Exhibit 10.43

AGREEMENT AND PLAN OF MERGER

AMONG

NETWORK EQUIPMENT TECHNOLOGIES, INC.,

SIBLEY ACQUISITION CORP.,

QUINTUM  LLC,

QUINTUM TECHNOLOGIES, INC.

AND

CHENG T. CHEN, AS REPRESENTATIVE

OCTOBER 22, 2007

____________________________________________________________________________

TABLE OF CONTENTS

ARTICLE I CERTAIN DEFINITIONS

ARTICLE II THE MERGER

2.1

The Closing.

2.2

First Merger.

2.3

Escrow.

2.4

Second Merger.

2.5

Surrender of Certificates.

2.6

Holdover Option Payout

2.7

Dissenting Shares

2.8

Tax Withholding

2.9

Termination of Exchange Fund; No Liability

2.10

Further Assurances

2.11

Tax Consequences

2.12

Option Issuance

2.13

Limitation on Stock Issuance

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY

3.1

Organization and Good Standing

3.2

Subsidiaries

3.3

Power, Authorization and Validity.

3.4

Capitalization of the Company and its Subsidiaries.

3.5

No Conflict.

3.6

Litigation.

3.7

Taxes.

3.8

Company Financial Statements.

3.9

Title to Properties.

3.10

Absence of Certain Changes.

3.11

Contracts, Agreements, Arrangements, Commitments and Undertakings

3.12

No Default; No Restrictions.

3.13

Intellectual Property.

3.14

Compliance with Laws.

3.15

Certain Transactions and Agreements

3.16

Employees, ERISA and Other Compliance.

3.17

Corporate Documents

3.18

Merger Expenses

3.19

Books and Records.

3.20

Insurance.

3.21

Environmental Matters.

3.22

No Existing Discussions

3.23

Customers and Suppliers.

3.24

Products Liability and Warranty Liability

3.25

Accounts Receivable

3.26

Disclosure

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT

4.1

Organization and Good Standing.

4.2

Power, Authorization and Validity.

4.3

No Conflict

4.4

Interim Operations of Interim Sub and Quintum Sub

4.5

Stockholders Consent

4.6

Valid Issuance of Parent Common Stock.

4.7

SEC Filing; Financial Statements.

4.8

Disclosure

4.9

Sufficient Funds

4.10

Compliance with Laws; Taxes; Litigation

ARTICLE V COMPANY COVENANTS

5.1

Advice of Changes

5.2

Maintenance of Business.

5.3

Conduct of Business

5.4

Regulatory Approvals.

5.5

Approval of Company Stockholders.

5.6

Novations, Terminations, Amendments, Consents, Authorizations and Notices.

5.7

Litigation.

5.8

No Other Negotiations.

5.9

Access to Information.

5.10

Satisfaction of Conditions Precedent.

5.11

Notices to Company Stockholders and Employees.

5.12

Certain Closing Certificates and Documents.

5.13

Amendment to Restated Certificate

ARTICLE VI PARENT COVENANTS

6.1

Advice of Changes.

6.2

Regulatory Approvals.

6.3

Satisfaction of Conditions Precedent.

6.4

New York Stock Exchange Listing.

6.5

Registration of Parent Common Stock.

6.6

Parent Obligations.

6.7

Obligations of the Holders.

6.8

Tax Free Treatment

6.9

Indemnification of Directors and Officers

6.10

Employees and Contractors.

6.11

Access to Information

ARTICLE VII CONDITIONS TO CLOSING OF MERGER

7.1

Conditions to Each Party’s Obligation to Effect the Merger.

7.2

Additional Conditions to Obligations of Parent, Interim Sub and Quintum Sub.

7.3

Additional Conditions to Obligations of the Company.

ARTICLE VIII TERMINATION OF AGREEMENT

8.1

Termination by Mutual Consent.

8.2

Unilateral Termination.

8.3

Effect of Termination.

ARTICLE IX SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION  AND REMEDIES;
CONTINUING COVENANTS  

9.1

Survival.

9.2

Agreement to Indemnify.

9.3

Limitations.

9.4

Notice of Claim.

9.5

Defense of Third-Party Claims.

9.6

Contents of Notice of Claim.

9.7

Resolution of Notice of Claim.

9.8

Release of Remaining Escrow.

9.9

Tax Consequences of Indemnification Payments

9.10

Appointment of Representatives.

ARTICLE X MISCELLANEOUS

10.1

Governing Law

10.2

Assignment; Binding Upon Successors and Assigns

10.3

Severability

10.4

Counterparts

10.5

Other Remedies

10.6

Amendments and Waivers

10.7

Expenses

10.8

Attorneys’ Fees

10.9

Notices

10.10

Interpretation; Rules of Construction

10.11

Third Party Beneficiary Rights

10.12

Public Announcement

10.13

Entire Agreement

10.14

Waiver of Jury Trial

LIST OF EXHIBITS

Exhibit A-1

List of Company Stockholders executing the Voting Agreement

Exhibit A-2

Form of Voting Agreement

Exhibit B-1

List of employees executing the Employment and Noncompetition Agreement

Exhibit B-2

Form of Employment and Noncompetition Agreement

Exhibit C

Escrow Agreement

Exhibit D

Form of Stockholder Agreement

Exhibit E

Certificate of Amendment

Exhibit F

Subject Matter of Opinion of Counsel to the Company

Exhibit G

Form of Letter of Transmittal

Exhibit H

List of Company Stockholders executing the Stockholder Agreement

LIST OF SCHEDULES

Schedule 3

Company Disclosure Schedule

Schedule 7.2(g)

Contract Novations, Terminations, Amendments, Consents and Notices

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as
of October 22, 2007 (the “Agreement Date”) by and among Network Equipment
Technologies, Inc., a Delaware corporation (“Parent “), Sibley Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of Parent (“Interim
Sub”), Quintum LLC, a Delaware limited liability company  and a wholly owned
subsidiary of Parent (“Quintum Sub”), Quintum Technologies, Inc., a Delaware
corporation (the “Company”), and Cheng T. Chen, as Representative, solely with
respect to Article IX hereof and such other provisions hereof which specifically
refer to such Representative (the “Representative”).

RECITALS

A.

The parties intend that, subject to the terms and conditions of this Agreement,
(1) first, Interim Sub shall merge with and into the Company in a statutory
reverse triangular merger (the “First Merger”), with the Company to be the
surviving entity of the First Merger, and (2) as soon as practicable following
the effectiveness of the First Merger and as part of an integrated plan with the
First Merger, the Company shall merge with and into Quintum Sub in a statutory
forward merger (the “Second Merger” and collectively with the First Merger the
“Merger”) with Quintum Sub as the surviving entity of the Second Merger
(the ”Surviving Entity”), all on the terms and subject to the conditions of this
Agreement and pursuant to the applicable provisions of the Delaware Law.

B.

For United States income tax purposes, it is intended that the First Merger and
the Second Merger collectively qualify as a tax-free reorganization within the
meaning of Section 368(a) of the Code.  

C.

The Boards of Directors of Parent, Interim Sub, and the Company, and the Manager
of Quintum Sub have determined that the Merger is in the best interests of their
respective stockholders and members and have approved and declared advisable
this Agreement and the Merger.

D.

Concurrently with the execution and delivery of this Agreement, and as a
condition and inducement to Parent’s willingness to enter into this Agreement,
each Company Stockholder listed on Exhibit A-1 is executing and delivering to
Parent a Voting Agreement in substantially the form attached hereto as Exhibit
A-2 (a “Voting Agreement”).

E.

In order to induce Parent to enter into this Agreement, concurrently with the
execution and delivery of this Agreement, each of the individuals identified on
Exhibit B-1 will execute and deliver to the Company and Parent an Employment and
Noncompetition Agreement in substantially the form of Exhibit B-2 hereto (the
“Employment and Noncompetition Agreements”), each of which shall become
effective upon the Closing.  

F.

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

NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants and conditions contained herein, the parties hereby agree as follows:

ARTICLE I
CERTAIN DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth
below.  Unless indicated otherwise, all mathematical calculations contemplated
hereby shall be made to the fifth decimal place.

“Action” means an action, suit, arbitration, mediation, proceeding, claim or
investigation.

“Affiliate” has the meaning set forth in Rule 144 promulgated under the
Securities Act.

“Alternative Transaction” means:  (A) any acquisition or purchase of Company
Capital Stock from the Company by any person or “group” (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder)
representing more than a 15% voting interest in any class or series of Company
Capital Stock or any tender offer or exchange offer or privately negotiated
share transfer that if consummated would result in any person or “group” (as
defined under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) beneficially owning Company Capital Stock representing 15% or more
of the voting interest in any class or series of Company Capital Stock or any
merger, consolidation, business combination or similar transaction involving the
Company pursuant to which the Company Stockholders immediately preceding such
transaction hold less than 100% of the equity interests in any class or series
of capital stock of the surviving or resulting entity of such transaction; (B)
any sale, lease, exchange, transfer, license, acquisition or disposition of a
substantial portion of the assets of the Company; (C) any sale, lease, exchange,
transfer, license or disposition to a third party of the Company Business; or
(D) any initial public offering of capital stock or other securities of the
Company pursuant to a registration statement filed under the Securities Act.

“Applicable Law” means, collectively, all foreign, federal, state, local or
municipal laws, statutes, ordinances, regulations, and rules, and all orders,
writs, injunctions, awards, judgments and decrees applicable to the assets,
properties and business (and any regulations promulgated thereunder) of the
applicable company or entity.

“Average Parent Stock Price” means the average closing price for one share of
Parent Common Stock as quoted on the New York Stock Exchange during the ten (10)
consecutive trading days ending on and including the fifth day prior to the
Closing Date.  

“Balance Sheet Date” means June 30, 2007.

“Business Day” means any day (A) other than Saturday or Sunday and (B) other
than a day on which the United States federal government is closed for the
observance of any holiday.

“Certificates of Merger” means each of the First Certificate of Merger and the
Second Certificate of Merger.

“Closing” means the closing of the transactions necessary to consummate the
Merger.

“Closing Date” means a time and date on which the Closing shall occur 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 VII, or
at such other time and date as the parties hereto agree in writing.

“Closing Date Balance Sheet” means the unaudited consolidated balance sheet of
the Company as of immediately prior to the First Effective Time that has been
prepared in accordance with GAAP on a basis consistent with prior periods.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company Ancillary Agreements” means, collectively, each certificate to be
delivered on behalf of the Company by an officer or officers of the Company at
the Closing pursuant to Article VII and each agreement or document (other than
this Agreement) that the Company is to enter into as a party thereto pursuant to
this Agreement.

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

“Company Business” means the business of the Company and its Subsidiaries as
presently conducted.  

“Company Capital Stock” means the Company Common Stock and the Company Preferred
Stock, taken together.

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

“Company Disclosure Schedule” means the disclosure schedule attached hereto and
dated as of the Agreement Date and delivered by the Company to Parent on the
Agreement Date listing any exceptions to the representations and warranties of
the Company herein (each of which exceptions, in order to be effective, shall
clearly indicate the section to which it relates and each of which exceptions
shall also be deemed to be a representation and warranty made by the Company
under Article III hereof).

“Company Financial Statements” means (A) the Company’s audited consolidated
balance sheets dated June 30, 2005 and June 30, 2006 and unaudited consolidated
balance sheet dated June 30, 2007; (B) the Company Balance Sheet; (C) the
Company’s audited consolidated statement of income and statement of cash flows
for the years ended June 30, 2005 and June 30, 2006 and unaudited consolidated
statement of income and statement of cash flows for the year ended June 30,
2007; and (D) the Company’s unaudited consolidated statement of income and
statement of cash flows for the two months ended August 30, 2007, and (E) when
delivered pursuant to Section 7.2(s), the Company’s audited consolidated balance
sheet dated June 30, 2007 and audited consolidated statement of income and
statement of cash flows for the year ended June 30, 2007.

“Company Material Contract” means any Contract required to be listed on the
Company Disclosure Schedule pursuant to Section 3.11 or Section 3.13.

“Company Merger Expenses” means all out-of-pocket costs and expenses incurred by
the Company in connection with the Merger and this Agreement and the
transactions contemplated hereby (including any fees and expenses of legal
counsel, financial advisors, investment bankers and accountants).

“Company Preferred Stock” means all Preferred Stock of the Company taken
together, including the Series A Preferred Stock par value $0.01 per share, the
Series B Preferred Stock, par value $0.01 per share, the Series C Preferred
Stock, par value $0.01 per share, and the Series D Preferred Stock, par value
$0.01 per share.

“Company Products” means the products and services that are currently sold or
offered by the Company.

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

“Contract” means any written or oral legally binding contract, agreement,
instrument, arrangement, commitment, understanding or undertaking (including
leases, licenses, mortgages, notes, guarantees, sublicenses, subcontracts and
purchase orders).

“Delaware Law” means the Delaware General Corporation Law and the Delaware
Limited Liability Company Act, as applicable.

“Dissenting Shares” means any shares of Company Capital Stock that are issued
and outstanding immediately prior to the First Effective Time which were
entitled to vote on the Merger as class or otherwise and in respect of which
appraisal rights shall have been validly perfected in accordance with Delaware
Law in connection with the Merger.

“Documentation” means, collectively, programmers’ notes or logs, source code
annotations, user guides, manuals, instructions, software architecture designs,
layouts, and any other designs, plans, drawings, documentation, materials,
photographs, blueprints, memoranda and records that are primarily related to or
otherwise necessary for the use and exploitation of any Company Products,
whether in tangible or electronic form, whether owned by the Company or held by
the Company under any licenses or sublicenses (or similar grants of rights).

“Encumbrance” means, with respect to any asset, any mortgage, deed of trust,
lien, pledge, charge, security interest, title retention device, collateral
assignment, adverse claim, restriction or other encumbrance of any kind in
respect of such asset (including any restriction on the voting of any security,
any restriction on the transfer of any security or other asset, any restriction
on the receipt of any income derived from any asset, any restriction on the use
of any asset and any restriction on the possession, exercise or transfer of any
other attribute of ownership of any asset). For purposes of clarification only,
an inability to sell a security without registering such security for sale under
the Securities Act or other federal securities laws shall not represent an
Encumbrance.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

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

“Escrow Agent” means Computershare Trust Company, N.A.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“First Certificate of Merger” means the certificate of merger between the
Company and Interim Sub to be filed with the Office of the Secretary of State of
the State of Delaware at the time of Closing in such appropriate form as shall
be required by Delaware Law and mutually agreed by Parent and the Company.

“GAAP” means United States generally accepted accounting principles.

“Governmental Authority” means any court or tribunal, governmental or regulatory
body, administrative agency, commission or other governmental authority.

“Intellectual Property” means, collectively, worldwide industrial and
intellectual property rights, including Registered Intellectual Property, patent
rights, trademarks, trade dress rights, trade names, service marks, copyrights,
copyright registrations and applications therefore, mask work rights, and trade
secrets, proprietary processes and technology, architectures, designs,
specifications and technical drawings.

“Knowledge” means the knowledge of a particular fact, circumstance, event or
other matter in question by the President and Chief Executive Officer, any Vice
President or the Chief Technical Officer in the case of the Company and any
Executive Officer (as defined in Section 16 of the Exchange Act) in the case of
the Parent and shall include (i) any actual knowledge of the fact, circumstance
or event or (ii) knowledge of such fact, circumstance or event would be obtained
by reasonable inquiry under the circumstances.

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

“Material Adverse Change” and “Material Adverse Effect” when used in connection
with an entity means any change, event, circumstance, condition or effect that
is or is reasonably likely to be, individually or in the aggregate, materially
adverse in relation to the condition (financial or otherwise), capitalization,
properties, products, assets (including intangible assets), prospects,
liabilities, business, operations or results of operations of such entity and
its subsidiaries; provided, however, that the foregoing shall not include any
change, event, circumstance, condition or effect (individually or in the
aggregate with respect to such entity and its subsidiaries) primarily resulting
from: (i) a general deterioration in the economy or in the economic conditions
prevalent in the industry in which such entity and its subsidiaries operate but
only to the extent that such general deterioration does not affect such entity
and its subsidiaries in a materially adverse manner relative to other
participants in the economy or such industry, respectively; (ii) any change in
GAAP or Applicable Law, or the interpretation thereof; (iii) in the case of the
Parent, any change in the trading price of the Parent Common Stock as quoted on
the New York Stock Exchange, (iv) changes resulting from the announcement or
pendency of the transactions provided for in this Agreement, or (v) any force
majeure event, disruptions of suppliers, acts of terrorism, wars, acts of God
and the like.

“Merger Sub Ancillary Agreements” means, collectively, each certificate to be
delivered on behalf of Interim Sub or Quintum Sub by an officer or officers of
Interim Sub or Quintum Sub at the Closing pursuant to Article VII and each
Contract or document (other than this Agreement) that Interim Sub or Quintum
Sub, as the case may be, is to enter into as a party thereto pursuant to this
Agreement.

“Parent Ancillary Agreements” means, collectively, each certificate to be
delivered on behalf of Parent by an officer of Parent at the Closing pursuant to
Article VII and each Contract or document (other than this Agreement) that
Parent is to enter into as a party thereto pursuant to this Agreement.

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

“Parent Disclosure Schedule” means the disclosure schedule attached hereto and
dated as of the Agreement Date and delivered by the Parent to the Company on the
Agreement Date listing any exceptions to the representations and warranties of
the Parent herein (each of which exceptions, in order to be effective, shall
clearly indicate the section to which it relates and each of which exceptions
shall also be deemed to be a representation and warranty made by the Parent
under Article IV hereof).

“Permitted Encumbrances” means (A) statutory liens for taxes that are not yet
due and payable; (B) statutory liens to secure obligations to landlords, lessors
or renters under leases or rental agreements; (C) deposits or pledges made in
connection with, or to secure payment of, workers’ compensation, unemployment
insurance or similar programs mandated by Applicable Law; (D) statutory liens in
favor of carriers, warehousemen, mechanics and materialmen, to secure claims for
labor, materials or supplies and other like liens; and (E) any minor
imperfection of title or similar liens, charges or Encumbrances which
individually or in the aggregate with other such liens, charges and Encumbrances
does not impair the value of the property subject to such lien, charge or
Encumbrance or the use of such property in the conduct of the Company Business.

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

“Pro Rata Share” means, with respect to any holder of Company Capital Stock, the
percentage obtained by dividing (i) the aggregate amount of the Total
Stockholder Consideration payable to such holder by (ii) the Total Stockholder
Consideration payable to all holders.

“Publicly Available Software” shall mean each of (i) any software that contains,
or is derived in any manner (in whole or in part) from, any software that is
distributed as free software, open source software (e.g., GNU General Public
License, Apache Software License, Creative Commons license), or pursuant to
similar licensing and distribution models; and (ii) any software that requires
as a condition of use, modification, or distribution of such software that such
software or other software incorporated into, derived from, or distributed with
such software (a) be disclosed or distributed in source code form; (b) be
licensed for the purpose of making derivative works; or (c) be redistributable
at no or minimal charge.

“Registered Intellectual Property” shall mean United States, international and
foreign: (i) patents and patent applications (including provisional applications
and design patents and applications) and all reissues, divisions, divisionals,
renewals, extensions, counterparts, continuations and continuations-in-part
thereof, and all patents, applications, documents and filings claiming priority
thereto or serving as a basis for priority thereof; (ii) registered trademarks,
service marks, applications to register trademarks, applications to register
service marks, intent-to-use applications, or other registrations or
applications related to the indicia of title to trademarks; (iii) registered
copyrights and applications for copyright registration; and (iv)  any other
Intellectual Property the indicia of title to which is required to be the
subject of an application, certificate, filing, registration or other document
issued, filed with, or recorded by any Governmental Authority.

“Returns” means all reports, estimates, declarations of estimated tax,
information statements and returns relating to, or required to be filed in
connection with, any Taxes, including information returns or reports with
respect to backup withholding and other payments to third parties.

“SEC” means the Securities and Exchange Commission.

“Second Certificate of Merger” means the certificate of merger between the
Company and Quintum Sub to be filed with the Office of the Secretary of State of
the State of Delaware at the time of Closing in such appropriate form as shall
be required by Delaware Law and mutually agreed by Parent and the Company.

“Securities Act” means the Securities Act of 1933, as amended.

“Software” means any and all computer programs, including all related source
code and object code, interfaces, program modules, routines, subroutines,
program architecture, design concepts, system design, program structure,
sequence and organization.

“Stockholder Spreadsheet” means the spreadsheet which (A) as attached as
Schedule 3.4(c) of the Company Disclosure Schedule, shall set forth, as of the
Agreement Date, the following factual information relating to holders of Company
Capital Stock: (i) the names of all the Company Stockholders and (where
available) their respective last known addresses and taxpayer identification
numbers, and (ii) the number and kind of shares of Company Capital Stock held by
such persons and the respective certificate numbers; and (B) as updated and
delivered pursuant to Sections 5.12 and 7.2(i) below, shall be dated as of the
Closing Date and shall set forth, as of the Closing Date and immediately prior
to the First Effective Time, the following factual information relating to
holders of Company Capital Stock:  (i) the names of all the Company Stockholders
and (where available) their respective last known addresses and taxpayer
identification numbers; (ii) the number and kind of shares of Company Capital
Stock held by such persons and the respective certificate numbers; (iii) the
Company’s calculation of the number of shares of Parent Common Stock to be
issued to, and the amount of cash payable to, each Company Stockholder upon the
consummation of the Merger; and (iv) the Pro Rata Share of each Company
Stockholder with respect to the Escrow Amount and Patent Escrow Amount, in each
case presented as of, or calculated as of, the Closing Date and immediately
prior to the First Effective Time.

“Subsidiary” means a corporation or other business entity in which the Company
owns, directly or indirectly, at least a 50% interest or that is otherwise,
directly or indirectly, controlled by such entity.

“Tax” (and, with correlative meaning, “Taxes”) means (A) any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom duty or other tax, governmental fee
or other like assessment or charge of any kind whatsoever, together with any
interest or any penalty, addition to tax or additional amount imposed by any
governmental entity responsible for the imposition of any such tax (domestic or
foreign), (B) any liability for the payment of any amounts of the type described
in clause (A) of this sentence as a result of being a member of an affiliated,
consolidated, combined, unitary or aggregate group for any taxable period, and
(C) any liability for the payment of any amounts of the type described in clause
(A) or (B) of this sentence as a result of being a transferee of or successor to
any Person or as a result of any express or implied obligation to indemnify any
other Person.

