be to a section of this Agreement unless otherwise
indicated.  For purposes of this Agreement, the words "include,"
"includes" and "including," when used herein, shall be deemed in each
case to be followed by the words "without limitation."  The table of
contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  When reference is made herein to "the
business of" an entity, such reference shall be deemed to include the
business of such entity and its Subsidiaries, taken as a whole.  An
exception or disclosure made in the Company Disclosure Letter with regard
to a representation of the Company, or in the Parent Disclosure Letter
with regard to a representation of Parent or Merger Sub, shall be deemed
made with respect to any other representation by such party to which such
exception or disclosure is clearly relevant on its face based on the
content of such disclosure.  The term "business day" means a day other
than a Saturday, Sunday or other day in which banks located in New York,
New York are required or authorized not to open for business.

          (b)  For purposes of this Agreement, the term "Knowledge"
means, with respect to a party hereto, with respect to any matter in
question, that any of the "officers" (as such term is defined in Rule
16a-1(f) promulgated under the Exchange Act) of such party, has actual
knowledge of such matter, after due inquiry of their respective direct
reports (including outside legal counsel and accountants).

          (c)  For purposes of this Agreement, the term "Material Adverse
Effect," when used in connection with an entity, means any change, event,
violation, inaccuracy, circumstance, occurrence, state of facts,
development or effect (any such item, an "Effect"), individually or when
taken together with all other Effects that have occurred on or prior to
the date of determination of the occurrence of the Material Adverse
Effect, that is or is reasonably likely to (i) be materially adverse to
the business, assets (including intangible assets), capitalization,
condition (financial or otherwise) or results of operations of such
Person taken as a whole with its Subsidiaries or (ii) materially impede
the authority of such entity to consummate the transactions contemplated
by this Agreement in accordance with the terms hereof and applicable
Legal Requirements; provided, however, that, for purposes of clause (i)
above, in no event shall any of the following, alone or in combination,
be deemed to constitute, nor shall any of the following be taken into
account in determining whether there has been or is reasonably likely to
be, a Material Adverse Effect on any Person:  (A) any Effect resulting
from compliance with the requirements of this Agreement or proximately
from the public announcement of the execution of this Agreement or the
pendency of the Merger, (B) any Effect resulting from the announcement or
pendency of the Merger, (C) any change in such Person's stock price or
trading volume (it being understood that the facts or circumstances
giving rise to such change in stock price or trading volume may be taken
into account in determining whether there has been or is reasonably
likely to be a Material Adverse Effect on any Person), (D) any failure by
such Person to meet revenue or earnings projections (it being understood
that the facts or circumstances giving rise to or contributing to such
failure may be taken into account in determining whether there has been
or is reasonably likely to be a Material Adverse Effect on any Person),
(E) any Effect that results from changes affecting any of the industries
in which such Person operates generally or the United States economy
generally (which changes in each case do not disproportionately affect
such Person in any material respect), or (F) any Effect that results from
changes affecting general worldwide economic or capital market conditions
(which changes in each case do not disproportionately affect such Person
in any material respect).

          (d)  For purposes of this Agreement, the term "Person" shall
mean any individual, corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, company (including any limited liability
company or joint stock company), firm or other enterprise, association,
organization, entity or Governmental Entity.

     8.4  Counterparts.  This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.

     8.5  Entire Agreement; Third-Party Beneficiaries.  This Agreement
and the documents and instruments and other agreements among the parties
hereto as contemplated by or referred to herein, including the Company
Disclosure Letter and the Parent Disclosure Letter, (i) constitute the
entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter
hereof, it being understood that the Confidentiality Agreement shall
continue in full force and effect until the Closing and shall survive any
termination of this Agreement and (ii) are not intended, whether express
or implied, to confer upon any other Person any legal or equitable
rights, benefits or remedies hereunder, except as specifically provided,
following the Effective Time, in Section 5.10.

     8.6  Severability.  In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court
of competent jurisdiction to be illegal, void or unenforceable, the
remainder of this Agreement will continue in full force and effect and
the application of such provision to other Persons or circumstances will
be interpreted so as reasonably to effect the intent of the parties
hereto.  The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that
will achieve, to the greatest extent possible, the economic, business and
other purposes of such void or unenforceable provision.

     8.7  Other Remedies; Specific Performance.

          (a)  Other Remedies.  Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy.  The
parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.

          (b)  Specific Performance.  It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity, and each party hereby waives any
requirement to post a bond in connection with any such proceeding.

     8.8  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.

     8.9  Rules of Construction.  The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting
such agreement or document.

     8.10 Assignment.  No party may assign either this Agreement or any
of its rights, interests, or obligations hereunder without the prior
written approval of the other parties.  Any purported assignment in
violation of this Section 8.10 shall be void.  Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
permitted assigns.

     8.11 Waiver of Jury Trial.  EACH OF PARENT, MERGER SUB AND THE
COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF
PARENT, MERGER SUB OR THE COMPANY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.

                                  *****

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date
first written above.

                           COHERENT, INC.

                           By:    /s/ John Ambroseo
                                  .....................................

                           Name:  John Ambroseo
                           Title: Chief Executive Officer

                           SPIDER ACQUISITION CORPORATION

                           By:
                           Name:  [.......................]
                           Title: President and Chief Executive Officer

                           EXCEL TECHNOLOGY, INC.

                           By:    /s/ Antoine Dominic
                                  ......................................
                           Name:  Antoine Dominic
                           Title: Chief Executive Officer

                   ***AGREEMENT AND PLAN OF MERGER***

16