“Use” shall mean the making, having made, using, testing, translating, copying,
distributing (directly or indirectly), transmitting, displaying, performing,
adapting, modifying, selling, offering for sale, renting, leasing, assigning,
licensing or preparing derivatives of Intellectual Property.

Other capitalized terms are defined elsewhere in this Agreement.

ARTICLE II
THE MERGER

2.1

The Closing.  

Subject to termination of this Agreement as provided in Article VIII, the
Closing shall take place at the offices of Heller Ehrman LLP, 275 Middlefield
Road, Menlo Park, California, on the Closing Date.

2.2

First Merger.

(a)

First Effective Time.  At the Closing, the First Certificate of Merger shall be
filed with the Secretary of State of the State of Delaware.  The First Merger
shall become effective at the time of the filing of the First Certificate of
Merger with the Office of the Secretary of State of the State of Delaware or
such later time as may be mutually agreed by Parent and the Company and set
forth in such First Certificate of Merger (the “First Effective Time”).

(i)

Conversion of Interim Sub Common Stock.  At the First Effective Time, each share
of Interim Sub common stock that is issued and outstanding immediately prior to
the First Effective Time shall be converted into one validly issued, fully paid
and non-assessable share of the Company Common Stock, and the shares of the
Company into which the shares of Interim Sub common stock are so converted shall
be the only shares of Company Common Stock that are issued and outstanding
immediately after the First Effective Time.

(ii)

Cancellation of Treasury Stock of Company.  Notwithstanding the provisions of
Section 2.2(a)(iii) below, at the First Effective Time each share of Company
Common Stock held by the Company immediately prior to the First Effective Time
shall be cancelled and extinguished without any conversion thereof.

(iii)

Merger Consideration and Conversion of Company Capital Stock.  

(A)

Merger Consideration.

“Total Consideration” is an amount equal to $41,000,000 less all Company Merger
Expenses.

“Total Stockholder Consideration” is (A) Total Consideration less (B) any
Holdover Option Termination Payments (defined in Section 2.2(a)(iii)(D) below).

“Total Cash Consideration” is an amount equal to (A) $20,500,000, less (B) any
Holdover Option Termination Payments.

“Total Stock Consideration” is an amount equal to Total Stockholder
Consideration less the Total Cash Consideration.

“Accredited Company Stockholders” means the Company Stockholders whom the Parent
reasonably believes are “accredited investors” as that term is defined in Rule
501 of Regulation D promulgated under the Securities Act.

“Nonaccredited Company Stockholders” means the Company Stockholders who are not
Accredited Company Stockholders.

“Pari Passu Consideration” means the portion of Total Stockholder Consideration
that each share of Company Capital Stock will be entitled to receive as a result
of the First Merger, as set forth in the Certificate of Incorporation of the
Company in effect immediately prior to the First Effective Time, taking into
account any applicable liquidation preferences, conversion adjustments, and
other provisions thereof.

“Cash Proportion” means the proportion that (A) the result of the Total Cash
Consideration less the aggregate amount of Pari Passu Consideration that the
Nonaccredited Company Stockholders have a right to receive pursuant to
 2.2(a)(iii)(B), bears to (B) Total Stockholder Consideration.

“Stock Proportion” means the proportion that (A) Total Stock Consideration bears
to (B) Total Stockholder Consideration.

(B)

Conversion of Company Capital Stock.  Subject to the terms and conditions of
this Agreement, at the First Effective Time, each share of Company Capital Stock
that is issued and outstanding immediately prior to the First Effective Time
shall, by virtue of the Merger and without the need for any further action on
the part of the holder thereof, be converted into and represent the right to
receive the applicable Pari Passu Consideration.  Each Nonaccredited Company
Stockholder, shall receive its entire Pari Passu Consideration in the form of
cash and each Company Stockholder that is an Accredited Company Stockholder will
receive the Cash Proportion of its Pari Passu Consideration in cash and the
Stock Proportion in shares of Parent Common Stock valued at the Average Parent
Stock Price (provided that the Parent may at its sole discretion pay the entire
Pari Passu Consideration in the form of cash to an Accredited Company
Stockholder if such stockholder does not execute the Stockholder Agreement). In
the event that there is any disagreement between a particular Company
Stockholder, the Company or the Parent as to whether such Company Stockholder is
an Accredited Company Stockholder, the Parent’s determination as to such matter
shall govern for purposes of this Agreement.  The preceding provisions of this
Section 2.2(a)(iii)(B) are subject to the provisions of Section 2.7 (regarding
rights of holders of Dissenting Shares) and Section 2.3 (regarding the
withholding of the Escrow Amount and Patent Escrow Amount).

(C)

Aggregation; Fractional Amounts.  The number of shares of Parent Common Stock
that each Company Stockholder is entitled to receive pursuant to Section
2.2(a)(iii)(B) shall be calculated based on the aggregate number of shares of
Company Capital Stock held by such Company Stockholder.  In lieu of any
fractional shares of Parent Common Stock resulting from such aggregation to
which a Company Stockholder would otherwise be entitled, such Company
Stockholder shall receive cash equal to such fraction multiplied by the Average
Parent Stock Price.  The amount of cash each Company Stockholder is entitled to
receive pursuant to Section 2.2(a)(iii)(B) shall be aggregated and rounded to
the nearest cent with $0.005 rounded up.

(D)

Treatment of Holdover Options and Warrants.  All outstanding options and
warrants to purchase Company Capital Stock (each a “Holdover Option”) that are
unexercised as of the First Effective Time shall terminate and be cancelled as
of the First Effective Time and the holders of such Holdover Options (each a
“Holdover Optionee”) shall only be entitled to receive an amount per share
issuable upon exercise of such Holdover Option equal to the Pari Passu
Consideration less the exercise price per share of the Holdover Options held by
such holder, to be paid in cash in accordance with the terms of the stock option
plan or other agreements pursuant to which such Holdover Option was issued (the
aggregate of such amounts is referred to herein as the “Holdover Option
Termination Payments”).  After the First Effective Time, any such Holdover
Option shall no longer be exercisable by the former holder thereof, and no
Person shall have any right under any plan, program or arrangement with respect
to the equity securities of the Surviving Entity.

(E)

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

(b)

Surviving Entity of the First Merger.  At and upon the First Effective Time:

(i)

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

(ii)

the Certificate of Incorporation of the Company as the surviving corporation
shall be amended and restated in its entirety to read as the Certificate of
Incorporation of Interim Sub as in effect immediately prior to the First
Effective Time;

(iii)

the Bylaws of the Company as the surviving corporation shall be amended and
restated in their entirety to read as the Bylaws of Interim Sub as in effect
immediately prior to the First Effective Time;

(iv)

the officers of Interim Sub immediately prior to the First Effective Time shall
be appointed as the officers of the Company as the surviving corporation
immediately after the First Effective Time until their respective successors are
duly appointed; and

(v)

the members of the Board of Directors of Interim Sub immediately prior to the
First Effective Time shall be appointed as the members of the Board of Directors
of the Company as the surviving corporation immediately after the First
Effective Time until their respective successors are duly elected or appointed
and qualified.

2.3

Escrow.  

(a)

At the First Effective Time, Parent, Escrow Agent and the Representative shall
have entered into an Escrow Agreement in substantially the form attached hereto
as Exhibit C (the “Escrow Agreement”).  An amount of cash and Parent Common
Stock (valued at the Average Parent Stock Price) equal to $5,000,000 (the
“Escrow Amount”) will be withheld from the Total Stockholder Consideration
otherwise deliverable to Company Stockholders, and shall be held by the Escrow
Agent in escrow for the payment of Damages to which any Parent Indemnified
Person may be entitled under Article IX of this Agreement.  At the First
Effective Time, the Parent shall set aside in escrow with respect to each
Company Stockholder (other than Company Stockholders holding shares of Company
Capital Stock which constitute Dissenting Shares) an amount of cash and/or a
number of shares of Parent Common Stock equal to such Company Stockholder’s Pro
Rata Share of the Escrow Amount, without any action by the Company Stockholders.
 Subject to any claims for indemnification made by the Parent, the Escrow Amount
shall be released at 11:59 p.m. California time on the date that is eighteen
(18) months after the Closing Date (the “Escrow Expiration Date”) to the Company
Stockholder based on such Person’s Pro Rata Share.

(b)

In addition to and separate from the Escrow Amount, an amount equal to
$1,000,000 in cash (the “Patent Escrow Amount”) shall be set aside from the cash
portion of the Total Stockholder Consideration for payment of any Damages
related to the patent claims filed against the Company by Teles AG
Informationstechnologien (the “Patent Claim”). At the First Effective Time, the
Parent shall set aside in escrow with respect to each Company Stockholder (other
than Company Stockholders holding shares of Company Capital Stock which
constitute Dissenting Shares) an amount of cash equal to such Company
Stockholder’s Pro Rata Share of the Patent Escrow Amount, without any action by
the Company Stockholders.  Any Damages related to the Patent Claim that are
incurred by the Company or any Parent Indemnified Person commencing upon the
Agreement Date and continuing until the Patent Escrow Expiration Date (as
defined in Section 9.2 below) shall first be indemnified out of the Patent
Escrow Amount.  For the avoidance of doubt, such indemnification of the Company
from the Patent Escrow Account for Damages related to the Patent Claim that are
incurred by the Company shall be mandatory, may not be waived by the Company and
shall pertain irrespective of any patent-related disclosures related to
Company’s representations and warranties contained herein.  Upon the Patent
Escrow Expiration Date, any remaining Patent Escrow Amount after payment of all
Damages related to the Patent Claim shall be released to the Company
Stockholders based on such Person’s Pro Rata Share.  

(c)

Approval by the Company Stockholders of this Agreement shall constitute approval
of the Escrow Agreement and all arrangements relating thereto, including without
limitation the placement of the Escrow Amount and the Patent Escrow Amount with
the Escrow Agent and the appointment of the Representative as set forth in
Article IX below.

2.4

Second Merger.  

(a)

Second Effective Time.  As soon as practicable following the First Effective
Time, the Company shall file the Second Certificate of Merger with the Secretary
of State of the state of Delaware.  The Second Merger shall become effective at
the time of the filing of the Second Certificate of Merger with the Office of
the Secretary of State of the State of Delaware or such later time as may be
mutually agreed by Parent and the Company and set forth in such Second
Certificate of Merger (the “Second Effective Time”).

(b)

Conversion of Stock.  At the Second Effective Time, (i) each share of Company
Common Stock that is issued and outstanding immediately prior to the Second
Effective Time shall be cancelled and extinguished without any conversion
thereof, and (ii) the membership interests in Quintum Sub that are issued and
outstanding immediately prior to the Second Effective Time will continue to
constitute the only validly issued, fully paid and nonassessable membership
interests of the Surviving Entity.

(c)

Surviving Entity of the Second Merger.  At and upon the Second Effective Time:

(i)

the separate existence of the Company shall cease and the Company shall be
merged with and into Quintum Sub, and Quintum Sub shall be the Surviving Entity
of the Second Merger pursuant to the terms of this Agreement and the Second
Certificate of Merger;

(ii)

the Certificate of Formation of Quintum Sub shall continue unchanged (except the
name of Quintum Sub shall be as set forth in the Second Certificate of Merger),
and be the Certificate of Formation of the Surviving Entity;

(iii)

the Operating Agreement of Quintum Sub shall continue unchanged and be the
Operating Agreement of the Surviving Entity; and

(iv)

the sole member of Quintum Sub immediately prior to the Second Effective Time
shall continue to be the sole member of the Surviving Entity immediately
following the Second Effective Time;

(v)

the Manager of Quintum Sub immediately prior to the Second Effective Time shall
continue to be the Manager of the Surviving Entity immediately following the
Second Effective Time.

2.5

Surrender of Certificates.  

(a)

Computershare, Inc., a Delaware Corporation and its fully owned subsidiary
Computershare Trust Company, N.A., a national banking association shall act as
exchange agent (the “Exchange Agent”) in the Merger.   The Company may
distribute to each holder of record of a certificate or certificates which
immediately prior to the First Effective Time represented shares of Company
Capital Stock (the “Certificates”) a letter of transmittal (the “Letter of
Transmittal”) in substantially the form attached hereto as Exhibit G.  Subject
to receipt by the Exchange Agent of the Certificates for cancellation, together
with a duly completed and validly executed Letter of Transmittal and any other
documents as Parent or the Exchange Agent shall require, the Exchange Agent
shall on the Closing Date or as soon thereafter as reasonably practicable,
subject to the terms of Section 2.3 (regarding the depositing in escrow of the
Escrow Amount and Patent Escrow Amount), cause to be delivered to such holders
that portion of the Total Stockholder Consideration which such Company
Stockholder has the right to receive pursuant to Section 2.2(a)(iii).  As soon
as reasonably practicable after the Closing Date, the Parent shall cause the
Exchange Agent to mail a Letter of Transmittal to each holder of a Certificate
that has not yet provided to the Exchange Agent a completed Letter of
Transmittal and upon receipt of the Certificates for cancellation, together with
a duly completed and validly executed Letter of Transmittal and any other
documents as Parent or the Exchange Agent shall require, the Exchange Agent
shall, subject to the terms of Section 2.3 (regarding the depositing in escrow
of the Escrow Amount and Patent Escrow Amount), cause to be delivered to such
Company Stockholder that portion of the Total Consideration which such Company
Stockholder has the right to receive pursuant to Section 2.2(a)(iii).  In the
event any Certificate shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed, and provided such Person shall have provided to Parent an
indemnity agreement or bond (in each case in a form and substance determined by
the Board of Directors of Parent in the exercise of its discretion) against any
claim that may be made against Parent with respect to the Certificate alleged to
have been lost, stolen or destroyed, the Exchange Agent shall, as soon as
reasonably practicable following the receipt by the Exchange Agent of the
foregoing documents, subject to the terms of Section 2.3 (regarding the deposit
of the Escrow Amount and Patent Escrow Amount), issue in exchange for such lost,
stolen or destroyed Certificate that portion of the Total Consideration and any
other amount payable pursuant to Section 2.2(a)(iii) represented by the lost,
stolen or destroyed Certificate in exchange therefore which the Company
Stockholder has the right to receive.

(b)

From and after the First Effective Time, no shares of Company Capital Stock will
be deemed to be outstanding, and holders of Certificates formerly representing
such Company Capital Stock shall cease to have any rights with respect thereto
except as provided herein or by Applicable Law.

(c)

At the First Effective Time, the stock transfer books of Company shall be closed
and no transfer of Company Capital Stock shall thereafter be made.  If, after
the First Effective Time, Certificates formerly representing shares of Company
Capital Stock are presented to Parent or the Surviving Entity, they shall be
cancelled and exchanged for that portion of the Total Consideration and any
other amount payable with respect to such Company Capital Stock in accordance
with Section 2.2(a)(iii), subject to the terms of Section 2.3.

2.6

Holdover Option Payout

.   As soon as reasonably practicable after the First Effective Time, the Parent
or the Surviving Entity shall pay to each Holdover Optionee the cash payment
that such holder shall be entitled to pursuant to Section 2.2(a)(iii)(D),
subject to any tax withholding as described in Section 2.8 below.

2.7

Dissenting Shares

.  If, in connection with the Merger, holders of Company Capital Stock shall
have demanded and validly perfected appraisal rights pursuant to Section 263 of
Delaware Law, none of such Dissenting Shares shall be converted into a right to
receive a portion of the Total Closing Consideration, if any, or any other
amount payable with respect to such Company Capital Stock in accordance with
this Article II, but instead shall be converted into the right to receive such
consideration as may be determined to be due with respect to such Dissenting
Shares pursuant to Delaware Law.  Each holder of Dissenting Shares who, pursuant
to the provisions of Delaware Law, becomes entitled to payment of the fair value
of such shares shall receive payment therefore in accordance with Delaware Law
(but only after the value therefore shall have been agreed upon or finally
determined pursuant to Delaware Law).  In the event that any Company Stockholder
fails to make an effective demand for payment or fails to perfect such
stockholder’s appraisal rights as to such stockholder’s shares of Company
Capital Stock, or any Dissenting Shares shall otherwise lose their status as
Dissenting Shares, then any such shares shall immediately be converted into the
right to receive the consideration issuable pursuant to this Article II in
respect of such shares as if such shares had never been treated as Dissenting
Shares, and Parent shall issue and deliver to the holder thereof, at (or as
promptly as reasonably practicable after) the applicable time or times specified
in Section 2.5, following the satisfaction of the applicable conditions set
forth in Section 2.5, the portion of the Total Consideration and any other
amounts, to which such Company Stockholder would have been entitled under this
Article II.  The Company shall give Parent (i) prompt notice of any demand
received by the Company for appraisal of Company Capital Stock or notice of
exercise of a Company Stockholder’s appraisal rights in accordance with Delaware
Law and (ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal rights under such law.  The Company agrees
that, except with Parent’s prior written consent, it shall not make any payment
or offer to make any payment with respect to, or settle or offer to settle, any
such exercise of appraisal rights.

2.8

Tax Withholding

.  Parent or Parent’s agent shall be entitled to deduct and withhold from the
Total Consideration and any other payment otherwise payable or otherwise
deliverable pursuant to this Agreement to any to any holder or former holder of
Company Capital Stock or Holdover Options the amounts required to be deducted or
withheld under the Code or any provision of state, local or foreign Tax law,
with respect to the making of such payment, or with respect to income arising
from the lapse of vesting restrictions in connection with the Merger to the
extent applicable withholdings have not previously been made by the Company.  To
the extent that amounts are so withheld, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the Company
Stockholder or Holdover Optionee in respect of whom such deduction and
withholding was made.

2.9

Termination of Exchange Fund; No Liability

.  At any time following the first anniversary of the Closing Date, Parent shall
be entitled to require the Exchange Agent to deliver to it any shares of Parent
Common Stock which had been made available to the Exchange Agent and which have
not been disbursed to holders of Company Capital Stock, and thereafter such
holder of Company Capital Stock shall be entitled to look only to Parent
(subject to abandoned property, escheat or other similar law) with respect to
the shares of Parent Common Stock due upon surrender of their Company Capital
Stock, without any interest thereon.  Neither Parent, Interim Sub, Quintum Sub
nor Company shall be liable to any holder of Company Capital Stock or Parent
Common Stock, as the case may be, for such shares (or dividends or distributions
with respect thereto) delivered to a public official pursuant to any applicable
abandoned property, escheat or other similar law following the passage of time
specified therein.

2.10

Further Assurances

.  If, at any time before or after the First Effective Time, any of the parties
hereto reasonably believes or is advised that any further instruments, deeds,
assignments or assurances are reasonably necessary to consummate the Merger or
to carry out the purposes and intent of this Agreement at or after the Closing,
then the Company and Parent and their respective officers and directors shall
execute and deliver all such proper deeds, assignments, instruments and
assurances and do all other things reasonably necessary to carry out the purpose
and intent of this Agreement.

2.11

Tax Consequences

.  The parties hereto intend the Merger to constitute a reorganization within
the meaning of Section 368(a) of the Code and hereby adopt this Agreement as a
“plan of reorganization” within the meaning of Section 1.368-2(g) and 1.368-3(a)
of the United States Treasury Regulations.  The parties hereto shall timely
satisfy or cause to be satisfied all applicable tax reporting and filing
requirements with respect to the transactions contemplated hereby, including the
reporting requirements of Treasury Regulations Section 1.368-3.  Notwithstanding
the foregoing, Parent makes no representations or warranties to any holder of
Company Capital Stock or Holdover Options regarding the Tax treatment of the
Merger, or any of the Tax consequences to any holder of Company Capital Stock or
Holdover Options of this Agreement, the Merger or any of the other transactions
or agreements contemplated hereby.  The Company acknowledges that the Company
and the holders of Company Capital Stock or Holdover Options are relying solely
on their own Tax advisors in connection with this Agreement, the Merger and the
other transactions and agreements contemplated hereby.

2.12

Option Issuance

.  Parent shall, within 60 days after the Closing, grant to employees of the
Company who continue as employees of the Surviving Entity or Parent, options to
purchase shares of Parent Common Stock (“New Employee Stock Options”) pursuant
to Parent’s existing stock option program (“Parent Stock Option Program”).  The
aggregate number of New Employee Stock Options to be issued hereunder shall be
the number of shares that would result in such options having an aggregate value
of $3,000,000, determined using the Black-Scholes option pricing formula and a
single option award approach, with an assumed exercise price equal to the
Average Parent Stock Price and such other valuation assumptions as Parent has
applied to its outstanding stock options for Parent Common Stock in accordance
with SFAS 123R. The New Employee Stock Options shall be granted in such
individual amounts as Parent deems appropriate in its sole discretion and (i)
shall have an exercise price equal to the fair value of Parent Common Stock on
the date of grant, as determined in accordance with the Parent Stock Option
Program, (ii) shall vest over four years (with one-fourth vesting one year after
the date of grant and the balance vesting in equal monthly installments over the
subsequent three years), and (iii) shall be on such other terms as generally
applied by Parent under the Parent Stock Option Program.

2.13

Limitation on Stock Issuance

.  Notwithstanding anything to the contrary herein, Parent shall not issue any
Parent Common Stock under any provision of this Agreement, including but not
limited to such issuance as part of the Total Closing Consideration, if such
issuance would constitute the issuance of greater than 19.9% of Parent’s
outstanding stock at the Closing for purposes of the rules and regulations of
the New York Stock Exchange, including but not limited to Para. 312.03. In such
event, the Parent shall substitute cash for Parent Common Stock with respect to
a sufficient number of shares to reduce such percentage to less than 19.9%.
 Notwithstanding the foregoing, if as a result of the additional cash
consideration required pursuant to this Section 2.13, the requirements for a
“plan of reorganization” pursuant to Section 2.11 above are not met, then either
Parent or the Company shall have the right to terminate the Agreement as set
forth in Section 8.2(f) below.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Subject to the exceptions set forth in a numbered or lettered section of the
Company Disclosure Schedule, the Company represents and warrants to Parent as
follows:

3.1

Organization and Good Standing

.  The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.  The Company has the corporate
power and corporate authority to own, operate and lease its properties and to
carry on the Company Business.  Except as set forth in Schedule 3.1 of the
Company Disclosure Schedule, the Company is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its activities
makes such qualification or licensing necessary.  Without limiting the
foregoing, the Company is so qualified or licensed in each state listed on
Schedule 3.1 of the Company Disclosure Schedule.  Schedule 3.1 of the Company
Disclosure Schedule also contains a true and complete listing of the locations
of all sales offices and any other offices or facilities of the Company and a
true and complete list of all states in which the Company maintains any
employees.  The Company is not in violation of its Certificate of Incorporation
or Bylaws, each as amended to date. The Company has made available to the Parent
complete and accurate copies of the minutes of all meetings of the stockholders
of the Company and the board of directors of the Company.  

3.2

Subsidiaries

. Each Subsidiary of the Company is identified on Schedule 3.2 of the Company
Disclosure Schedule together with a listing of the jurisdiction in which each
such Subsidiary is organized.  Each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation.  Each Subsidiary has the corporate power and
corporate authority to own, operate and lease its properties and to carry on the
Company Business.  Each Subsidiary is duly qualified or licensed to do business,
and is in good standing, in each jurisdiction where the character of the
properties owned, leased or operated by it of the nature of its activities makes
such qualification or licensing necessary.  Schedule 3.2 of the Company
Disclosure Schedule also contains a true and complete listing of the locations
of all sales offices and any other offices or facilities of each Subsidiary and
a true and complete list of all countries in which each Subsidiary maintains
employees.

3.3

Power, Authorization and Validity.

(a)

Power and Authority.  The Company has all requisite corporate power and
corporate authority to enter into, execute, deliver and perform its obligations
under this Agreement and each of the Company Ancillary Agreements and to
consummate the Merger.  The Merger and the execution, delivery and performance
by the Company of this Agreement, each of the Company Ancillary Agreements and
all other Contracts, transactions and actions contemplated hereby or thereby,
have been duly and validly approved and authorized by the Company’s Board of
Directors and, upon receipt of the Stockholder Approval (as defined in Section
3.3(d) below), will be duly and validly approved by the Company Stockholders.

(b)

No Consents.  Except as set forth on Schedule 3.3(b) of the Company Disclosure
Schedule, no consent, approval, order or authorization of, or registration,
declaration or filing with (i) any Governmental Authority, or (ii) any other
Person is necessary or required to be made or obtained by the Company or any
Subsidiary to enable the Company to lawfully execute and deliver, enter into,
and perform its obligations under this Agreement and each of the Company
Ancillary Agreements or to consummate the Merger (including the consent of any
Person required to be obtained in order to keep any Contract between such Person
and the Company in effect following the Merger or to provide that the Company is
not in breach or violation of any such Contract following the Merger), except
for (i) the filing of the Certificates of Merger with the Office of the
Secretary of State of the State of Delaware; and (ii) such other consents,
authorizations, filings, approvals, notices and registrations which, if not
obtained or made, would not be material to the Company or Parent and would not
prevent, materially alter or delay any of the transactions contemplated by this
Agreement.

(c)

Enforceability.  This Agreement has been duly executed and delivered by the
Company.  Assuming the due authorization, execution and delivery by the other
parties hereto, this Agreement and each of the Company Ancillary Agreements are,
or when executed by the Company shall be, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, subject to the effect of (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to rights of creditors generally and (ii) rules of law and equity
governing specific performance, injunctive relief and other equitable remedies.

(d)

Required Vote of Stockholders.  The affirmative vote or consent of the Company
Stockholders listed on Exhibit A-1 (the “Stockholder Approval”) is the only vote
or consent of the holders of any class or series of Company’s Capital Stock
necessary to adopt this Agreement.  The record date under Delaware Law and the
Certificate of Incorporation, and the Bylaws of the Company for purposes of
determining stockholders of the Company entitled to give consents with respect
to the Stockholder Approval is the Agreement Date.  The Stockholder Approval
will be obtained following the execution and delivery of this Agreement by the
parties hereto in a manner fully in accordance with, and without any violation
of, Applicable Law.

3.4

Capitalization of the Company and its Subsidiaries.

(a)

Authorized and Outstanding Capital Stock of the Company.  The authorized capital
stock of the Company and the number of shares issued and outstanding of each
class of Company Capital Stock, as well as all outstanding securities
convertible or exchangeable for Company Capital Stock, are set forth on Schedule
3.4(a) of the Company Disclosure Schedule.  The numbers and kind of issued and
outstanding shares of Company Capital Stock held by each Company Stockholder as
of the Agreement Date are also set forth on Schedule 3.4(a) of the Company
Disclosure Schedule.  No shares of Company Capital Stock are issued or
outstanding as of the Agreement Date that are not set forth on Schedule 3.4(a)
of the Company Disclosure Schedule, and no such shares shall be issued or
outstanding as of the Closing Date that are not set forth on Schedule 3.4(a) of
the Company Disclosure Schedule, other than as a result of the exercise of
outstanding option or warrants immediately prior to the First Effective Time.
 The Company holds no treasury shares.  All issued and outstanding shares of
Company Stock have been duly authorized and validly issued, are fully paid and
nonassessable, were not issued in violation of and are not subject to any right
of rescission, right of first refusal or preemptive right, and have been
offered, issued, sold and delivered by the Company in compliance with all
requirements of Applicable Law and all requirements set forth in applicable
Contracts.  There is no Liability for dividends accrued and unpaid by the
Company.

(b)

No Other Rights.  Except as set forth on Schedule 3.4(b) of the Company
Disclosure Schedule, there are no stock appreciation rights, options, warrants,
calls, rights, commitments, conversion privileges or preemptive or other rights
or Contracts outstanding to purchase or otherwise acquire any shares of Company
Capital Stock or any securities or debt convertible into or exchangeable for
Company Capital Stock or obligating the Company to grant, extend or enter into
any such option, warrant, call, right, commitment, conversion privilege or
preemptive or other right or Contract.  Except for the Voting Agreements and as
set forth on Schedule 3.4(b) of the Company Disclosure Schedule, there are no
voting agreements, registration rights, rights of first refusal, preemptive
rights, co-sale rights or other restrictions applicable to any outstanding
securities of the Company.  The Company’s stock option plans and agreements
permit the cancellation of the Holdover Options as set forth in Section
2.2(a)(iii)(D).

(c)

Stockholder Spreadsheet.  The Stockholder Spreadsheet is attached hereto as
Schedule 3.4(c) of the Company Disclosure Schedule.  The information set forth
on the Stockholder Spreadsheet (except for stockholder addresses and taxpayer
identification numbers as to which the Company makes no representation)  is
true, complete and accurate as of the Agreement Date and subject to the exercise
of outstanding warrants to purchase Company Capital Stock, will be true,
complete and accurate as of the Closing Date and immediately prior to the First
Effective Time.

(d)

Authorized and Outstanding Capital Stock of the Subsidiaries; No Other Rights.
 Schedule 3.4(d) of the Company Disclosure Schedule sets forth (i) the name of
each Subsidiary, (ii) the capitalization of each Subsidiary and (iii) the
identity of each holder of capital stock of each such Subsidiary.  All issued
and outstanding shares of capital stock of each of the Subsidiaries has been
duly authorized and validly issued, are fully paid and nonassessable, were not
issued in violation of and are not subject to any right of rescission, right of
first refusal or preemptive right, and have been offered, issued, sold and
delivered by the Company in compliance with all requirements of Applicable Law
and all requirements set forth in applicable Contracts.  There are no stock
appreciation rights, options, warrants, calls, rights, commitments, conversion
privileges or preemptive or other rights or Contracts outstanding to purchase or
otherwise acquire any shares of capital stock of any Subsidiary or any
securities or debt convertible into or exchangeable for capital stock of any
Subsidiary or obligating any Subsidiary to grant, extend or enter into any such
option, warrant, call, right, commitment, conversion privilege or preemptive or
other right or Contract.

3.5

No Conflict.  

Neither the execution and delivery of this Agreement or any of the Company
Ancillary Agreements by the Company, nor the consummation of the Merger or any
other transaction contemplated hereby or thereby, shall conflict with, result in
a termination, breach, impairment or violation of (with or without notice or
lapse of time, or both), or constitute a default, or require the consent,
release, waiver or approval of any third party, under:  (a) any provision of the
Certificate of Incorporation or Bylaws of the Company or other comparable
charter documents of any Subsidiary, each as currently in effect; (b) any
Applicable Law applicable to the Company, any Subsidiary or any of their
respective assets or properties; or (c) any Company Material Contract.  Except
as set forth on Schedule 3.5 of the Company Disclosure Schedule, neither the
Company’s entering into this Agreement nor the consummation of the Merger shall
change the obligation or right of the Company or any Subsidiary as they exist at
the Closing and without giving effect to any action taken by Parent after the
Closing to make payments to or receive payments from any customer or supplier of
the Company or any Subsidiary.

3.6

Litigation.  

Except as set forth on Schedule 3.6 of the Company Disclosure Schedule, there is
no Action pending against the Company or any Subsidiary (or against any officer,
director, employee or agent of the Company or any Subsidiary in their capacity
as such or relating to their employment, services or relationship with the
Company or any such Subsidiary) before any Governmental Authority, arbitrator or
mediator, nor, to the Knowledge of the Company, has any such Action been
threatened.  The Company has not received any notice of any judgment, decree,
injunction, rule or order of any Governmental Authority, arbitrator or mediator
outstanding against the Company or any Subsidiary.  To the Company’s Knowledge,
there is no basis for any person to assert a claim against the Company based
upon the Company’s entering into this Agreement or any Company Ancillary
Agreement or consummating the Merger or any of the transactions contemplated by
this Agreement or any Company Ancillary Agreement.  Neither the Company nor any
Subsidiary has any Action pending against any Governmental Authority or other
Person.  

3.7

Taxes.

(a)

Tax Returns and Audits.  

(i)

The Company (and any consolidated, combined, unitary or aggregate group for Tax
purposes of which the Company is or has been a member) and each Subsidiary, (A)
has properly completed and timely filed all foreign, federal, state, local and
municipal tax and information returns related to Taxes (the “Returns”) required
to be filed by it or on its behalf, (B) has timely paid all Taxes required to be
paid by it for which payment was due (other than Taxes or other charges which
are being contested in good faith and are identified on Schedule 3.7(a)),
(C) has established an adequate accrual or reserve in the Company Balance Sheet
for the payment of all Taxes payable in respect of the periods or portions
thereof prior to the Balance Sheet Date, and will have established an adequate
accrual or reserve in the Closing Date Balance Sheet for the payment of all
Taxes payable in respect of the periods or portions thereof prior to the Closing
Date, (D) has made (or will make on a timely basis) all estimated Tax payments
required to be made, and (E) has no Liability for Taxes in excess of the amount
so paid or accruals or reserves so established.  All such Returns are true,
correct and complete in all material respects, and the Company has provided
Parent with true and correct copies of such Returns.

(ii)

The Company and each Subsidiary is not delinquent in the payment of any Tax or
in the filing of any Returns, and no deficiencies for any Tax have been
threatened, claimed, proposed or assessed against the Company or such
Subsidiary.  

(iii)

Neither the Company nor any Subsidiary has received any notification in writing
from the Internal Revenue Service (the “IRS”) or any other Taxing authority
regarding any material issues that (i) are currently pending before the Internal
Revenue Service or any other Taxing agency or authority (including any sales or
use Taxing authority) regarding the Company or such Subsidiary, or (ii) have
been raised by the IRS or other Taxing agency or authority and not yet finally
resolved.  No Return of the Company or any Subsidiary is under audit by the IRS
or any other Taxing agency or authority and any such past audits (if any) have
been completed and fully resolved to the satisfaction of the applicable taxing
agency or authority conducting such audit and all Taxes determined by such audit
to be due from the Company or such Subsidiary have been paid in full to the
applicable taxing agencies or authorities or adequate reserves therefore have
been established and are reflected in the Company Balance Sheet and will be
reflected in the Closing Date Balance Sheet.

(iv)

No Tax liens are currently in effect against any of the assets of the Company or
any Subsidiary other than liens that arise by operation of law for Taxes not yet
due and payable.  There is not in effect any waiver by the Company or any
Subsidiary of any statute of limitations with respect to any Taxes nor has the
Company or any Subsidiary agreed to any extension of time for filing any Return
that has not been filed.  Neither the Company nor any Subsidiary has consented
to extend to a date later than the Agreement Date the period in which any Tax
may be assessed or collected by any taxing agency or authority.

(v)

Neither the Company nor any Subsidiary will not be required to include in
income, or exclude any item of deduction from, Taxable income for any Taxable
period (or portion thereof) ending after the Closing Date as a result of any (i)
change in method of accounting for a Taxable period ending on or prior to the
Closing Date; (ii) “closing agreement” described in Section 7121 of the Code (or
any corresponding or similar provision of state, local, or foreign Tax law);
(iii) intercompany transactions or any excess loss account described in Treasury
Regulations under Section 1502 of the Code (or any corresponding or similar
provision of state, local, or foreign Tax law); (iv) installment sale or open
transaction disposition made on or prior to the Closing Date; or (v) prepaid
amount received or accrued on or prior to the Closing Date.

(vi)

No taxable income or liability for Taxes has been realized or incurred (or prior
to and including the Effective Time will be realized or incurred) since the
Balance Sheet Date other than in the ordinary course of business.

(vii)

The Company and each Subsidiary has properly and in a timely manner documented
their transfer pricing methodology in compliance with Section 482 (and any
related sections) of the Code, the Treasury regulations promulgated thereunder
and any comparable provisions of state, local, domestic or foreign Tax law.  The
Company and each Subsidiary has maintained and delivered to Parent any
documentation (including any applicable transfer pricing studies) in connection
with such related party transactions in accordance with Sections 482 and 6662 of
the Code and the Treasury Regulations promulgated thereunder and any comparable
provision of any other state, local, domestic or foreign Tax law.

(b)

Withholding.  The Company and each Subsidiary has complied with all Applicable
Law relating to the payment and withholding of Taxes (including withholding of
taxes pursuant to Sections 1441, 1442, 1445 and 1446 of the Code or similar
provisions under any foreign law), and has, within the time and in the manner
prescribed by Applicable Law, withheld from employee wages and paid over to the
proper taxing agencies and authorities all amounts required to be so withheld
and paid over under all Applicable Law (including Federal Insurance Contribution
Act, Medicare, Federal Unemployment Tax Act and relevant state income and
employment tax withholding laws), including federal and state income Taxes, and
has timely filed all withholding tax Returns.  

(c)

Special Tax Status and Indemnification Obligations.  

(i)

Neither the Company nor any Subsidiary is a party to or bound by any tax
sharing, tax indemnity, or tax allocation Contract nor does the Company or any
Subsidiary have any liability or potential liability to another party under any
such Contract.

(ii)

Neither the Company nor any Subsidiary has been a member of a consolidated,
combined, unitary or aggregate group of which the Company was not the ultimate
parent corporation. Neither the Company nor any Subsidiary has any liability for
the Taxes of any Person (other than the Company and such Subsidiary) under
Section 1.1502-6 of the Treasury Regulations (or any similar provision of state,
local or foreign law) as a transferee or successor, by contract or otherwise.  

(iii)

The Company has never filed any election under Section 341(f) of the Code.  The
Company is not a “personal holding company” within the meaning of the Code.  The
Company has never been a “United States real property holding corporation”
within the meaning of Section 897 of the Code, and the Company has filed with
the IRS all statements, if any, which are required under Section 1.897-2(h) of
the Treasury Regulations.  

(iv)

The Company has not 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.  

(d)

No Tax Shelters.  The Company has not filed any disclosures under Section 6662
of the Code or comparable provisions of state, local or foreign law to prevent
the imposition of penalties with respect to any Tax reporting position taken on
any Return.  The Company has not consummated, has not participated in, and is
not currently participating in any transaction which was or is a “tax shelter”
transaction as defined in Sections 6662, 6011, 6012 or 6111 of the Code or the
Treasury Regulations promulgated thereunder or a “reportable transaction”
required to be reported on IRS Form 8886.

(e)

Deductions; Attributes.  There is no Contract, plan or arrangement to which the
Company or any Subsidiary is a party, including but not limited to the
provisions of this Agreement and the Contracts entered into in connection with
this Agreement, covering any employee or former employee of the Company or any
Subsidiary that, individually or collectively, would be reasonably likely to
give rise to the payment of any amount that would not be deductible pursuant to
Sections 280G, 404 or 162(m) of the Code.

(f)

Nonqualified Deferred Compensation.  

(i)

No payment pursuant to any arrangement between the Company and any “service
provider” (as such term is defined in Section 409A of the Code and the United
States Treasury Regulations and IRS guidance thereunder), including, without
limitation, the grant, vesting or exercise of any stock option, would subject
any Person to a tax pursuant to Section 409A of the Code, whether pursuant to
the consummation of the transactions contemplated by this Agreement or
otherwise.

(ii)

All stock options issued by the Company have been appropriately authorized by
the Company’s Board of Directors or an appropriate committee thereof, including
approval of the option exercise price or the methodology for determining the
option exercise price and the substantive option terms. All Options granted to
employees in the United States that are potentially subject to Section 409A of
the Code have a per share exercise price which reflects the fair market value of
the Company’s Common Stock as determined in good faith compliance with Section
409A of the Code on the date that the option was granted (within the meaning of
United States Treasury Regulation §1.421-1(c)).

3.8

Company Financial Statements.  

(a)

Schedule 3.8(a) of the Company Disclosure Schedule includes the Company
Financial Statements.  The Company Financial Statements:  (a) are derived from
and are in accordance with the books and records of the Company in all material
respects; and (b) fairly present in all material respects the financial
condition of the Company at the dates therein indicated and the results of
operations and cash flows of the Company for the periods therein specified
(subject, in the case of unaudited interim period financial statements, to
normal recurring year-end adjustments, none of which individually or in the
aggregate will be material in amount).  The Company Financial Statements have
been prepared in all material respects in accordance with GAAP applied on a
basis substantially consistent with prior periods.  The reserves, if any,
reflected on the Company Financial Statements are adequate in light of the
contingencies with respect to which they were made.  The Company has no
Liabilities, except for those (a) shown on the Company Balance Sheet and (b)
that were incurred after the Balance Sheet Date in the ordinary course of the
Company Business consistent with its past practices.

(b)

Neither the Company, any of its Subsidiaries, nor to the Company’s Knowledge,
any current or former employee, consultant or director of the Company or any of
its Subsidiaries, has identified or been made aware of any fraud, whether or not
material, that involved the Company’s management or other current or former
employees, consultants or directors of the Company or any of its Subsidiaries
who have a role in the preparation of the financial statements or the internal
accounting controls utilized by the Company or its Subsidiaries, or any claim or
allegation regarding any of the foregoing.  Neither the Company nor any of its
Subsidiaries nor, to the Company’s Knowledge, any director, officer, employee,
auditor, accountant or representative of the Company or any of its Subsidiaries
has received or otherwise had or obtained Knowledge of any material complaint,
allegation, assertion or claim, whether written or oral, in each case, regarding
materially deficient accounting or auditing practices, procedures, methodologies
or methods of the Company or any of its Subsidiaries or their respective
internal accounting controls or any material inaccuracy in the Company’s
financial statements.  

(c)

Schedule 3.8(c) of the Company Disclosure Schedules sets forth all indebtedness
of the Company and its Subsidiaries for borrowed money (“Debt”), including, for
each item of Debt, the Contract governing the Debt and the interest rate,
maturity date and any assets or properties securing such Debt.   

(d)

Except as set forth on Schedule 3.8(d) of the Company Disclosure Schedule, the
Company and its Subsidiaries are not a party to, and do not have any commitment
to become a party to, any joint venture, off-balance sheet, partnership or any
similar Contract or arrangement (including any Contract or arrangement relating
to any transaction or relationship between or among the Company or its
Subsidiaries, on the one hand, and any Affiliate of the Company or its
Subsidiaries, including any structured finance, special purpose or limited
purpose entity or Person, on the other hand, and any “off-balance sheet
arrangements” (as that term is defined in Item 303(a) of Regulation S-K under
the Exchange Act )).

3.9

Title to Properties.  

Except for the tangible and intangible property covered under Section 3.13,
including, without limitation, the Intellectual Property, Software, Company
Products, and domain names (the “Section 3.13 Property”), the Company and each
Subsidiary, as the case may be, have title to all of their respective assets and
properties (including those shown on the Company Balance Sheet) free and clear
of all Encumbrances, other than Permitted Encumbrances.  Such assets are
sufficient for the continued operation of the Company Business.  All such
properties used in the operations of the Company Business are reflected on the
Company Balance Sheet in all material respects, to the extent required under
GAAP to be reflected thereon.  All machinery, vehicles, equipment and other
tangible personal property (other  than Section 3.13 Property) owned or leased
by the Company or any Subsidiary or used in the Company Business are in good
condition and repair, normal wear and tear excepted.  All leases or other
Contracts related to real or personal property to which the Company or any
Subsidiary is a party are fully effective and afford the Company or such
Subsidiary a valid leasehold possession of the real or personal property that is
the subject of the lease or other Contract.  Schedule 3.9 of the Company
Disclosure Schedule sets forth a complete and accurate list of (i) all personal
property (other than Section 3.13 Property) owned by the Company and each of its
Subsidiaries with an original purchase price of $50,000 or greater, and (ii)
each parcel of real property leased by the Company or any Subsidiary.  The
Company and its Subsidiaries have adequate ingress and egress into any real
property used in the operation of the Company Business.  A true and complete
copy of each written lease, sublease or other Contract under which the Company
and/or any Subsidiary uses or occupies or has the right to use or occupy, now or
in the future, any real property or facility has been made available to Parent,
and Schedule 3.9 sets forth a summary of the material terms of any lease or
Contract with respect to the use of real property which is not in written form.
 Except as set forth on Schedule 3.9 of the Company Disclosure Schedule, each
lease, sublease or other Contract under which the Company and/or any Subsidiary
uses or occupies or has the right to use or occupy, now or in the future, any
real property or facility is in written form.  Neither the Company nor any
Subsidiary owns any real property.

3.10

Absence of Certain Changes.  

Except as set forth on Schedule 3.10 of the Company Disclosure Schedule, since
the Balance Sheet Date, the Company has operated the Company Business in the
ordinary course consistent with its past practices, and since such date there
has not been with respect to the Company or any Subsidiary any:

(a)

Material Adverse Change or any change, event, circumstance, condition or effect
that would reasonably be expected to result in a Material Adverse Change;

(b)

amendment or change in its Certificate of Incorporation or Bylaws (or other
comparable charter documents);

(c)

incurrence, creation or assumption of (i) any Encumbrance on any of its assets
or properties (other than Permitted Encumbrances), (ii) any Liability for
borrowed money, or (iii) any Liability as a guarantor or surety with respect to
the obligations of others;

(d)

except as set forth in the Company’s Stock Option Plans, acceleration or release
of any right to repurchase shares of its capital stock upon a stockholder’s
termination of employment or services with it or pursuant to any right of first
refusal;

(e)

payment or discharge of any Encumbrance on any of its assets or properties, or
payment or discharge of any of its Liabilities, in each case that was not either
shown on the Company Balance Sheet or incurred in the ordinary course of the
Company Business consistent with its past practices after the Balance Sheet Date
in an amount not in excess of $10,000 for any single Liability to a particular
creditor;

(f)

purchase, license, sale, grant, assignment or other disposition or transfer, or
any Contract or other arrangement for the purchase, license, sale, assignment or
other disposition or transfer, of any of its assets (including Company
Intellectual Property (as defined in Section 3.13(b)) and other intangible
assets), properties or goodwill other than the sale or non-exclusive license of
its products or services to its customers in the ordinary course of the Company
Business consistent with its past practices;

(g)

material damage, destruction or loss of any material property or material asset,
whether or not covered by insurance;

(h)

declaration, setting aside or payment of any dividend on, or the making of any
other distribution in respect of, its capital stock, or any split, combination
or recapitalization of its capital stock or any direct or indirect redemption,
purchase or other acquisition of any of its capital stock or any change in any
rights, preferences, privileges or restrictions of any of its outstanding
securities;

(i)

change or increase in the compensation payable or to become payable to any of
its officers, directors or other employees with annual salary in excess of
$125,000 or in any bonus, pension, severance, retention, insurance or other
benefit payment or arrangement (including stock awards, stock option grants,
stock appreciation rights or stock option grants) made to or with any of such
officers, directors, or other employees with annual salary in excess of
$125,000;

(j)

change with respect to its management, supervisory or other key personnel, any
termination of employment of a material number of employees, or any labor
dispute or claim of unfair labor practices;

(k)

Liability incurred by it to any of its officers, directors or stockholders,
except for normal and customary compensation and expense allowances payable to
officers in the ordinary course of the Company Business consistent with its past
practices;

(l)

making by it of any loan, advance or capital contribution to, or any investment
in, any of its officers, directors or stockholders or any firm or business
enterprise in which any such person had a direct or indirect material interest
at the time of such loan, advance, capital contribution or investment;

(m)

entering into of a Material Contract, amendment of, relinquishment, termination
or nonrenewal by the Company of any Company Material Contract, other than in the
ordinary course of the Company Business consistent with its past practices, any
default by it under such Company Material Contract, or any written or, to the
Company’s Knowledge, oral indication or assertion by the other party thereto of
any material problems with its services or performance under such Company
Material Contract or such other party’s desire to so amend, relinquish,
terminate or not renew any such Company Material Contract;

(n)

material change in the Company’s product pricing (on an aggregate basis) or the
manner in which it extends discounts, credits or warranties to customers;

(o)

making or entering into any Contract with respect to any acquisition, sale or
transfer of any material asset of the Company;

(p)

any change in accounting methods or practices (including any change in
depreciation or amortization policies or rates or revenue recognition policies)
or any revaluation of any of its assets; or

(q)

announcement of, any negotiation of or any entry into any Contract to do any of
the things described in the preceding clauses (a) through (p) (other than
negotiations and agreements with Parent and its representatives regarding the
transactions contemplated by this Agreement).

3.11

Contracts, Agreements, Arrangements, Commitments and Undertakings

.  Schedules 3.11(a)-(p) of the Company Disclosure Schedule set forth a list of
each of the following Contracts to which the Company or any Subsidiary is a
party or to which the Company or any Subsidiary or any of their respective
assets or properties are bound:

(a)

any Contract providing for payments (whether fixed, contingent or otherwise) by
or to it in an aggregate amount of $25,000 or more per year;

(b)

any dealer, distributor, sales representative or similar Contract under which
any third party is authorized to sell, sublicense, lease, distribute, market or
take orders for any of its products or services and which has generated revenues
to the Company in an amount greater than $25,000 during the last fiscal year;

(c)

any joint venture or partnership Contract;

(d)

any joint marketing (including any pilot program) or development Contract;

(e)

any Contract pursuant to which the Company has granted or may be obligated to
grant in the future, to any Person, a computer source code license or option or
other right to use or acquire computer source code, including any Contracts
which provide for computer source code escrow arrangements;

(f)

any Contract for or relating to the employment by it of any director, officer,
employee or consultant or any other type of Contract with any of its officers,
employees or consultants that is not immediately terminable by it without cost
or other Liability, including any Contract requiring it to make a payment to any
director, officer, employee or consultant on account of the Merger, any
transaction contemplated by this Agreement or any Contract that is entered into
in connection with this Agreement;

(g)

any indenture, mortgage, trust deed, promissory note, loan agreement, security
agreement, guarantee or other Contract for or with respect to the borrowing of
money, a line of credit, any currency exchange, commodities or other hedging
arrangement, or a leasing transaction of a type required to be capitalized in
accordance with GAAP;

(h)

any Contract that restricts it from (i) engaging in any aspect of the Company
Business, (ii) participating or competing in any line of business, market or
geographic area, (iii) freely setting prices for its products, services or
technologies (including most favored customer pricing provisions), or (iv)
soliciting potential employees, consultants, contractors or other suppliers or
customers;

(i)

any Contract that grants any exclusive rights, rights of refusal, rights of
first negotiation or similar rights to any Person;

(j)

any Contract relating to the sale, issuance, grant, exercise, award, purchase,
repurchase or redemption of any shares of its capital stock or other securities
or any options, warrants or other rights to purchase or otherwise acquire any
such shares of capital stock, other securities or options, warrants or other
rights therefore;

(k)

any Contract with any labor union or any collective bargaining agreement or
similar Contract with its employees;

(l)

any Contract of guarantee, support, indemnification, assumption or endorsement
of, or any similar commitment with respect to, the obligations, liabilities
(whether accrued, absolute, contingent or otherwise) or indebtedness of any
other Person;

(m)

any Contract in which its officers, directors, employees or stockholders or any
member of their immediate families is directly or indirectly interested (whether
as a party or otherwise);

(n)

any Contract pursuant to which it has agreed to acquire a business or entity, or
substantially all of the assets of a business or entity, whether by way of
merger, consolidation, purchase of stock, purchase of assets, license or
otherwise;

(o)

any Contract providing for the lease or license of real property; or

(p)

any other Contract that is material to it or the Company Business, operations,
financial condition, properties, prospects or assets (including intangible
assets).

A true and complete copy of each Contract or document, including any amendments
thereto, required by these subsections (a)-(p) of this Section 3.11 to be listed
on Schedule 3.11 of the Company Disclosure Schedule has been delivered to
Parent.  All Company Material Contracts are in written form.

3.12

No Default; No Restrictions.

(a)

Each of the Company Material Contracts is in full force and effect.  There
exists no default or event of default or event, occurrence, condition or act,
with respect to the Company or any Subsidiary or, to the Knowledge of the
Company, with respect to any other contracting party, which, with the giving of
notice, the lapse of time or the happening of any other event or conditions,
would reasonably be expected to (i) become a default or event of default under
any Company Material Contract or (ii) give any third party (1) the right to
declare a default or exercise any remedy under any Company Material Contract,
(2) the right to a refund, credit or penalty payment under any Company Material
Contract, (3) the right to accelerate the maturity or performance of any
obligation of the Company or any Subsidiary under any Company Material Contract,
or (4) the right to cancel, terminate or materially modify any Company Material
Contract.  Neither the Company nor any Subsidiary has received any written, or,
to the Company’s Knowledge, oral notice or other communication regarding any
actual or possible violation or breach of or default under, or intention to
cancel or modify, any Company Material Contract.  

(b)

Neither the Company nor any Subsidiary is a party to, and no asset or property
of the Company or any Subsidiary is bound or affected by, any judgment,
injunction, order or decree, that restricts or prohibits the Company or any
Subsidiary or, following the Closing Date, will restrict or prohibit the
Surviving Entity or Parent, from freely engaging in the Company Business or from
competing anywhere in the world (including any judgments, injunctions, orders or
decrees, restricting the geographic area in which the Company or any Subsidiary
may sell, market, distribute or support any product or provide services or
restricting the markets, customers or industries that the Company or any
Subsidiary may address in operating the Company Business or restricting the
prices which the Company or any Subsidiary may charge for its products,
technology or services (including most favored customer pricing provisions)), or
includes any grants by the Company or any Subsidiary of exclusive rights or
licenses, rights of refusal, rights of first negotiation or similar rights.

3.13

Intellectual Property.

(a)

Rights to Intellectual Property.  The Company is the owner free and clear of any
Encumbrances of all right, title and interest in and to the all patents and
patent applications (including provisional applications and design patents and
applications and all patents and patent applications worldwide claiming priority
from such patents and patent applications) listed on Schedule 3.13(a) (the
“Company Patents”) as transferred to the Company by the inventors listed on the
Company Patents, and except as listed on Schedule_3.13(a) no third party has any
valid claim to the patents or of the subject matter claimed in the Company
Patents.  Except as set forth in Schedule 3.13(a) of the Disclosure Schedule
with respect to the Patent Claim, to the Company’s Knowledge, there is no
 material fact that would affect the Company’s ownership rights in the Company
Patents.  Each other item of Intellectual Property owned or Used by the Company
and necessary to carry out the Company Business (collectively with the Company
Patents referred to as the “Company Intellectual Property”),  is either:
(i) owned by the Company free and clear of any Encumbrances, or (ii) rightfully
Used by the Company pursuant to a valid and enforceable written license or other
grant of a right by a third party.  The Company has all rights in the Company
Intellectual Property that it doesn’t own necessary to carry out the Company
Business, including those rights necessary to Use the Company Intellectual
Property in the manner and in all geographic locations and fields of use in
which the Company currently conducts the Company Business.  

(b)

Registered Intellectual Property.  Schedule 3.13(b) lists all Registered
Intellectual Property owned or Used by the Company and necessary to carry out
the Company Business (the “Company Registered Intellectual Property”).

(i)

The individuals listed as inventors of the subject matter claimed in the Company
Patents included in the Company Registered Intellectual Property have assigned
all of their right, title and interests in such Company Patents to the Company.

(ii)

The Company is in compliance with all requirements of the United States and
foreign patent offices or applicable Governmental Authorities to maintain the
Company Patents and all other Company Registered Intellectual Property,
including payment of all required fees to such offices or agencies.  The Company
has no Knowledge of any prior art references or prior public uses, sales, offers
for sale or disclosures which could invalidate the Company Patents or any claim
thereof, or of any conduct the result of which could render the Company Patents
or any claim thereof invalid or unenforceable.    All Company Registered
Intellectual Property (other than applications that have not yet been granted or
registered) is valid and enforceable and not subject to any maintenance fees or
actions falling due within one hundred eighty (180) days after the Closing Date.

(c)

Third Party Intellectual Property.  Schedule 3.13(c) sets forth a correct and
complete list of all third party Software and other third party Intellectual
Property (collectively “Third Party Intellectual Property”) that is incorporated
into, embedded into or distributed with, installed with, or otherwise utilized
by any Company Products, or necessary to build, install or embed such Third
Party Intellectual Property into the Company Products,  indicating for each
whether such Third Party Intellectual Property has been modified by or on behalf
of the Company. All other Intellectual Property that is Used by the Company
pursuant to a license or other grant of a right by a third party is separately
identified as such in Schedule 3.13(c), except for generally commercially
available computer software, such as “off the shelf” or “shrink-wrap” software,
for a cost of not more than $5,000 for a perpetual license for a single user or
work station. Schedule 3.13(c) includes a brief description of any present or
future royalty or payment obligations for any Intellectual Property Used by the
Company.

(d)

Continuing Rights.  The Company is in material compliance with and has not
materially breached, violated or defaulted under, or received written notice,
nor does it have any reason to believe, that it has breached, violated or
defaulted under, any of the terms or conditions of any license, sublicense or
other Contract to which the Company is a party or is otherwise bound relating to
any of the Company Intellectual Property, nor does the Company have Knowledge of
any event or occurrence that could reasonably be expected to constitute such a
breach, violation or default (with or without the lapse of time, giving of
notice or both).  Each such Contract is in full force and effect, and the
Company and each Subsidiary is not in default thereunder, nor to the Company’s
Knowledge is any other party obligated to the Company pursuant to any such
Contract in default thereunder.  The transactions contemplated under this
Agreement will not alter or impair any rights of the Company in any Company
Intellectual Property. Except as listed on Schedule 3.13(d), the Surviving
Entity will be permitted to exercise all of the Company’s rights under such
licenses, sublicenses and other Contracts to the same extent the Company would
have been able to had the transactions contemplated by this Agreement not
occurred and the occurrence of the transactions contemplated by this Agreement
will not result in the payment of any additional amounts or consideration other
than fees, royalties or other payments which the Company would have been
required to pay had the transactions contemplated by this Agreement not
occurred.  Except as set forth on Schedule 3.13(c), the Company is not obligated
to provide any consideration (whether financial or otherwise) to any third
party, nor is any third party otherwise entitled to any consideration, with
respect to any exercise of rights by the Company or the Surviving Entity, as
successor to the Company, in the Company Intellectual Property.

(e)

No Infringement or Other Claims.  Except as set forth on Schedule 3.13(e), the
operation of the Company Business as it is currently conducted, including the
Company Products, does not infringe any third party’s Intellectual Property
rights or any author’s attribution and integrity rights.  Except as set forth on
Schedule 3.13(e), the Company has received no written claims asserting that such
current operation of the Company Business, or any Company Product, or Company
Intellectual Property, infringes any Intellectual Property right of any other
Person, nor, to the Company’s Knowledge, are any such claims threatened by any
Person nor, to the Company’s Knowledge, does there exist any valid basis for
such a claim.  No funds or facilities of any Governmental Authority, college or
university were used in the development of Company Intellectual Property.
 Except as set forth on Schedule 3.13(e), the Company does not have Knowledge of
any (i) legal or governmental proceedings, including interference,
re-examination, reissue, opposition, nullity, or cancellation proceedings
pending regarding any of the Company Intellectual Property, other than review of
pending applications, or (ii) any written information indicating that such
proceedings are threatened or contemplated by any Governmental Authority or any
other Person.

(f)

Protection of Intellectual Property.  The Company and its Subsidiaries have
taken commercially reasonable measures to protect the proprietary nature of the
Company Intellectual Property and to maintain in confidence all trade secrets
and confidential information owned or used by the Company and its Subsidiaries.
 The Company has secured from all parties (including Employees) who have created
any portion of, or otherwise have any rights in or to, the Company Intellectual
Property owned by the Company valid and enforceable written assignments of any
such work, invention, improvement or other rights to the Company and has
provided true and complete copies of such assignments to Parent.  Each of the
Company Products or products under development by the Company is (i) owned by
the Company by virtue of having been developed by employees and/or independent
contractors of the Company or its Subsidiary working individually or jointly,
and in either event all such employees and/or independent contractors have
irrevocably assigned all of their rights (without limitation or reservation) to
the Company or its Subsidiary pursuant to enforceable written Contracts and have
irrevocably waived in writing in favor of the Company or its Subsidiary any
attribution or integrity rights of authors in relation thereto, or (ii) owned by
the Company by virtue of having been acquired from a third party pursuant to a
valid and binding agreement.  Each of the Company Products is sold or offered by
the Company pursuant to a license or other agreement from one of more of the
third parties listed in Schedule 3.13(f).  Except as set forth in Schedule
3.13(f), without limiting the foregoing, the Company and its Subsidiaries have
enforced a policy of requiring each employee and each consultant or contractor
to execute proprietary information and confidentiality agreements  materially
and substantially consistent with the Company’s and its Subsidiaries’ standard
forms thereof (complete and current copies of which have been delivered or made
available to the Parent).  Except under valid and binding confidentiality
obligations that comply with the immediately preceding sentence, the Company if
not aware that there has been any material disclosure of any material
confidential information or trade secrets used in connection with the Company
Business.

(g)

No Unauthorized Use by Others.  To the Company’s Knowledge, there is no material
unauthorized Use, infringement, or misappropriation of any Company Intellectual
Property by any third party or employee of the Company.

(h)

Licensing to Others.  Schedule 3.13(h) lists (i) the Company’s standard form of
agreements that grant licenses to customers and other third parties, (ii) any
agreements with customers or other third parties that materially deviate from
such form agreements, and (iii) all other licenses, sublicenses and other
Contracts pursuant to which any Person is authorized to Use any of the Company
Intellectual Property.  Except as set forth in Schedule 3.13(h), the Company has
not distributed or made available to any third party (including without
limitation to escrow agents) the source code for the Company Products or
products under development by the Company, and no third party has any right,
title of interest in any such source code.

(i)

No Malicious Software.  No Company Product contains any computer code designed
to improperly disrupt, disable or harm in any manner the operation of any
software or hardware.  None of the Company’s Products contains any worm, bomb,
backdoor, clock, timer or other disabling device, code, design or routine which
improperly causes the software or any portion thereof to be erased, inoperable
or otherwise incapable of being used, either automatically, with the passage of
time or upon command by any party.  The Company has a policy and procedure for
tracking material bugs, errors and defects of which it becomes aware in any
Company Products, and maintains a database covering the foregoing.  For all
Software currently used by the Company in providing Company Products, or in
developing or making available any of the Company Products, the Company has, to
the extent commercially appropriate, implemented any and all material security
patches or material security upgrades that to the Company’s Knowledge are
generally available for that Software.  The term “material security patches or
material security upgrades” means, for purposes of the foregoing sentence,
security patches and security upgrades the implementation of which other
companies developing and marketing software products similar to the Company’s
Products would reasonably consider prudent.

(j)

Open-Source Software.  Except as set forth on Schedule 3.13(j), no Publicly
Available Software has been embedded in, distributed with or used in the
development of any Company Product.  Except as set forth on Schedule 3.13(j),
the Company has not used Publicly Available Software in whole or in part in the
former or current development of any Company Product, nor licensed or
distributed to any Person any combination of Publicly Available Software and
Company Product, in a manner that may (i) require, or condition the use,
modification or distribution of any Company Product on the disclosure, licensing
or distribution of any source code for any portion of such Company Product, (ii)
require any Company Intellectual Property to be distributed or made available at
no or minimal charge or (iii) otherwise impose any material limitation,
restriction or condition on the right or ability of the Company to use or
distribute any Company Product in any manner.

(k)

No Transfer of Ownership.  The Company has not transferred ownership of, or
granted any exclusive license with respect to, any Company Intellectual Property
or any Company Product or any product under development by the Company to any
Person.  Except as set forth on Schedule 3.13(k), none of the Company’s
professional services Contracts with its customers, Contracts with merchants,
Contracts with outside consultants for the performance of professional services
on the behalf of the Company or any of its customers, nor any Contract or
license with any end user or reseller of the Company’s products, confers upon
any Person other than the Company the ownership of any Intellectual Property
developed in connection with such Contract or license.

(l)

Participation in Standards Setting.  The Company has not participated in any
standards setting activities or joined any standards setting organizations that
would affect the proprietary nature of the Company Intellectual Property or
restrict the ability of the Company to enforce, license, or exclude others from
using the Company Intellectual Property.

(m)

Intellectual Property Indemnification Provisions.  The Company has never agreed
in writing to indemnify any Person for or against any interference,
infringement, misappropriation, or other conflict with respect to any of the
Company Intellectual Property or any Intellectual Property that was formerly
Company Intellectual Property, except for indemnities contained in those Company
Contracts listed in Schedule 3.13(h).

(n)

Domain Names. Schedule 3.13(n) sets forth all domain names used in the conduct
of the Company Business and the current registrars of each of those domain
names.  Neither the Company nor its Subsidiaries are in default of any
requirement or obligation the compliance or performance of which is necessary
for the Company or a Subsidiary’s right to continue using such domain name.  To
the knowledge of the Company, the registration of each such domain name is free
and clear of all Encumbrances and is in full force and effect and the Company
and its Subsidiaries are in full compliance with all applicable domain name
registration requirements.  The Company and its Subsidiaries have paid all fees
and have adhered to and complied with all administrative policies required to
maintain each registration.  To the knowledge of the Company, neither the
Company’s, nor its Subsidiaries’ registrations or uses of the domain names have
been disturbed or placed “on hold.” Neither the Company, nor its Subsidiaries
have received written notice of any claim asserted against the Company or its
Subsidiary adverse to its rights to such domain names.

3.14

Compliance with Laws.

(a)

The Company and each Subsidiary has complied in all material respects, and is
now in material compliance, with all Applicable Law.

(b)

The Company and each Subsidiary hold all material permits, licenses and
approvals from, and has made all material filings with, Governmental
Authorities, that are necessary and/or legally required to be held by it to
conduct the Company Business without any violation of Applicable Law (“Company
Governmental Permits”) and all such Company Governmental Permits are valid and
in full force and effect.   The Company has not received, and has no Knowledge
of, any notice or other communication from any Governmental Authority regarding
(i) any actual or possible violation of law or any Company Governmental Permit
or any failure to comply with any term or requirement of any Governmental Permit
or (ii) any actual or possible revocation, withdrawal, suspension, cancellation,
termination or modification of any Company Governmental Permit.  

(c)

Neither the Company nor to the Company’s Knowledge, any director, officer, agent
or employee of the Company or any Subsidiary has, for or on behalf of the
Company or any Subsidiary, (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iii)
made any other payment in violation of Applicable Law.

3.15

Certain Transactions and Agreements

.  To the Knowledge of the Company, none of the officers and directors of the
Company, and no stockholder of the Company owning more than 1% of any class of
Company Capital Stock, nor any immediate family member of an officer or
 director of the Company, has a direct ownership interest of more than 2% of the
equity ownership of any firm or corporation that competes with, or does business
with, or has a Contract or any other contractual arrangement with, the Company.
 None of said officers, directors, stockholders or of immediate family members,
is a party to, or otherwise directly or indirectly interested in any Company
Material Contract.

3.16

Employees, ERISA and Other Compliance.

(a)

The Company is in compliance in all material respects with all Applicable Law
and Contracts relating to employment, employment practices, immigration, wages,
hours, and terms and conditions of employment, including employee compensation
matters, and has correctly classified employees as exempt employees and
nonexempt employees under the Fair Labor Standards Act.  A complete list of all
corporate employees, officers and consultants of the Company and their current
title and/or job description and compensation (base compensation and bonuses) is
set forth on Schedule 3.16(a) of the Company Disclosure Schedule.  To the
Knowledge of the Company, all employees of the Company are legally permitted to
be employed by the Company in the jurisdiction in which such employee is
employed in their current job capacities for the maximum period allowed under
Applicable Law.  All consultants performing work for the Company or any
Subsidiary have been properly classified as independent contractors for purposes
of federal and applicable state Tax laws, laws applicable to employee benefits
and other Applicable Law.  The Company does not have any employment or
consulting Contracts currently in effect that are not terminable at will (other
than agreements with the sole purpose of providing for the confidentiality of
proprietary information or assignment of inventions or for providing for the
noncompetition covenant of the employee or consultant party thereto).

(b)

The Company is not now, nor has ever been, subject to a union organizing effort.
 The Company is not subject to any collective bargaining agreement with respect
to any of its employees, subject to any other Contract with any trade or labor
union, employees’ association or similar organization, and subject to any
current labor disputes.  To the Company’s Knowledge, no employee intends to
terminate his or her employment with the Company.

(c)

The Company has no pension plan which constitutes, or has since the enactment of
ERISA, constituted, a “multiemployer plan” as defined in Section 3(37) of ERISA
or a “multiple employer plan” as defined in Section 413(c) of the Code.  No
pension plan of the Company is subject to Title IV of ERISA.

(d)

Schedule 3.16(d) of the Company Disclosure Schedule lists each employment,
consulting, severance or other similar Contract, each “employee benefit plan” as
defined in Section 3(3) of ERISA and each plan or arrangement (written or oral)
providing for insurance coverage (including any self-insured arrangements that
are clearly identified as such), workers’ benefits, vacation benefits, severance
benefits, disability benefits, death benefits, hospitalization benefits,
retirement benefits, deferred compensation, profit-sharing, bonuses, stock
options, stock purchase, phantom stock, stock appreciation or other forms of
incentive compensation or post-retirement insurance, compensation or benefits
for employees, consultants or directors that is entered into, maintained or
contributed to by the Company or any ERISA Affiliate and covers any employee or
former employee of the Company.  Such Contracts, plans and arrangements as are
described in this Section 3.16(d) are hereinafter collectively referred to as
“Company Benefit Arrangements.”  

(e)

Each Company Benefit Arrangement has been maintained in compliance in all
material respects with its terms and with the requirements prescribed by any and
all Applicable Law that is applicable to such Company Benefit Arrangement.  No
such Company Benefit Arrangement is an “employee pension benefit plan” as
defined in Section 3(2) of ERISA that is intended to qualify under Section
401(a) of the Code.  No Company Benefit Arrangement shall be subject to any
surrender fees or services fees upon termination other than the normal and
reasonable administrative fees associated with the termination of benefit plans.

(f)

The Company has timely filed and delivered or made available to Parent the three
most recent annual reports (Form 5500) and all schedules attached thereto for
each Company Benefit Arrangement that is subject to ERISA and Code reporting
requirements, and all material communications with participants, the IRS, the
U.S. Department of Labor (“DOL”), or any other Governmental Authority,
administrators, trustees, beneficiaries and alternate payees relating to any
Company Benefit Arrangement.

(g)

No suit, administrative proceeding, action or other litigation has been brought,
or to the Knowledge of the Company is threatened against or with respect to any
Company Benefit Arrangement (other than claims for benefits under such Company
Benefit Arrangement which are routine and uncontested), including any audit or
inquiry by the IRS or the DOL.  The Company has never been a participant in any
“prohibited transaction” within the meaning of Section 406 of ERISA or Section
4975 of the Code with respect to any employee pension benefit plan (as defined
in Section 3(2) of ERISA) that the Company sponsors as employer or in which the
Company participates as an employer which was not otherwise exempt pursuant to
Section 408 of ERISA (including any individual exemption granted under Section
408(a) of ERISA) or that would be reasonably likely to result in an excise tax
under the Code or the assessment of a civil penalty under Section 502(i) or
ERISA.

(h)

All contributions due from the Company with respect to any of the Company
Benefit Arrangements have been made or have been accrued on the Company’s
financial statements (including the Company Financial Statements), and no
further contributions shall be due or shall have accrued thereunder as of the
Closing Date (other than contributions accrued in the ordinary course of
business, consistent with past practices, after the Balance Sheet Date as a
result of the operations of the Company after the Balance Sheet Date).  The
Company does not maintain, nor has it ever maintained, any Company Benefit
Arrangement qualified under Section 401(a) of the Code.  All claims as of the
Closing Date made under any self-insured Company Benefit Arrangement that is an
“employee welfare benefit plan” as defined in Section 3(1) of ERISA have been
paid or, if not paid, will be paid by the Company.

(i)

All individuals who, pursuant to the terms of any Company Benefit Arrangement,
are entitled to participate in any Company Benefit Arrangement, are currently
participating in such Company Benefit Arrangement or have been offered an
opportunity to do so and have declined in writing.

(j)

The Company shall not have any material Liability to any employee or to any
organization or any other entity as a result of the termination of any employee
leasing arrangement.

(k)

There has been no amendment to, written interpretation or announcement (whether
or not written) by the Company relating to, or change in employee participation
or coverage under, any Company Benefit Arrangement that would increase
materially the expense of maintaining such Company Benefit Arrangement above the
level of the expense incurred in respect thereof during the Company’s fiscal
year ending June 30, 2007, except any such amendments that are required under
Applicable Law.

(l)

Each Company Benefit Arrangement, to the extent applicable, is in compliance, in
all material respects, with the continuation coverage requirements of
Section 4980B of the Code, Sections 601 through 608 of ERISA, the Americans with
Disabilities Act of 1990, as amended, and the regulations thereunder, the Health
Insurance Portability and Accountability Act of 1996, as amended, the Women’s
Health and Cancer Rights Act of 1998, and the Family Medical Leave Act of 1993,
as amended, and the regulations thereunder, as such requirements affect the
Company and its employees.  There are no outstanding, uncorrected violations
under the Consolidation Omnibus Budget Reconciliation Act of 1985, as amended,
(“COBRA”), with respect to any of the Company Benefit Arrangements, covered
employees or qualified beneficiaries that would be reasonably likely to result
in a Material Adverse Effect on the Company or Parent .

(m)

No benefit payable or that may become payable by the Company pursuant to any
Company Benefit Arrangement or as a result of, in connection with or arising
under this Agreement or the Articles of Merger shall constitute a “parachute
payment” (as defined in Section 280G(b)(2) of the Code) that is subject to the
imposition of an excise tax under Section 4999 of the Code or that would not be
deductible by reason of Section 280G of the Code.  Unless otherwise indicated in
Schedule 3.16(m) of the Company Disclosure Schedule or as provided in the
Company’s stock option plans, the Company is not a party to any:  (i) Contract
with any executive officer or other key employee thereof (A) the benefits of
which are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving the Company in the nature of the Merger or
any of the other transactions contemplated by this Agreement or any Company
Ancillary Agreement, (B) providing any term of employment or compensation
guarantee, or (C) providing severance benefits or other benefits after the
termination of employment of such employee regardless of the reason for such
termination of employment other than as required by COBRA (or similar state
laws), vacation pay cash-outs or other arrangements governed by ERISA; or (ii)
Contract or plan, including any stock option plan, stock appreciation rights
plan or stock purchase plan, any of the benefits of which shall be increased, or
the vesting of benefits of which shall be accelerated, by the occurrence of the
Merger or any of the other transactions contemplated by this Agreement, or any
event subsequent to the Merger such as the termination of employment of any
person, or the value of any of the benefits of which shall be calculated on the
basis of any of the transactions contemplated by this Agreement.  The Company
has no obligation to pay any material amount or provide any material benefit to
any former employee or officer, other than obligations (i) for which the Company
has established a reserve for such amount on the Company Balance Sheet and (ii)
pursuant to Contracts entered into after the Balance Sheet Date and disclosed on
Schedule 3.16(m) of the Company Disclosure Schedule.

(n)

To the Company’s Knowledge, no employee or consultant of the Company is in
material violation of (i) any term of any employment or consulting Contract or
(ii) any term of any other Contract or any restrictive covenant relating to the
right of any such employee or consultant to be employed by the Company or to use
trade secrets or proprietary information of others.  To the Company’s Knowledge,
the employment of any employee or consultant by the Company does not subject it
to any Liability to any third party other than Liabilities with respect to
employer payroll tax and employee tax withholding.

(o)

The Company has not established any compensation and benefit plan that is
maintained or is required to be maintained or contributed to by the law or
applicable custom or rule of the relevant jurisdiction, outside of the United
States.

(p)

In the past two years, there has been no “mass layoff,” “employment loss,” or
“plant closing” as defined by the Workers Adjustment and Retraining Notification
Act (the “WARN Act”) in respect of the Company.  

3.17

Corporate Documents

.  The Company has delivered or made available to Parent the following
documents:  (a) copies of the Certificate of Incorporation and Bylaws (or other
comparable charter documents), each as currently in effect, of the Company; (b)
the minute books containing all records of all proceedings, consents, actions
and meetings of the Board of Directors and any committees thereof and
stockholders of the Company; (c) the stock ledger and option ledger and journal
reflecting all stock issuances and transfers and all grants of options relating
to the Company; and (d) all permits, orders and consents issued by, and filings
by the Company with, any regulatory agency with respect to the Company, or any
securities of the Company, and all applications for such permits, orders and
consents.

3.18

Merger Expenses

.  Neither the Company nor any affiliate of the Company is obligated for the
payment of any fees or expenses of any investment banker, broker, finder or
similar party in connection with the origin, negotiation or execution of this
Agreement or in connection with the Merger or any other transaction contemplated
by this Agreement other than as set forth on Schedule 3.18 to the Company
Disclosure Schedule. The legal and accounting advisors, and any other persons,
to whom the Company currently expects to owe fees and expenses that will
constitute Company Merger Expenses are set forth on Schedule 3.18.

3.19

Books and Records.

(a)

The books, records and accounts of the Company (i) are in all material respects
true, complete and correct, (ii) have been maintained in all material respects
in accordance with good business practices on a basis consistent with prior
years, and (iii) accurately and fairly reflect in all material respects the
basis for the Company Financial Statements.

(b)

The Company has devised and maintains a system of internal accounting controls
sufficient to provide reasonable assurances that:  (i) transactions are executed
in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary (1) to permit preparation of financial
statements and (2) to maintain accountability for assets; and (iii) the amount
recorded for assets on the Company’s books and records is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

3.20

Insurance.  

The Company maintains the policies of insurance and bonds set forth in Schedule
3.20 of the Company Disclosure Schedule, including all legally required workers’
compensation and other insurance.  Schedule 3.20 sets forth the name of the
insurer under each such policy and bond, the type of policy or bond, and the
coverage amount and any applicable deductible.  There is no material claim
pending under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.
 All premiums due and payable under all such policies and bonds have been timely
paid, and the Company is otherwise in material compliance with the terms of such
policies and bonds.  All such policies and bonds remain in full force and effect
and to the Knowledge of the Company insure against risks and liabilities to an
extent and in a manner customary in the industries in which the Company and its
Subsidiaries operate.  The Company has no Knowledge of any threatened
termination of, or material premium increase with respect to, any of such
policies or bonds.  The Company has delivered or made available to Parent
correct and complete copies of all such policies of insurance and bonds issued
at the request or for the benefit of the Company.

3.21

Environmental Matters.

(a)

The Company, its Subsidiaries and their respective predecessors and affiliates
are in material compliance with all Environmental Laws (as defined below), which
compliance includes the possession by the Company of all material permits and
other governmental authorizations required under Environmental Laws and
compliance with the terms and conditions thereof.  The Company and its
Subsidiaries have not received any written notice or other written
communication, whether from a Governmental Authority, citizens groups, employee
or otherwise, that alleges that the Company or any Subsidiary are not in
compliance with any Environmental Law, and to the Knowledge of the Company,
there are no circumstances that may prevent or interfere with the material
compliance by the Company or any Subsidiary with any current Environmental Law
in the future.  To the Knowledge of the Company, no current or prior owner of
any property leased or possessed by the Company or any Subsidiary has received
any written notice or other written communication, whether from a Governmental
Authority, citizens group, employee or otherwise, that alleges that such current
or prior owner, the Company, or any Subsidiary is not in compliance with any
Environmental Law.  All Company Governmental Permits pursuant to any
Environmental Law (if any) are identified in Schedule 3.21 of the Company
Disclosure Schedule.

(b)

For purposes of this Section 3.21:  (i) “Environmental Law” means any federal,
state or local statute, law, regulation or other legal requirement relating to
pollution or protection of human health or the environment (including ambient
air, surface water, ground water, land surface or subsurface strata), including
any law or regulation relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern; and (ii) “Materials
of Environmental Concern” include chemicals, pollutants, contaminants, wastes,
toxic substances, petroleum and petroleum products and any other substance that
is currently regulated by an Environmental Law or that is otherwise a danger to
health, reproduction or the environment.

3.22

No Existing Discussions

.  Neither the Company nor, to the Knowledge of the Company, any director,
officer, stockholder, employee or agent (or any investment banker, broker,
finder or similar party) of the Company is engaged, directly or indirectly, in
any discussions or negotiations with any third party relating to any Alternative
Transaction.

3.23

Customers and Suppliers.

(a)

The Company has not received any written notice of any material disputes
concerning its products and/or services with any customer or distributor and the
Company has no Knowledge of any other material disputes concerning its products
and/or services with any customer or distributor.  Since the Balance Sheet Date,
the Company has not received any written or, to the Company’s Knowledge, oral
notice from any customer that such customer shall not continue as a customer of
the Company or that such customer intends to terminate or materially modify
existing Contracts with the Company (or the Surviving Entity or Parent) or that
such customer refuses to make payments for products delivered or services
rendered.  Since the Balance Sheet Date, the Company has not had any of its
products returned except for normal warranty returns consistent with past
history and those returns that would not result in a reversal of any material
amount of revenue by the Company.

(b)

The Company has not received any written notice of any material disputes
concerning products and/or services provided by any supplier and the Company has
no Knowledge of any other material disputes concerning products and/or services
provided by any supplier.  Each supplier to whom, in the year ended June 30,
2007, the Company paid (or accrued an obligation to pay) $50,000 or more,
together with the amounts paid or payable by the Company to such supplier during
the year ended June 30, 2007, as well as any sole-source supplier (identified as
such), is listed on Schedule 3.23(b).  Since the Balance Sheet Date, the Company
has not received any written notice from any supplier that such supplier shall
not continue as a supplier to the Company or that such supplier intends to
terminate or materially modify existing Contracts with the Company (or the
Surviving Entity or Parent).  The Company has access, on commercially reasonable
terms, to all products and services reasonably necessary to carry on the Company
Businesses, and the Company has no Knowledge of any reason why it will not
continue to have such access on commercially reasonable terms.

(c)

Schedule 3.23(c) lists each Contract pursuant to which the Company is obligated
to provide support, development, implementation or other similar professional
 services (the “Support Agreements”) that are materially different from the form
of the agreement identified as the Standard Support Agreement delivered or made
available to the Parent by the Company (the “Standard Support Agreement”).  The
Company is not obligated to provide to any Person any development, training or
other professional services that do not constitute ordinary support obligations
pursuant to the terms of the Standard Support Agreement.  

3.24

Products Liability and Warranty Liability

.   The Company has made available a description of all product warranty claims
with respect to products of the Company and its Subsidiaries during the year
immediately preceding the date hereof.  The Company has previously delivered or
made available to the Parent a correct and complete copy of each express
warranty relating to any product of the Company or its Subsidiaries.

3.25

Accounts Receivable

.  Schedule 3.25 of the Company Disclosure Schedule sets forth an accurate and
complete aging of the Company’s accounts receivable as of August 31, 2007 in the
aggregate and by customer.  All accounts receivable reflected on Schedule 3.25
have either been collected in full prior to the Agreement Date or are
collectible in full following the Agreement Date in the ordinary course of the
Company Business.

3.26

Disclosure

.  To the Company’s Knowledge, neither this Agreement (including its exhibits
and schedules and the Company Disclosure Schedule) nor the Company Ancillary
Agreements contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements contained herein and
therein, in light of the circumstances under which such statements were made,
not misleading.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT

Parent represents and warrants to the Company as follows:

4.1

Organization and Good Standing.  

Parent is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power and
authority to own, operate and lease its properties and to carry on its business
as now conducted and as presently proposed to be conducted.  Interim Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.  Quintum Sub is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each of Parent, Interim Sub and Quintum Sub is duly qualified or
licensed to do business, and is in good standing, in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed would not individually or in the
aggregate be material to Parent ‘s, Interim Sub’s or Quintum Sub’s ability to
consummate the Merger or to perform their respective obligations under this
Agreement, the Parent Ancillary Agreements and the Merger Sub Ancillary
Agreements.  Parent has made available to the Company true and complete copies
of the currently effective Certificate of Incorporation  and Bylaws of Parent,
Interim Sub and Quintum Sub, each as amended to date.   Each of Parent, Interim
Sub, and Quintum Sub are not in violation of its respective Certificate of
Incorporation  or Bylaws, each as amended to date.

4.2

Power, Authorization and Validity.

(a)

Power and Authority.  Parent has all requisite corporate power and authority to
enter into, execute, deliver and perform its obligations under this Agreement
and each of the Parent Ancillary Agreements and to consummate the Merger.  The
execution, delivery and performance by Parent of this Agreement, each of the
Parent Ancillary Agreements and all other Contracts, transactions and actions
contemplated hereby or thereby have been duly and validly approved and
authorized by all necessary corporate action on the part of Parent.  Each of
Interim Sub and Quintum Sub has all requisite corporate power and authority to
enter into, execute, deliver and perform its obligations under this Agreement
and each of the Merger Sub Ancillary Agreements and to consummate the Merger.
 The execution, delivery and performance by Interim Sub and Quintum Sub of this
Agreement, each of the Merger Sub Ancillary Agreements and all other Contracts,
transactions and actions contemplated hereby or thereby have been duly and
validly approved and authorized by all necessary corporate or other action on
the part of Interim Sub and Quintum Sub.

(b)

No Consents.  No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Authority, or any other Person,
governmental or otherwise, is necessary or required to be made or obtained by
Parent, Interim Sub or Quintum Sub to enable Parent, Interim Sub and Quintum Sub
to lawfully execute and deliver, enter into, and perform its obligations under
this Agreement, each of the Parent Ancillary Agreements and each of the Merger
Sub Ancillary Agreements or to consummate the Merger, except for:  (i)  the
filing of the Certificates of Merger with the Office of the Secretary of State
of the State of Delaware; (ii) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
federal and state securities laws and the laws of any foreign country; and (iii)
such other consents, authorizations, filings, approvals, notices and
registrations which, if not obtained or made, would not be material to the
Company or Parent and would not prevent, materially alter or delay any of the
transactions contemplated by this Agreement.

(c)

Enforceability.  This Agreement has been duly executed and delivered by Parent,
Interim Sub and Quintum Sub.  This Agreement and each of the Parent Ancillary
Agreements are, or when executed by Parent shall be, valid and binding
obligations of Parent , enforceable against Parent in accordance with their
respective terms, subject to the effect of (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to rights of creditors generally and (ii) rules of law and
equity governing specific performance, injunctive relief and other equitable
remedies.  This Agreement and each of the Merger Sub Ancillary Agreements are,
or when executed by Interim Sub and Quintum Sub shall be, valid and binding
obligations of Interim Sub and Quintum Sub, respectively, enforceable against
Interim Sub and Quintum Sub in accordance with their respective terms, subject
to the effect of (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to rights
of creditors generally and (ii) rules of law and equity governing specific
performance, injunctive relief and other equitable remedies.

4.3

No Conflict

.  Neither the execution and delivery of this Agreement, any of the Parent
Ancillary Agreements or any of the Merger Sub Ancillary Agreements by Parent,
Interim Sub or Quintum Sub, nor the consummation of the Merger or any other
transaction contemplated hereby or thereby, shall conflict with, or (with or
without notice or lapse of time, or both) result in a termination, breach,
impairment or violation of, or constitute a default under:  (a) any provision of
the Certificate of Incorporation or Certificate of Formation, as applicable, or
Bylaws or Operating Agreement, as applicable of Parent, Interim Sub or Quintum
Sub, each as currently in effect; (b) any Applicable Law applicable to Parent ,
Interim Sub, or Quintum Sub or any of their respective material assets or
properties; or (c) any Contract to which Parent, Interim Sub or Quintum Sub is a
party or by which Parent, Interim Sub or Quintum Sub or any of their respective
material assets or properties are bound, except in the cases of clauses (b) and
(c) where such conflict, termination, breach, impairment, violation or default
would not be material to Parent’s, Interim Sub’s or Quintum Sub’s ability to
consummate the Merger or to perform their respective obligations under this
Agreement, the Parent Ancillary Agreements and the Merger Sub Ancillary
Agreements.

4.4

Interim Operations of Interim Sub and Quintum Sub

.  Interim Sub and Quintum Sub were formed by Parent solely for the purpose of
engaging in the transactions contemplated by this Agreement, have engaged in no
other business activities and have conducted its operations only as contemplated
by this Agreement.  Interim Sub and Quintum Sub have no liabilities and, except
for a subscription agreement pursuant to which all of its authorized capital
stock was issued to Parent , are not a party to any Contract other than this
Agreement and agreements with respect to the appointment of registered agents
and similar matters.

4.5

Stockholders Consent

.  No consent or approval of the stockholders of Parent is required or necessary
for Parent to enter into this Agreement or to consummate the transactions
contemplated hereby.

4.6

Valid Issuance of Parent Common Stock.  

The shares of Parent Common Stock to be issued pursuant to the terms of this
Agreement will be duly authorized, validly issued, fully paid, and
non-assessable and will not be subject to any preemptive rights.

4.7

SEC Filing; Financial Statements.

(a)

Parent has filed with the SEC and made available to the Company or its
representatives all forms, prospectuses, registration statements, reports and
documents required to be filed by Parent with the SEC since January 1, 2005
(collectively, the “Parent SEC Reports”).  The Parent SEC Reports (i) at the
time filed, complied in all material respects with the applicable requirements
of the Securities Act and the Exchange Act, as the case may be, 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 in such Parent SEC Reports or necessary in order to make the statement in
such Parent SEC Reports, in the light of the circumstances under which they were
made, not misleading.

(b)

Each of the financial statements (including, in each case, any related notes)
contained in the Parent SEC Reports, including any Parent SEC Reports filed
after the date of this Agreement until the Closing, complied or will comply as
to form in all material respects with the applicable published rules and
regulations of the SEC with respect thereto, was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statement or, in the case or
unaudited statements, as permitted by Form 10-Q of the SEC) and fairly
represented the consolidated financial position of Parent and its subsidiaries
as at the respective dates and the consolidated results of operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments.

(c)

Each Parent SEC Report that is a registration statement, as amended or
supplemented, if applicable, filed pursuant to the Securities Act, as of the
date such registration statement or amendment became effective, did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.

(d)

Parent has filed with the New York Stock Exchange (the “NYSE”) all documents
required to be filed by Parent with the NYSE since January 1, 2005, and all such
documents, at the time filed, complied in all material respects with the
applicable requirements of the NYSE.  The Parent has not received any notice
from the NYSE that it is not in compliance with the rules of the NYSE.

(e)

Parent has not received any correspondence (written or oral) from the SEC or
other applicable Governmental Authority questioning the effectiveness of its
disclosure controls and procedures.

4.8

Disclosure

.  To the Parent’s Knowledge, this Agreement (including its exhibits and
schedules) does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements contained
herein and therein, in light of the circumstances under which such statements
were made, not misleading.

4.9

Sufficient Funds

.  Parent has, or will have available to it at the First Effective Time,
sufficient funds to complete the Merger.

4.10

Compliance with Laws; Taxes; Litigation

.  To the Parent’s knowledge, except as would not result in a Material Adverse
Effect on the Parent:

(a)

The Parent has complied in all material respects, and is now in material
compliance, with all Applicable Law.  The Parent holds all material permits,
licenses and approvals from, and has made all material filings with,
Governmental Authorities, that are necessary and/or legally required to be held
by it to conduct its business without any violation of Applicable Law (the
“Parent Governmental Permits” and all such Parent Governmental Permits are valid
and in full force and effect.   The Parent has not received, and has no
Knowledge of, any notice or other communication from any Governmental Authority
regarding (i) any actual or possible violation of law or any such Parent
Governmental Permit or any failure to comply with any term or requirement of any
Parent Governmental Permit or (ii) any actual or possible revocation,
withdrawal, suspension, cancellation, termination or modification of any Parent
Governmental Permit.  

(b)

The Parent (and any consolidated, combined, unitary or aggregate group for Tax
purposes of which the Parent is or has been a member), (A) has properly
completed and timely filed all Returns required to be filed by it or on its
behalf, (B) has timely paid all Taxes required to be paid by it for which
payment was due (other than Taxes or other charges which are being contested in
good faith, , (C) has made (or will make on a timely basis) all estimated Tax
payments required to be made, and (D) has no Liability for Taxes in excess of
the amount so paid or accruals or reserves so established.  All such Returns are
true, correct and complete in all material respects. The Parent has not received
any notification in writing from the IRS or any other Taxing authority regarding
any material issues that (i) are currently pending before the IRS or any other
Taxing agency or authority (including any sales or use Taxing authority)
regarding the Parent, or (ii) have been raised by the IRS or other Taxing agency
or authority and not yet finally resolved.  

(c)

There is no Action pending against the Parent (or against any officer, director,
employee or agent of the Parent in their capacity as such) before any
Governmental Authority, arbitrator or mediator, nor has any such Action been
threatened.  

ARTICLE V
COMPANY COVENANTS

During the time period from the Agreement Date until the earlier to occur of (a)
the First Effective Time or (b) the termination of this Agreement in accordance
with the provisions of Article VIII, the Company covenants and agrees with
Parent as follows:

5.1

Advice of Changes

.  The Company shall promptly advise Parent in writing of (a) any event
occurring subsequent to the Agreement Date that would render any representation
or warranty of the Company contained in Article III untrue or inaccurate such
that the condition set forth in Section 7.2(a) would not be satisfied, (b) any
breach of any covenant or obligation of the Company pursuant to this Agreement
or any Company Ancillary Agreement such that the condition set forth in
Section 7.2(b) would not be satisfied, (c) any Material Adverse Change in the
Company, or (d) any change, event, circumstance, condition or effect that would
reasonably be expected to result in a Material Adverse Effect on the Company or
cause any of the conditions set forth in Section 7.2 not to be satisfied;
provided, however, that the delivery of any notice pursuant to this Section 5.1
shall not be deemed to amend or supplement the Company Disclosure Schedule.

5.2

Maintenance of Business.

(a)

The Company shall use its commercially reasonable efforts to carry on and
preserve the Company Business and its business relationships with customers,
advertisers, suppliers, employees, independent contractors and others with whom
the Company has contractual relations.  If the Company becomes aware of any
material deterioration in the relationship with any material customer,
advertiser, supplier, employee or independent contractor, it shall promptly
bring such information to Parent ‘s attention in writing and, if requested by
Parent, shall exert commercially reasonable efforts to promptly restore the
relationship.

(b)

The Company shall (i) pay all of its debts and taxes when due, subject to good
faith disputes over such debts or taxes and (ii) pay or perform its other
Liabilities when due.

(c)

The Company shall assure that each of its Contracts entered into after the
Agreement Date will not require the procurement of any consent, waiver or
novation or provide for any material change in the obligations of any party in
connection with, or terminate as a result of the consummation of, the Merger.

5.3

Conduct of Business

.  The Company and each Subsidiary shall continue to conduct the Company
Business in the ordinary and usual course consistent with its past practices,
and neither the Company nor any Subsidiary shall, without Parent ‘s prior
written consent, such consent not to be unreasonably withheld:

(a)

incur any indebtedness for borrowed money or guarantee any such indebtedness of
another Person or issue or sell any debt securities or guarantee any debt
securities of another Person;

(b)

(i) lend any money, other than reasonable and normal advances to employees for
bona fide expenses that are incurred in the ordinary course of business
consistent with its past practices, (ii) make any investments in or capital
contributions to, any Person, (iii) forgive or discharge in whole or in part any
outstanding loans or advances, or (iv) prepay any indebtedness;

(c)

enter into any Company Material Contract, violate, terminate, amend or otherwise
modify or waive any of the material terms of any Company Material Contract, or
enter into any material transaction;

(d)

place or allow the creation of any Encumbrance (other than a Permitted
Encumbrance) on any of its assets or properties;

(e)

sell, lease, license, transfer or dispose of any assets material to the Company
Business;

(f)

except as set forth in this Agreement, (i) pay any bonus, increased salary,
severance or special remuneration to any officer, director, employee or
consultant, (ii) amend or enter into any employment or consulting Contract with
any such person, or (iii) adopt or amend any employee or compensation benefit
plan, including any stock purchase, stock issuance or stock option plan, or
amend any compensation, benefit, entitlement, grant or award provided or made
under any such plan (except in each case as required under ERISA or as necessary
to maintain the qualified status of such plan under the Code);

(g)

change any of its accounting methods;

(h)

declare, set aside or pay any cash or stock dividend or other distribution
(whether in cash, stock or property) in respect of its capital stock, or redeem,
repurchase or otherwise acquire any of its capital stock or other securities
(except for the repurchase of stock from its employees, directors, consultants
or contractors in connection with the termination of their services at the
original purchase price of such stock), or pay or distribute any cash or
property to any of its stockholders or securityholders or make any other cash
payment to any of its stockholders or securityholders;  

(i)

terminate, waive or release any material right or claim;

(j)

other than in connection with the exercise and/or conversion of outstanding
stock option, warrant or other convertible securities, issue, sell, create or
authorize any shares of its capital stock of any class or series or any other of
its securities, or issue, grant or create any warrants, obligations,
subscriptions, options, convertible securities, or other commitments to issue
shares of its capital stock or any securities that are potentially exchangeable
for, or convertible into, shares of its capital stock;

(k)

subdivide, split, combine or reverse split the outstanding shares of its capital
stock of any class or series or enter into any recapitalization affecting the
number of outstanding shares of its capital stock of any class or series or
affecting any other of its securities;

(l)

merge, consolidate or reorganize with, acquire, or enter into any other business
combination with any corporation, partnership, limited liability company or any
other entity (other than Parent), acquire a substantial portion of the assets of
any such entity, or enter into any negotiations, discussions or Contract for
such purpose;

(m)

amend its Certificate of Incorporation  or Bylaws or other comparable charter
documents (other than as described in Section 5.13 below);

(n)

license any of its technology or Intellectual Property, other than non-exclusive
licenses in the ordinary course of business consistent with its past practices;

(o)

materially change any insurance coverage;

(p)

(i) agree to any audit assessment by any taxing authority, (ii) file any Return
or amendment to any Return unless copies of such Return or amendment have first
been delivered to Parent for its review at a reasonable time prior to filing,
(iii) except as required by Applicable Law, make or change any material election
in respect of taxes or adopt or change any material accounting method in respect
of taxes, or (iv) enter into any closing agreement, settle any claim or
assessment in respect of taxes, or consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of taxes;

(q)

modify or change the exercise or conversion rights or exercise or purchase
prices of any of its capital stock, any of its stock options, warrants or other
securities, or accelerate or otherwise modify (i) the right to exercise any
option, warrant or other right to purchase any of its capital stock or other
securities or (ii) the vesting or release of any shares of its capital stock or
other securities from any repurchase options or rights of refusal held by it or
any other party or any other restrictions;

(r)

(i) initiate any Action or (ii) settle or agree to settle any Action, other than
a settlement or agreement to settle with respect to the Patent Claim that
involves solely the payment of money damages in an aggregate amount (including
all Damages) not to exceed the Patent Escrow Amount (and which settlement is
funded from the Patent Escrow Amount);

(s)

(i) pay, discharge or satisfy, in an amount in excess of $10,000 in any one case
or $25,000 in the aggregate, any Liability arising otherwise than in the
ordinary course of business, other than (1) the payment, discharge or
satisfaction of Liabilities reflected or reserved against in the Company Balance
Sheet and (2) the payment, discharge or satisfaction of Company Merger Expenses,
or (ii) make any capital expenditures, capital additions or capital
improvements;

(t)

change the manner in which it extends warranties, discounts or credits to
customers; or

(u)

(i) agree to do any of the things described in the preceding clauses (a)-(t),
(ii) take or agree to take any action which would reasonably be expected to make
any of the Company’s representations or warranties contained in this Agreement
materially untrue or incorrect, or (iii) take or agree to take any action which
would reasonably be expected to prevent the Company from performing or cause the
Company not to perform one or more covenants required hereunder to be performed
by the Company.

For purposes of this Section 5.3, “Company Material Contract” includes any
Contract arising subsequent to the date of this Agreement that would have been
required to be listed on the Company Disclosure Schedule pursuant to Section
3.11 or Section 3.13 had such Contract been in effect on the date of this
Agreement.

5.4

Regulatory Approvals.  

The Company shall promptly execute and file, or join in the execution and filing
of, any application, notification or other document that may be necessary in
order to obtain the authorization, approval or consent of any Governmental
Authority, whether federal, state, local or foreign, which may be required in
connection with the consummation of the Merger and the other transactions
contemplated by this Agreement or any Company Ancillary Agreement.  The Company
shall use commercially reasonable efforts to obtain, and to cooperate with
Parent to promptly obtain, all such authorizations, approvals and consents and
shall pay any associated filing fees payable by the Company with respect to such
authorizations, approvals and consents.  The Company shall promptly inform
Parent of any material communication between the Company and any Governmental
Authority regarding any of the transactions contemplated hereby.  If the Company
or any affiliate of the Company receives any formal or informal request for
supplemental information or documentary material from any Governmental Authority
with respect to the transactions contemplated hereby, then the Company shall
make, or cause to be made, as soon as reasonably practicable, a response in
compliance with such request following consultation with Parent.

5.5

Approval of Company Stockholders.  

The Board of Directors of the Company will unanimously recommend to the Company
Stockholders that they approve this Agreement and the Merger and the Company
shall promptly following the signing of the Agreement obtain written consents
from Company Stockholders that  hold sufficient number of shares to approve the
Merger in accordance with Applicable Law, the Company’s Certificate of
Incorporation and Bylaws (the “Requisite Company Stockholder Consent”).  Prior
to the Closing Date and at the earliest practicable date following the Agreement
Date, and in accordance with Applicable Law, the Company’s Certificate of
Incorporation and Bylaws, the Company shall solicit written consents from all
other Company Stockholders to obtain their approval of this Agreement and the
Merger or otherwise notify  the Company Stockholders of the transactions
contemplated by this Agreement and their appraisal rights in connection
therewith pursuant to Section 263 of Delaware Law and other Applicable Law.  In
soliciting such written consent, the Company shall use its reasonable best
efforts to obtain the approval of the stockholders of the Company.  The Company
will prepare an information statement (the “Information Statement”) in form and
substance reasonably acceptable to Parent and its Representatives, with respect
to the solicitation of written consents to approve this Agreement, the Merger
and related matters.  Each of Parent and the Company agrees to provide promptly
to the other such information concerning the Company Business and financial
statements and affairs as, in the reasonable judgment of the providing party or
its counsel, may be required or appropriate for inclusion in the Information
Statement.  As soon as reasonably practicable after the execution of this
Agreement, the Company will distribute the Information Statement to the
stockholders of the Company.  Whenever any event occurs which should be set
forth in an amendment or supplement to the Information Statement, the Company or
Parent, as the case may be, will promptly inform the other of such occurrence
and cooperate in making any appropriate amendment or supplement, and/or mailing
to stockholders of the Company, such amendment or supplement.

5.6

Novations, Terminations, Amendments, Consents, Authorizations and Notices.  

The Company shall use its commercially reasonable efforts to obtain prior to
Closing such written novations, terminations, amendments, consents and
authorizations of third parties, give notices to third parties and take such
other actions as may be necessary or appropriate in order to effect the
consummation of the Merger and the other transactions contemplated by this
Agreement, to enable the Surviving Entity (or Parent) to carry on the Company
Business immediately after the Closing Date and to keep in effect and avoid the
breach, violation of, termination of, or adverse change to, any Contract,
including such novations, terminations, amendments, consents, authorizations and
notices listed on Schedules 7.2(g)(A), 7.2(g)(B), 7.2(g)(C) and 7.2(g)(D)
hereof.

5.7

Litigation.  

The Company shall notify Parent in writing promptly after learning of any
material Action by or before any court, arbitrator or arbitration panel, board
or governmental agency, initiated by or against it, or, to the knowledge of the
Company, threatened against the Company, any Subsidiary or any of their
respective officers, directors, employees or stockholders in their capacity as
such.

5.8

No Other Negotiations.

(a)

Effective upon delivery of the Requisite Stockholder Consent, the Company shall
not, and shall not authorize, encourage or permit any of its officers,
directors, employees, stockholders, affiliates, agents, advisors (including any
attorneys, financial advisors, investment bankers or accountants) or other
representatives (collectively, “Company Representatives”) to, directly or
indirectly:  (a) solicit, initiate, or knowingly encourage, facilitate or induce
the making, submission or announcement of any inquiry, offer or proposal from
any Person (other than Parent) concerning any Alternative Transaction; (b)
furnish any nonpublic information regarding the Company to any Person (other
than Parent and its agents and advisors) in connection with or in response to
any inquiry, offer or proposal for or regarding any Alternative Transaction
(other than to respond to such inquiry, offer or proposal by indicating that the
Company is subject to this Section 5.8); (c) enter into, participate in,
maintain or continue any discussions or negotiations with any Person (other than
Parent and its agents and advisors) with respect to any Alternative Transaction
(other than to respond to such inquiry, offer or proposal by indicating that the
Company is subject to this Section 5.8); (d) otherwise cooperate with,
facilitate or encourage any effort or attempt by any Person (other than Parent
and its agents and advisors) to effect any Alternative Transaction; or (e)
execute, enter into or become bound by any letter of intent, memorandum of
understanding, other Contract or understanding between the Company and any
Person (other than Parent) that is related to, provides for or concerns any
Alternative Transaction.  If any Company Representatives, whether in his or her
capacity as such or in any other capacity, takes any action that the Company is
obligated pursuant to this Section 5.8(a) to cause such Company Representatives
not to take, then the Company shall be deemed for all purposes of this Agreement
to have breached this Section 5.8(a).

(b)

The Company shall notify Parent within 24 hours after receipt by the Company
(or, to the Company’s Knowledge, by any of the Company Representatives) of any
inquiry, offer or proposal that constitutes an Alternative Transaction, or any
other notice that any Person is considering making an Alternative Transaction,
or any request for nonpublic information relating to the Company or for access
to any of the properties, books or records of the Company by any Person or
Persons other than Parent (which notice shall identify the Person or Persons
making, or considering making, such inquiry, offer or proposal) in connection
with a potential Alternative Transaction and shall keep Parent fully informed of
the status and details of any such inquiry, offer or proposal and any
correspondence or communications related thereto and shall provide to Parent a
correct and complete copy of such inquiry, offer or proposal and any amendments,
correspondence and communications related thereto, if it is in writing, or a
written summary of the material terms thereof, if it is not in writing.  The
Company shall provide Parent with 48 hours prior notice (or such lesser prior
notice as is provided to the members of the Board of Directors of the Company)
of any meeting of the Board of Directors of the Company at which the Board of
Directors of the Company is reasonably expected to consider any Alternative
Transaction.  The Company shall immediately cease and cause to be terminated any
and all existing activities, discussions and negotiations with any Persons
conducted heretofore with respect to an Alternative Transaction.

5.9

Access to Information.  

The Company shall allow Parent and its agents and advisors access at reasonable
times to the files, books, records, technology, Contracts, personnel and offices
of the Company, including any and all information relating to the Company’s
taxes, Contracts, Liabilities, financial condition and real, personal and
intangible property, subject to the terms of the Non-Disclosure Agreement
between the Company and Parent dated as of July 13, 2007 (the “Mutual NDA”).
 The Company shall cause its accountants to cooperate with Parent and Parent’s
agents and advisors in making available all financial information reasonably
requested by Parent and its agents and advisors, including the right to examine
all working papers pertaining to all financial statements prepared by such
accountants.

5.10

Satisfaction of Conditions Precedent.  

The Company shall use commercially reasonable efforts to satisfy or cause to be
satisfied all the conditions precedent set forth in Sections 7.1 and 7.2, and
the Company shall use commercially reasonable efforts to cause the Merger and
the other transactions contemplated by this Agreement to be consummated in
accordance with the terms of this Agreement.

5.11

Notices to Company Stockholders and Employees.

(a)

The Company shall timely provide to holders of Company Capital Stock, options
and warrants all advance notices required to be given to such holders in
connection with this Agreement, the Merger and the transactions contemplated by
this Agreement under any applicable Contracts and under Applicable Law.

(b)

The Company shall give all notices and other information required to be given by
the Company to the employees of the Company, any collective bargaining unit
representing any group of employees of the Company, and any applicable
Governmental Authority under the WARN Act, the National Labor Relations Act, as
amended, the Code, COBRA and other Applicable Law in connection with the
transactions contemplated by this Agreement or other applicable Contracts.

5.12

Certain Closing Certificates and Documents.  

The Company shall prepare and deliver to Parent drafts of (i) the Stockholder
Spreadsheet, (ii) a list of all holders of Holdover Options and the Holdover
Option Termination Payments payable to such holders pursuant to Section
2.2(a)(iii)(D), and (iii) the Closing Date Balance Sheet, each not later than
five (5) Business Days prior to the Closing Date.  The Company shall consider in
good faith any comments and proposed changes to the draft of the Closing Date
Balance Sheet that may be suggested by Parent in the period following delivery
thereof but prior to Closing.  Such drafts of the Closing Date Balance Sheet
shall present fairly, on a good faith basis and using the Company’s reasonable
best efforts, the estimated financial position of the Company and its
Subsidiaries as of immediately prior to the First Effective Time on the Closing
Date in accordance with GAAP. The Company shall also provide no later than five
(5) Business Days prior to the Closing Date, its reasonable estimate of the
Company Merger Expenses.

5.13

Amendment to Restated Certificate

.  The Company shall amend its Certificate of Incorporation as set forth in the
Certificate of Amendment attached hereto as Exhibit E  in order to authorize the
conversion of shares of Company Capital Stock in accordance with Section 2.1 and
the deposit of the Escrow Amount and Patent Escrow Amount in accordance with
Section 2.2, to permit valuation of Parent Common Stock at the Average Parent
Stock Price for purposes of compliance with the distribution provisions of the
Certificate and to waive any notice requirements imposed in the Certificate that
would otherwise be applicable to the Merger.  The Company shall file the
Certificate of Amendment no later than two (2) Business Days after the Requisite
Company Stockholder Consent is obtained.

ARTICLE VI
PARENT COVENANTS

During the time period from the Agreement Date until the earlier to occur of (a)
the First Effective Time or (b) the termination of this Agreement in accordance
with the provisions of Article VIII, Parent covenants and agrees with the
Company as follows:

6.1

Advice of Changes.  

Parent shall promptly advise the Company in writing of (a) any event occurring
subsequent to the Agreement Date that would render any representation or
warranty of Parent, Interim Sub or Quintum Sub contained in Article IV untrue or
inaccurate such that the condition set forth in Section 7.3(a) would not be
satisfied, or (b) any breach of any covenant or obligation of Parent, Interim
Sub or Quintum Sub pursuant to this Agreement, any Parent Ancillary Agreement or
any Merger Sub Ancillary Agreement such that the condition set forth in
Section 7.3(b) would not be satisfied; provided, however, that the delivery of
any notice pursuant to this Section 6.1 shall not be deemed to amend or
supplement the Parent Disclosure Schedule.

6.2

Regulatory Approvals.  

Parent shall promptly execute and file, or join in the execution and filing of,
any application, notification or other document that may be necessary in order
to obtain the authorization, approval or consent of any Governmental Authority,
whether foreign, federal, state, local or municipal, which may be required in
connection with the consummation of the Merger and the other transactions
contemplated by this Agreement, any Parent Ancillary Agreement or any Merger Sub
Ancillary Agreement.  Parent shall use commercially reasonable efforts to obtain
all such authorizations, approvals and consents and shall pay any associated
filing fees payable by Parent, Interim Sub or Quintum Sub with respect to such
authorizations, approvals and consents.  Parent shall promptly inform the
Company of any material communication between Parent and any Governmental
Authority regarding any of the transactions contemplated hereby.  If Parent or
any affiliate of Parent receives any formal or informal request for supplemental
information or documentary material from any Governmental Authority with respect
to the transactions contemplated hereby, then Parent shall make, or cause to be
made, as soon as reasonably practicable, a response in compliance with such
request.  Notwithstanding anything in this Agreement to the contrary, if any
administrative or judicial action or proceeding is instituted (or threatened to
be instituted) challenging any transaction contemplated by this Agreement as
violative of any Applicable Law, it is expressly understood and agreed that
neither Parent nor any of its Subsidiaries or affiliates shall be under any
obligation to:  (a) litigate or contest any administrative or judicial action or
proceeding or any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent; or (b) make proposals, execute or carry out
Contracts or submit to orders providing for (i) the sale or other disposition or
holding separate (through the establishment of a trust or otherwise) of any
assets or categories of assets of Parent, any of its subsidiaries or affiliates
or the Company or any of its Subsidiaries, or the holding separate of the shares
of Company Capital Stock or (ii) the imposition of any limitation on the ability
of Parent or any of its subsidiaries or affiliates to freely conduct their
business or own such assets or to acquire, hold or exercise full rights of
ownership of the shares of Company Capital Stock.

6.3

Satisfaction of Conditions Precedent.  

Parent shall use its commercially reasonable efforts to satisfy or cause to be
satisfied all of the conditions precedent that are set forth in Sections 7.1 and
7.3, and Parent shall use its commercially reasonable efforts to cause the
Merger and the other transactions contemplated by this Agreement to be
consummated in accordance with the terms of this Agreement as soon as reasonably
practical.

6.4

New York Stock Exchange Listing.  

Parent shall, prior to the First Effective Time, file with The New York Stock
Exchange a Subsequent Listing Application with respect to the shares of Parent
Common Stock to be issued in the Merger.

6.5

Registration of Parent Common Stock.

(a)

Registrable Shares.  For purposes of this Agreement, “Registrable Shares” shall
mean the shares of Parent Common Stock issued in the Merger and any common stock
issued by Parent in respect of such shares of Parent Common Stock by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or reorganization but excluding shares
of Parent Common Stock issued in the Merger that have been sold or otherwise
transferred by the Company Stockholders who initially received such shares in
the Merger in violation of this Agreement, the Stockholder Agreement or
Applicable Law.

(b)

Required Registration.  Parent shall prepare and file with the SEC a
registration statement on Form S-3 (or such successor or other appropriate form)
under the Securities Act as soon as practicable, but in no event later than the
date that is 30 days following the Closing Date (and, if such date should fall
on a day other than a Business Day, then on the next following Business Day)
with respect to the Registrable Shares (the “Registration Statement”), and shall
use commercially reasonable efforts to cause such Registration Statement to be
declared effective by the SEC as promptly as practicable thereafter; provided,
however, that Parent shall not be obligated to file more than one (1)
Registration Statement pursuant to this Section 6.5.  Parent shall deliver to
each holder of Registrable Shares, including any permitted transferees reflected
in the stockholder records of Parent (each, a “Holder”), in writing at the
address set forth in the stockholder records of Parent, notice that such
Registration Statement has been declared effective by the SEC within two (2)
Business Days following such declaration by the SEC.

(c)

Effectiveness; Suspension Right.

(i)

Parent will use commercially reasonable efforts to maintain the effectiveness of
the Registration Statement for such period of time after the Closing Date equal
to the then current holding period under Rule 144(k) of the Securities Act (the
“Registration Effective Period”),   and during such Registration Effective
Period, (a) prepare and file with the SEC such amendments (including
post-effective amendments) to the Registration Statement and supplements to the
prospectus contained therein as may be necessary to keep the Registration
Statement continuously effective and in compliance with the provisions of the
Securities Act applicable thereto so as to permit the prospectus forming a part
thereof to be current and usable by the Holders for resales of the Registrable
Shares and (b) take all lawful action such that the Registration Statement and
any amendment thereto does not, when it becomes effective, and any prospectus
forming a part of the Registration Statement and any amendment thereto does not,
as of the date of delivery to the Holder, contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading subject in each case to
the following limitations and qualifications.

(ii)

Following the date on which the Registration Statement is first declared
effective, the Holders will be permitted (subject in all cases to Section 6.6(a)
and Section 6.7 below) to offer and sell Registrable Shares during the
Registration Effective Period in the manner described in the Registration
Statement provided that the Registration Statement remains effective and has not
been suspended.

(iii)

Notwithstanding any other provision of this Section 6.5 but subject to Section
6.6, Parent shall have the right at any time to require that all Holders suspend
further open market offers and sales of Registrable Shares whenever, and only
for so long as, in the reasonable judgment of Parent after consultation with
counsel there is in existence material undisclosed information or events with
respect to Parent (the “Suspension Right”).  In the event Parent exercises the
Suspension Right, such suspension will continue only for the period of time
reasonably necessary for disclosure to occur at a time that is not materially
detrimental to Parent and its stockholders or until such time as the information
or event is no longer material, each as determined in good faith by Parent.  The
Suspension Right shall not be invoked during any period when officers or
directors of the Parent are permitted to trade in the Parent Common Stock.  

(d)

Expenses.  The costs and expenses to be borne by Parent for purposes of this
Section 6.5 shall include, without limitation, printing expenses (including a
reasonable number of prospectuses for circulation by the selling stockholders),
legal fees and disbursements of counsel for Parent, “blue sky” expenses,
accounting fees and filing fees, but shall not include underwriting commissions,
legal fees and disbursements of counsel to the Holders, if any, or similar
charges.

(e)

Indemnification.

(i)

To the extent permitted by Law, Parent will indemnify and hold harmless each
Holder, any underwriter (as defined in the Securities Act) for such Holder, its
officers, directors, stockholders or partners and each person, if any, who
controls such stockholder or underwriter within the meaning of the Securities
Act or the Exchange Act, against any losses, claims, damages, or liabilities
(joint or several) to which they may become subject under the Securities Act,
the Exchange Act or other federal or state law, insofar as such losses, claims,
damages, reasonable expenses (including, without limitations, attorneys fees) or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
“Violation”): (A) any Registration Statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or any “issuer free writing prospectus” (as defined in
Securities Act Rule 433), (B) the omission or alleged omission to state therein
a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (C) any violation or alleged violation by
Parent of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law; and Parent will pay to each such Holder (and its officers,
directors, stockholders or partners), underwriter or controlling person, any
legal or other expenses reasonably incurred by them in connection with the
investigating or defending of any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 6.5(e)(i) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is effected without
the consent of Parent; nor shall Parent be liable in any such case for any such
loss, claim, damage, liability, or action to the extent that it arises out of or
is based upon (a) a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in the Registration
Statement by any such Holder, or (b) a Violation that would not have occurred if
such Holder had delivered to the purchaser the version of the prospectus most
recently made available by Parent to the Holder as of the date of such sale.  

(ii)

To the extent permitted by law, each Holder will indemnify and hold harmless
Parent, each of its directors, each of its officers who has signed the
Registration Statement, each person, if any, who controls Parent within the
meaning of the Securities Act, any underwriter, any other Holder selling
securities pursuant to the Registration Statement and any controlling person of
any such underwriter or other Holder, against any losses, claims, damages, or
liabilities (joint or several) to which any of the foregoing persons may become
subject, under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages, reasonable expenses (including
without limitation, attorneys fees), or liabilities (or action in respect
thereto) arise out of or are based upon any Violation (which includes without
limitation the failure of such Holder to comply with the prospectus delivery
requirements under the Securities Act, and the failure of such Holder to deliver
the most current prospectus made available by Parent prior to such sale), in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in the Registration Statement or such Violation is
caused by such Holder’s failure to deliver to the purchaser of the Holder’s
Registrable Shares a prospectus (or amendment or supplement thereto) that had
been made available to such Holder by Parent; and such Holder will pay any legal
or other expenses reasonably incurred by any person intended to be indemnified
pursuant to this Section 6.5(e)(ii) in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this Section 6.5(e)(ii) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the
Representative, which consent shall not be unreasonably withheld.  The aggregate
indemnification and contribution liability of such Holder under this Section
6.5(e)(ii) shall not exceed the net proceeds received by such Holder in
connection with sale of Registrable Shares pursuant to the Registration
Statement, except in the case of fraud by such Holder.

(iii)

Each person entitled to indemnification under this Section 6.5(e) (the
“Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim and any
litigation resulting therefrom, provided that counsel for the Indemnifying Party
who conducts the defense of such claim or any litigation resulting therefrom
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party’s expense, and provided further that the failure of any
Indemnified party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 6.5 unless the
Indemnifying Party is materially prejudiced thereby.  No Indemnifying Party, in
the defense of any such claim or litigation, shall (except with the consent of
each Indemnified Party) consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.  Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.

(iv)

To the extent that the indemnification provided for in this Section 6.5 (e) is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable, by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations.  The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement of omission.

6.6

Parent Obligations.

In connection with the registration of the Registrable Shares, Parent shall use
its commercially reasonable efforts to:

(a)

prepare and file a Registration Statement with the SEC which shall comply as to
form with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith, and use its commercially
reasonable efforts to cause each Registration Statement and the related
Prospectus and any amendment or supplement thereto, as of the effective date of
such Registration Statement, amendment or supplement to comply in all material
respects with the rules and regulations of the SEC;  

(b)

furnish to each Holder, (i) as soon as reasonably practicable after the
Registration Statement is filed with the SEC, one copy of the Registration
Statement, each prospectus forming a part of the Registration Statement, and
each amendment or supplement thereto, and (ii) following the effective date of
the Registration Statement, such number of copies of the prospectus and all
amendments and supplements thereto and such other documents, as such Holder may
reasonably request in order to facilitate the disposition of the Registrable
Shares owned by such Holder;

(c)

(i) register or qualify the Registrable Shares covered by the Registration
Statement under such securities or “Blue Sky” laws of all jurisdictions
requiring Blue Sky registration or qualification, (ii) prepare and file in such
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof at all times during the Registration
Effective Period, (iii)  if required by law, use its commercially reasonable
efforts to prepare a supplement or post-effective amendment to a Registration
Statement or the related Prospectus, or any document incorporated therein by
reference, or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Shares, such Prospectus will not contain
any untrue statement of a material fact, or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, (iv) take
all such other lawful actions as may be necessary to maintain such registrations
and qualifications in effect at all times during the Registration Effective
Period, and (v) take all such other lawful actions reasonably necessary or
advisable to qualify the Registrable Shares for sale in such jurisdictions;
provided, however, that Parent shall not be required in connection therewith or
as a condition thereto to (A) qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 6.6(c)or (B)
file a general consent to service of process in any such jurisdiction;

(d)

cooperate with the Holders who hold Registrable Shares to facilitate the timely
preparation and delivery of certificates for the Registrable Shares and enable
such certificates to be in such denominations or amounts, as the case may be, as
the Holders reasonably may request and registered in such names as the Holders
may request; and, within three (3) Business Days after the Registration
Statement is declared effective by the SEC, deliver and cause legal counsel
selected by Parent to deliver to the transfer agent for the Registrable Shares
(with copies to the Holders) an appropriate instruction and, to the extent
necessary, an opinion of such counsel, to facilitate the timely preparation and
delivery of such certificates; and

(e)

take all such other lawful actions reasonably necessary to expedite and
facilitate the disposition by the Holders of their Registrable Shares in
accordance with the intended methods therefore provided in the prospectus which
are customary under the circumstances, including without limitation providing
reasonable assistance in confirming (assuming the same is true) that a Holder is
not an “affiliate” of the Parent within the meaning of the Securities Act;
provided, however, that such reasonable assistance shall not include in any case
the preparation or delivery of an opinion of legal counsel with respect to any
Holder’s status as an “affiliate”; provided, further, that upon the request of a
Holder, and in Parent’s sole discretion and at Holder’s sole expense, Parent may
elect to prepare and deliver such an opinion of legal counsel;

(f)

notify each Holder of Registrable Shares promptly, and, if requested by such
Holder, confirm such advice in writing, (i) when a Registration Statement has
become effective and when any post-effective amendments and supplements thereto
become effective, (ii) of the issuance by the SEC or any state securities
authority of any stop order, injunction or other order or requirement suspending
the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, and (iii) of the happening of any event during the
period that the Registration Statement is in effect, a result of which
registration statement or the related prospectus contains any untrue statement
of material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or if the
Parent receives any notification with respect to the suspension of the
qualification of the Registrable Shares for sale in any jurisdictions or the
initiation of any proceeding for such purpose;

(g)

use its commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible time;

(h)

cause all Registrable Shares to be listed on the New York Stock Exchange and any
securities exchange on which securities of the same class issued by the Company
are then so qualified or listed; and

(i)

cooperate and assist in any filings required to be made with the National
Association of Securities Dealers.

6.7

Obligations of the Holders.  

In connection with the registration of the Registrable Shares, the Holders shall
have the following obligations, which obligations shall be several and not
joint:

(a)

Prior to the first anticipated filing of the Registration Statement under
Section 6.5 hereof, each Holder shall provide Parent with such information as
may be required by Section 507 of Regulation S-K of the Securities Act, together
with whatever confirmations, information requests, certificates or consents as
may reasonably be requested by Parent.

(b)

Each Holder by its acceptance of the Registrable Shares agrees to cooperate with
Parent in connection with the preparation of the Registration Statement under
Section 6.5 hereof.

(c)

As promptly as practicable after becoming aware of such event, the relevant
Holder shall notify Parent of the occurrence of any event, as a result of which
the material submitted by such Holder for inclusion in the prospectus included
in the Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

(d)

Each Holder agrees that, following receipt of any notice from Parent of the
exercise of the Suspension Right, it shall not dispose of Registrable Shares
pursuant to the Registration Statement covering such Registrable Shares and, if
so directed by Parent, such Holder shall deliver to Parent (at the expense of
Parent) or destroy (and deliver to Parent a certificate of destruction) all
copies in such Holder’s possession, of the prospectus, as amended or
supplemented, covering such Registrable Shares current at the time of receipt of
such notice.

6.8

Tax Free Treatment

.  For purposes of any and all Tax returns or other filings required under the
Code or other Applicable Law to be made following the Closing by Parent, the
Surviving Entity, the Company or any of their respective affiliates, any and all
of such Tax returns and other filings shall consistently treat the transactions
contemplated hereunder as a tax-free reorganization pursuant to the provisions
of Section 368(a) of the Code and none of Parent, the Surviving Entity, the
Company or any of their respective affiliates shall take any position contrary
to the foregoing.

6.9

Indemnification of Directors and Officers

.  If the Merger is consummated, then, for a period of six years from the
Closing Date, the Surviving Entity (and its successors and assigns) will honor
the indemnification, exculpation and advancement of expenses provisions
applicable to the present and former officers and directors of the Company (the
“Company D&Os”) with respect to acts or omissions occurring on or prior to the
Closing Date to the extent provided under written agreements with such
individuals, or under the Company’s Amended and Restated Certificate of
Incorporation or Bylaws, each as in effect as of this Agreement Date. The
provisions of this Section are intended for the benefit of, and shall be
enforceable by, each such Company D&O.  

6.10

Employees and Contractors.

(a)

Parent shall offer employment to each employee of the Company and its
Subsidiaries as of the Closing Date.  The Company shall assist Parent with its
efforts to enter into an Offer Letter and a Proprietary Information and
Inventions Agreement with each such employee as soon as practicable after the
Agreement Date and in any event prior to the Closing Date. With respect to
matters described in this Section 6.10, the Company will consult with Parent
(and will consider in good faith the advice of Parent) prior to sending any
notices or other communication materials to its employees.  Each employee of the
Company who is offered and accepts employment with Parent as of the Closing Date
shall be referred to as a “Continuing Employee”.

(b)

Parent covenants and agrees that to the extent the existing benefit plans and
arrangements provided by the Company to its employees are terminated on or after
the Closing Date, such employees shall be entitled to participate in all benefit
plans and arrangements which are available and subsequently become available to
Parent’s employees (the “Parent Benefit Plans”) on substantially similar terms
applicable to employees of Parent who are similarly situated based on levels of
responsibility, to the extent permitted by the terms of the applicable Parent
Benefit Plans.  Parent shall recognize the prior service with the Company or its
Subsidiaries of each of the Continuing Employees for purposes of eligibility
under the Parent Benefit Plans, and for Parent Benefit Plans relating to
vacation or severance Parent shall recognize such prior service for purposes of
determination of benefit levels, to the extent permitted by the terms of, or by
the providers for, the applicable Parent Benefit Plans.  Notwithstanding
anything herein to the contrary, this Section 6.10 shall not operate to (i)
duplicate any benefit provided to any Continuing Employee or to fund any such
benefit, (ii) require Parent or its subsidiaries or affiliates or any Parent
Benefit Plan or trust related thereto to pay for any benefits that relate to any
time period prior to the Continuing Employees’ participation in the Parent
Benefit Plans, (iii) require Parent to continue to maintain any employee benefit
plan in effect following the Closing Date for Parent’s employees, including the
Continuing Employees, or (iv) be construed to mean the employment of the
Continuing Employees is not terminable by Parent at will at any time, with or
without cause, for any reason or no reason.

6.11

Access to Information

.  Parent shall provide to the Company and its accountants, legal counsel, and
other representatives such information concerning the business, finances,
properties, products, services and personnel of the Parent as the Company may
reasonably request, subject to the terms of the Mutual NDA.

ARTICLE VII
CONDITIONS TO CLOSING OF MERGER

7.1

Conditions to Each Party’s Obligation to Effect the Merger.  

The respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction prior to the Closing Date of the following
conditions:

(a)

Governmental Approvals.  Other than the filing of the Certificates of Merger in
accordance with the terms of Section 2.4, all authorizations, consents, orders
or approvals of, or declarations or filings with, or expirations of waiting
periods imposed by, any Governmental Authority shall have been filed, occurred
or been obtained.

(b)

Company Stockholder Approvals.  The Merger and this Agreement shall have been
duly and validly approved and adopted, as required by Applicable Law and the
Company’s Certificate of Incorporation  and Bylaws, each as in effect on the
date of such approval and adoption, by the requisite Stockholder Approval.

(c)

No Injunctions or Restraints; Illegality.  No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint or prohibition
preventing the consummation of the Merger or limiting or restricting the conduct
or operation of the Company Business by Parent after the Merger shall have been
issued, nor shall any proceeding brought by a domestic administrative agency or
commission or other domestic Governmental Authority or other third party,
seeking any of the foregoing be pending; nor shall there be any action taken, or
any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger which makes the consummation of the Merger illegal.

7.2

Additional Conditions to Obligations of Parent, Interim Sub and Quintum Sub.  

The obligations of Parent, Interim Sub and Quintum Sub to effect the Merger are
subject to the satisfaction of each of the following conditions, any of which
may be waived in writing exclusively by Parent, Interim Sub and Quintum Sub:

(a)

Representations and Warranties.  The representations and warranties of the
Company set forth in this Agreement that are qualified by materiality shall be
true and correct, and the representation and warranties of the Company set forth
in this Agreement that are not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and (except to
the extent such representations and warranties speak as of an earlier date) as
of the Closing Date as though made on and as of the Closing Date, except for
changes contemplated by this Agreement; and Parent shall have received a
certificate signed on behalf of the Company by the Chief Executive Officer of
the Company to such effect.

(b)

Performance of Obligations of the Company.  The Company shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date; and Parent shall have received a
certificate signed on behalf of the Company by the Chief Executive Officer of
the Company to such effect.

(c)

Government Consents.  There shall have been obtained at or prior to the Closing
Date such permits or authorizations, and there shall have been taken all such
other actions by any Governmental Authority or other regulatory authority having
jurisdiction over the parties and the actions herein proposed to be taken, as
may be required to consummate the Merger.

(d)

Dissenting Stockholders.  Holders of not more than five percent (5%) of the
issued and outstanding Company Capital Stock as of the Closing shall have
elected to, or continue to have contingent rights to, exercise appraisal rights
under Delaware Law as to such shares.

(e)

Stockholder Agreements; Securities Act Compliance.  Parent shall have received a
Stockholder Agreement, in the form attached hereto as Exhibit D, or a Voting
Agreement, completed and executed by the Company Stockholders listed on Exhibit
H attached hereto, or provide other evidence reasonably satisfactory to Parent
to establish that each Company Stockholder listed on Exhibit H is an Accredited
Company Stockholder or the Parent and the Company have agreed to treat such
holder as a Nonaccredited Company Stockholder for purposes of Section
2.2(a)(iii)(B).

(f)

Employment Matters.  The executed Employment and Noncompetition Agreements of
each of the persons identified on Exhibit B-1 shall continue to be in full force
and effect. No less than  80% of the Company’s employees (including those who
executed Employment and Noncompetition Agreements) shall continue to be employed
by the Company and shall not have expressed an intention to terminate his or her
employment with the Company or to decline to accept employment with Parent.

(g)

Novation, Termination and Amendment of Contracts.  Parent shall have received
evidence satisfactory to Parent of (A) the novation or consent to assignment of
any Person whose novation or consent to assignment, as the case may be, may be
required in connection with the Merger or any other transaction contemplated by
this Agreement under the Contracts listed or described on Schedule 7.2(g)(A)
hereto, (B) the termination of each of the Contracts listed or described on
Schedule 7.2(g)(B) hereto,  (C) the amendment of each of the Contracts listed or
described on Schedule 7.2(g)(C) hereto and (D) the consent of, or delivery of
notice to, the parties (other than the Company or any Subsidiary) to each of the
Contracts listed or described on Schedule 7.2(g)(D) hereto.

(h)

Resignations of Directors and Officers.  The persons holding the positions of a
director or officer of the Company or any Subsidiary, in office immediately
prior to the First Effective Time, shall have resigned from such positions in
writing effective as of the First Effective Time.

(i)

Stockholder Spreadsheet.  Parent shall have received the Stockholder Spreadsheet
 which shall accurately set forth, as of the Closing Date, the name of each
Person that is the registered owner of any shares of Company Capital Stock and
the number and kind of shares so owned by such Person; provided, however, that
such receipt shall not be deemed to be an agreement by Parent that the
Stockholder Spreadsheet is accurate and shall not diminish Parent ‘s remedies
hereunder if the Stockholder Spreadsheet is not accurate.

(j)

Good Standing Certificates.  Parent shall have received a certificate from the
Office of the Secretary of State of the States of Delaware, New Jersey and each
other state in which the Company is qualified to do business as a foreign
corporation certifying that the Company is in good standing and that all
applicable taxes and fees of the Company through and including the date of such
certificate (which shall be no earlier than two (2) business days prior to the
Closing Date) have been paid.  Parent shall have received a certificate from the
jurisdiction of incorporation or formation of each of the Subsidiaries, to the
extent such a certificate is obtainable from such jurisdictions without
unreasonable expense or delay, certifying that each such Subsidiary is in good
standing and that all applicable taxes and fees of such Subsidiary through and
including the date of such certificate (which shall be no earlier than the
Agreement Date) have been paid.

(k)

FIRPTA.  Parent shall have received a properly executed Foreign Investment and
Real Property Tax Act of 1980 Notification Letter, in form and substance
reasonably satisfactory to Parent , which states that shares of Company Capital
Stock do not constitute “United States real property interests” under Section
897(c) of the Code, for purposes of satisfying Parent’s obligations under
Treasury Regulation Section 1.1445-2(c)(3).

(l)

Opinion of the Company’s Counsel.  Parent shall have received an opinion
satisfactory to Parent dated the Closing Date of Day Pitney LLP, counsel to the
Company, as to the matters set forth on Exhibit F.

(m)

Secretary’s Certificate.  Parent shall have received a certificate, dated as of
the Closing Date and executed on behalf of the Company by its Secretary,
certifying the Company’s (A) Certificate of Incorporation, (B) Bylaws, (C) board
resolutions approving the Merger and adopting this Agreement and resolving to
recommend this Agreement to the holders of Company Capital Stock, and (D)
stockholder resolutions adopting this Agreement and approving the Merger.

(n)

Termination of Company Benefit Arrangements.  Unless otherwise requested by
Parent in writing, no less than three (3) Business Days prior to the Closing
Date the Company shall provide (A) a true, correct and complete copy of
resolutions adopted by the Board of Directors of the Company, certified by the
Secretary of the Company, authorizing the termination of each or all of the
Company Benefit Arrangements and (B) any amendment reasonably requested by the
Parent to the 401(k) Plan, executed by the Company, that is sufficient to assure
compliance with all applicable requirements of the Code and regulations
thereunder so that the Tax-qualified status of the 401(k) Plan shall be
maintained at the time of its termination, with such amendment and termination
to be effective on the date immediately preceding the First Effective Time and
contingent upon the Closing.   

(o)

Termination of Security Interests.  Parent shall have received file stamped
copies of executed UCC-2 or UCC-3 termination statements executed by each Person
holding a security interest in any assets of the Company or any Subsidiary as of
the Closing Date terminating any and all such security interests and evidence
reasonably satisfactory to Parent that all Encumbrances on the assets of the
Company and its Subsidiaries shall have been released prior to or shall be
released simultaneously with the Closing.

(p)

No Litigation.  There is no Action pending against the Company or any Subsidiary
(or against any officer, director, employee or agent of the Company or any
Subsidiary in their capacity as such or relating to their employment, services
or relationship with the Company or any Subsidiary) before any Governmental
Authority, arbitrator or mediator, nor to the Knowledge of the Company, has any
such Action been threatened, which relates to the Merger or the consummation of
the transactions contemplated by this Agreement or that would otherwise be
reasonably expected to have a Material Adverse Effect on the Company.

(q)

Absence of Certain Changes.  No Material Adverse Effect related to the Company
shall have occurred since the date of this Agreement.

(r)

Amendment to Certificate.  The Certificate of Amendment contemplated in Section
5.13 shall have been filed with the Secretary of State of Delaware and shall
continue to be in full force and effect as of the First Effective Time.

(s)

Fiscal Year 2007 Financials.  The Company shall have provided to the Parent its
audited financials for the fiscal year ended June 30, 2007.

7.3

Additional Conditions to Obligations of the Company.  

The obligation of the Company to effect the Merger is subject to the
satisfaction 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 the
Parent, Interim Sub and Quintum Sub set forth in this Agreement that are
qualified by materiality shall be true and correct, and the representation and
warranties of Parent, Interim Sub and Quintum Sub set forth in this Agreement
that are not so qualified shall be true and correct in all material respects, in
each case as of the date of this Agreement and (except to the extent such
representations speak as of an earlier date) as of the Closing Date as though
made on and as of the Closing Date; and the Company shall have received a
certificate signed on behalf of Parent by an authorized officer of Parent to
such effect.

(b)

Performance of Obligations of Parent, Interim Sub and Quintum Sub.  Parent,
Interim Sub and Quintum Sub shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior to
the Closing Date; and the Company shall have received a certificate signed on
behalf of Parent by an authorized officer of Parent to such effect.

(c)

Absence of Certain Changes.  No Material Adverse Effect related to the Parent
shall have occurred since the date of this Agreement.

(d)

Tax Opinion.  The Company shall have received a legal opinion from Day Pitney
LLP (or other firm reasonably acceptable to the Company) that the merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code in
form and substance reasonably satisfactory to the Company and such firm shall
have received tax representation certificates from Parent and the Company in
form and substance reasonably satisfactory to such firm.

(e)

Good Standing Certificates.  The Company shall have received a certificate from
the Office of the Secretary of State of the State of Delaware and California
certifying that the Parent is in good standing and that all applicable taxes and
fees of the Parent through and including the date of such certificate (which
shall be no earlier than two (2) Business Days prior to the Closing Date) have
been paid.  The Company shall have received a certificate from the Office of the
Secretary of State of the State of Delaware certifying that the Interim Sub and
Quintum Sub subsidiary are in good standing and that all applicable taxes and
fees of each such subsidiary through and including the date of such certificate
(which shall be no earlier than two (2) Business Days prior to the Closing Date)
have been paid.  

ARTICLE VIII
TERMINATION OF AGREEMENT

8.1

Termination by Mutual Consent.  

This Agreement may be terminated at any time prior to the First Effective Time
by the mutual written consent of Parent and the Company.

8.2

Unilateral Termination.

(a)

Either Parent or the Company, by giving written notice to the other, may
terminate this Agreement if a court of competent jurisdiction or other
Governmental Authority shall have issued a nonappealable final order, decree or
ruling or taken any other action, in each case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger or any other material
transaction contemplated by this Agreement.

(b)

Either Parent or the Company, by giving written notice to the other, may
terminate this Agreement if the Merger shall not have been consummated by 11:59
p.m. Pacific Time on January 31, 2008; provided, however, that the right to
terminate this Agreement pursuant to this Section 8.2(b) shall not be available
to any party whose breach of a representation or warranty or covenant made under
this Agreement by such party results in the failure of any condition set forth
in Article VII to be fulfilled or satisfied on or before such date.

(c)

Either Parent or the Company, by giving written notice to the other, may
terminate this Agreement at any time prior to the First Effective Time if the
other has committed a breach of (i) any of its representations and warranties
under  Article III or Article IV, as applicable, or (ii) any of its covenants
under Article V or Article VI, as applicable, such that if such breach, if not
cured on or prior to the Closing Date, it would result in the failure of any of
the conditions set forth in Article VII, as applicable, to be fulfilled or
satisfied; and such party has not cured such breach within ten (10) Business
Days after the party seeking to terminate this Agreement has given the other
party written notice of such breach and its intention to terminate this
Agreement pursuant to this Section 8.2(c) (provided, however, that no such cure
period shall be available or applicable to any such breach which by its nature
cannot be cured) provided, however, that the right to terminate this Agreement
under this Section 8.2(c) shall not be available to a party if the party is at
that time in material breach of this Agreement.

(d)

Parent, by giving written notice to the Company, may terminate this Agreement if
(i) the Company’s Board of Directors shall have for any reason recommended,
endorsed, accepted or agreed to an Alternative Transaction or shall have
resolved to do any of the foregoing, or (ii) if an inquiry, offer or proposal
for an Alternative Transaction shall have been made and the Company’s Board of
Directors in connection therewith does not within five (5) Business Days of
Parent’s request to do so reconfirm its approval and recommendation of this
Agreement and the transactions contemplated hereby and reject such Alternative
Transaction.

(e)

Parent, by giving written notice to the Company, may terminate this Agreement at
any time prior to such time that the Requisite Company Stockholder Consent is
received by the Company and provided to Parent.

(f)

Either Parent or Company, by giving written notice to the other party, may
terminate this Agreement if the total number of shares of Parent Common Stock
issued in the Merger would exceed 19.9% of the outstanding shares of the Parent
as of the Closing and either party after consultation with counsel, reasonably
determines that the issuance of Parent Common Stock to reduce the percentage
below 19.9% would disqualify the Merger as a plan of reorganization within the
meaning of Section 1.368-2(g) and 1.368-3(a) of the United States Treasury
Regulations..

8.3

Effect of Termination.  

In the event of termination of this Agreement as provided in Section 8.2, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Interim Sub, Quintum Sub or the Company or
their respective officers, directors, stockholders, member, managers or
affiliates; provided, however, that (i) the provisions of this Section 8.3
(Effect of Termination) and Article X (Miscellaneous) shall remain in full force
and effect and survive any termination of this Agreement and (ii) nothing herein
shall relieve any party hereto from liability in connection with any material
breach of any of such party’s representations, warranties or covenants contained
herein.

ARTICLE IX
SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION
AND REMEDIES; CONTINUING COVENANTS

9.1

Survival.  

(a)

If the Merger is consummated, the representations and warranties of the Company
contained in this Agreement, the Company Disclosure Schedule and the
certificates of the Company delivered pursuant to Section 7.2 shall survive the
Merger and remain in full force and effect, regardless of any investigation or
disclosure made by or on behalf of any of the parties to this Agreement, until
the Escrow Expiration Date; provided, however, that no right to indemnification
pursuant to Article IX in respect of any claim based upon any failure of a
representation or warranty that is set forth in a Notice of Claim delivered
prior to the applicable expiration date of such representation or warranty shall
be affected by the expiration of such representation or warranty; and provided,
further, that such expiration shall not affect the rights of any Parent
Indemnified Person under this Article IX or otherwise to seek recovery of
Damages arising out of any fraud, willful breach or intentional
misrepresentation by the Company until the expiration of the applicable statute
of limitations with respect thereto.  If the Merger is consummated, all
covenants of the parties (including the covenants set forth in Article V and
Article VI) shall expire and be of no further force or effect as of the First
Effective Time, except to the extent such covenants provide that they are to be
performed after the First Effective Time; provided, however, that no right to
indemnification pursuant to Article IX in respect of any claim based upon any
breach of a covenant shall be affected by the expiration of such covenant.  If
the Merger is consummated, the representations and warranties of Parent, Interim
Sub and Quintum Sub contained in this Agreement and the certificates of Parent
delivered pursuant to Section 7.3 shall expire and be of no further force or
effect as of the Escrow Expiration Date.

(b)

If the Merger is consummated, any claims for indemnification related to the
Patent Claim shall survive the First Effective Time and remain in full force and
effect, regardless of any investigation or disclosure made by or on behalf of
any of the parties to this Agreement, until the final resolution through a
binding settlement or final, non-appealable judgment with respect to the Patent
Claim  (“Patent Escrow Expiration Date”).

9.2

Agreement to Indemnify.

(a)

Indemnification by the Company Stockholders. Each Company Stockholder shall
severally (based on each such holder’s Pro Rata Share), and not jointly,
indemnify and hold harmless Parent and its officers, directors, agents,
Representatives, stockholders and employees, and each Person, if any, who
controls or may control Parent within the meaning of the Securities Act or the
Exchange Act (each hereinafter referred to individually as an “Parent
Indemnified Person” and collectively as “Parent Indemnified Persons”) from and
against any and all losses, reductions in value, costs, damages, Liabilities and
expenses, including reasonable attorneys’ fees, other professionals’ and
experts’ fees, costs of investigation and court costs (hereinafter collectively
referred to as “Damages”), directly or indirectly arising out of, resulting from
or in connection with:

(i)

any failure of any representation or warranty made by the Company in this
Agreement or the Company Disclosure Schedule, to be true and correct as of the
date of this Agreement and as of the Closing Date (as though such representation
or warranty were made as of the Closing Date rather than the date of this
Agreement, except in the case of any individual representation and warranty
which by its terms speaks only as of a specific date or dates);

(ii)

any failure of any certification, representation or warranty made by the Company
pursuant to Section 7.2 to be true and correct as of the date such certificate
is delivered to Parent;

(iii)

any breach of or default in connection with any of the covenants or agreements
made by the Company in this Agreement;

(iv)

any Company Merger Expenses not otherwise deducted from Total Consideration;

(v)

any inaccuracy in the Stockholder Spreadsheet;

(vi)

 any payments paid with respect to Dissenting Shares to the extent that such
payments, in the aggregate, exceed the value of the amounts that otherwise would
have been payable pursuant to Section 2.2(a)(iii) upon the exchange of
Dissenting Shares;

(vii)

any Action disclosed in the Company Disclosure Schedule; or

(viii)

the Patent Claim.

In determining the amount of any Damages in respect of the failure of any
representation or warranty to be true and correct, any materiality standard or
qualification (including a Material Adverse Effect qualification) contained in
such representation or warranty shall be disregarded.

(b)

Indemnification by the Parent.  Subject to the limits set forth in this Article
IX, from and after the Closing, the Parent agrees to indemnify, defend and hold
the Company Stockholders and their respective officers, directors, stockholders,
employees, agents and representatives (the “Company Indemnified Persons”)
harmless from and in respect of any and all Damages that they may incur arising
out of or due to (i) any breach of any representation or warranty of the Parent
contained in this Agreement; and (ii) any breach of any covenant of the Parent
contained in this Agreement; provided that  in no event will the Parent be
liable to indemnify the Company Indemnified Persons for money damages in an
aggregate amount in excess of the Escrow Amount.

9.3

Limitations.

(a)

If the Merger is consummated, in no event shall the total recovery of the Parent
Indemnified Parties for Damages pursuant to Section 9.2 exceed an amount equal
to the sum of the Escrow Amount and the Patent Escrow Amount, except in the case
of fraud, willful breach or intentional misrepresentation by the Company.

(b)

No indemnification claim may be made pursuant to this Article IX until the
Parent Indemnified Persons have Damages of $100,000 (the “Deductible”), after
which Parent shall be indemnified for all Damages up to the Escrow Amount and/or
Patent Escrow Amount, as applicable, in excess of the Deductible; provided,
however, that the Deductible shall not apply to Damages pursuant to Sections
9.2(a)(iv) through Section 9.2(a)(viii) or in the case of fraud, willful breach
or intentional misrepresentation by the Company.  

(c)

Except with respect to: (i) fraud, intentional misrepresentation or willful
breach; or (ii) any equitable remedy, including a preliminary or permanent
injunction or specific performance, the sole and exclusive remedy of Parent
Indemnified Persons and Company Indemnified Persons for damages for any matters
relating to this Agreement and any certificate or instrument delivered pursuant
hereto shall be the rights to indemnification set forth in this Article IX.

(d)

With respect to any Damages related to the Patent Claim, the Parent Indemnified
Parties shall first recover such Damages from the Patent Escrow Amount and then
from the Escrow Amount if the Patent Escrow Amount is not sufficient to pay all
Damages related to the Patent Claim.  Notwithstanding anything to the contrary
in this Agreement, any Damages arising under Sections 9.2(a)(i) through (vii)
shall be recoverable solely from the Escrow Amount, and Parent shall not be
entitled to recover Damages from the Patent Escrow Amount except as a result of
Damages resulting from the Patent Claim.

(e)

In the event any Damages related to a claim by Parent under this Agreement are
covered by any of the Company’s insurance policies, Buyer agrees to use
commercially reasonable efforts (which shall not include the commencement of
litigation) to seek recovery under such insurance and the amount of Damages
incurred by Parent for purposes of this Agreement shall be reduced by the amount
Parent recovers from any insurer (net of any costs of collecting such insurance
payment, including the amount of any co-payment or deductible and less that
portion of any premium increase in the next policy period of the applicable
insurance policy or replacement insurance policy that results directly from the
assertion of such claim, as determined by correspondence from the insurance
carrier or insurance broker to Parent, a copy which shall have been provided to
the Representative); provided that the filing of a claim with any insurer for
such Damages shall not delay (or prior to receipt of an amount from an insurer,
reduce) any payment due to Parent under this Article IX.

9.4

Notice of Claim.  

(a)

As used herein, the term “Claim” means a claim for indemnification under this
Article IX.  

(b)

Parent or the Representative may give notice of a Claim under this Agreement,
for Damages incurred by any Parent Indemnified Person or Company Indemnified
Persons, as applicable. The Parent or the Representative, as applicable, shall
give written notice of a Claim (a “Notice of Claim”) with respect to the Parent
Indemnified Persons, executed by an officer of Parent and delivered to the
Representative, and with respect to the Company Indemnified Persons, executed by
the Representative and delivered to the Parent, in each case after Parent or the
Representative becomes aware of the existence of any potential claim by for
indemnification under this Article IX, arising from or relating to:

(i)

Any matter specified in Section 9.2; or

(ii)

the assertion, whether orally or in writing, against Parent or any other Parent
Indemnified Person or any Company Indemnified Persons of a claim, demand, suit,
action, arbitration, investigation, inquiry or proceeding brought by a third
party against Parent or such other Parent Indemnified Person or any Company
Indemnified Persons, as applicable, (in each such case, a “Third-Party Claim”)
that is based on, arises out of or relates to any matter specified in
Section 9.2.

(c)

The period during which claims may be initiated (the “Claims Period”) for
indemnification from the Escrow Amount shall commence at the First Effective
Time and terminate on the Escrow Expiration Date;  provided, further,  that the
Claims Period for indemnification from and against Damages arising out of,
resulting from or in connection with the Patent Claim shall commence at the
First Effective Time (regardless of whether or not the Parent has provided a
Notice of Claim with respect to the Patent Claim) and terminate upon the Patent
Escrow Expiration Date.  Notwithstanding anything contained herein to the
contrary, any Claims for Damages related to the Patent Claim and any other
Claims specified in any Notice of Claim delivered to the Representative prior to
expiration of the applicable Claims Period with respect to facts and
circumstances existing prior to expiration of the applicable Claims Period shall
remain outstanding until such Claims for Damages have been resolved or
satisfied, notwithstanding the expiration of such Claims Period.  Until the
expiration of the applicable Claims Period, no delay on the part of Parent in
giving the Representative a Notice of Claim shall relieve the Company
Stockholders from any of its obligations under this Article IX unless (and then
only to the extent that) the Company Stockholders are materially prejudiced
thereby.

9.5

Defense of Third-Party Claims.

(a)

In the event any Parent Indemnified Persons may be entitled to indemnification
under this Article 9 based upon any Third Party Claim, Parent  agrees to
promptly provide to the Representative the Notice of Claim with respect to such
Third Party Claim, provided however that (i) the failure to give any such
notification will not affect the indemnification obligations of the Parent
Indemnified Persons hereunder except to the extent the Parent Indemnified
Persons have been actually prejudiced as a result of such failure, and (ii) as
to the Actions disclosed in the Company Disclosure Schedule, such notice shall
be deemed delivered by Parent to the Representative effective upon the Closing
with no further action by Parent.     The Representative shall have the right,
upon written notice to Parent (the “Defense Notice”) within thirty (30) days of
its receipt from Parent of the Notice of Claim, to assume the defense of such
Third Party Claim, on behalf of all Company Stockholders, with counsel selected
by the Representative and reasonably satisfactory to Parent, provided that prior
to such assumption, the Representative, on behalf of the Company Stockholders
immediately prior to the First Effective Time, unconditionally and irrevocably
acknowledge in writing their obligation to indemnify the Parent Indemnified
Persons in connection with any Damages arising from the Third Party Claim
(subject to the limitations set forth in this Article IX).  In the event that
the Representative assumes the defense of such Third Party Claim, (i) Parent and
the Company Stockholders will cooperate with and make available to the
Representative such assistance, personnel, witnesses and materials as the
Representative may reasonably request with the expenses to come from the Escrow
Amount, and (ii) Parent shall have the right to participate in the defense
assisted by counsel of its own choosing at Parent’s expense, provided that if
the Representative is not diligently conducting such defense or, in Parent’s
reasonable judgment (based on advice of counsel) a conflict of interest exists
in respect of such Third Party Claim, the reasonable fees and expenses of
Parent’s separate counsel shall be paid out of the Escrow Amount.
 Notwithstanding the foregoing, the Representative shall not have the right to
assume the defense of such Third Party Claim if after consultation with counsel
Parent determines that such Third Party Claim could reasonably be expected to
result in money Damages in excess of the Escrow Amount or the imposition of any
equitable remedy (including a preliminary or permanent injunction or specific
performance), grant of license rights or other non-monetary Claim. The
Representative shall not consent to any settlement of, or the entry of any
judgment arising from, any such Third Party Claim without the prior written
consent of the Parent, such consent not to be unreasonably withheld; provided
that Parent may withhold consent at its discretion as to any settlement that
would include any of the kinds of remedies set forth in the immediately
preceding sentence.

(b)

In the event any Company Indemnified Persons may be entitled to indemnification
under this Article 9 based upon any Third Party Claim, the Representative shall
provide the Parent a Notice of Claim promptly, provided however that failure to
give any such notification will not affect the indemnification obligations of
the Company Indemnified Persons hereunder except to the extent the Company
Indemnified Persons have been actually prejudiced as a result of such failure.
 The Parent shall have the right, upon written notice to the Representative
within thirty (30) days of its receipt from the Representative of the Claim
Notice, to assume the defense of such Third Party Claim,  with counsel selected
by the Parent and reasonably satisfactory to the Representative.  In the event
that the Parent assumes the defense of such Third Party Claim, the
Representative shall have the right to participate in the defense assisted by
counsel of its own choosing at the Representative’s expense, provided that if
the Parent is not diligently conducting such defense or, in the Representative’s
reasonable judgment (based on advice of counsel) a conflict of interest exists
in respect of such Third Party Claim, the reasonable fees and expenses of the
Representative’s separate counsel shall be paid by the Parent, subject to the
limitations set forth in this Article IX.  Parent shall not consent to any
settlement of, or the entry of any judgment arising from, any such Third Party
Claim without the prior written consent of the Representative, such consent not
to be unreasonably withheld.

9.6

Contents of Notice of Claim.  

Each Notice of Claim by Parent or the Representative given pursuant to
Section 9.4 shall contain the following information:

(a)

that Parent or another Parent Indemnified Person or the Company Indemnified
Persons has directly or indirectly incurred, paid or properly accrued or, in
good faith, believes it shall have to directly or indirectly incur, pay or
accrue, Damages in an aggregate stated amount arising from such Claim (which
amount may be an estimated amount and may include an amount of Damages that,
after consultation with counsel, Parent determines could reasonably be expected
to result from the facts giving rise to such Claim with respect to an action
brought against any Parent Indemnified Person or Company Indemnified Persons
under this Article IX); and

(b)

a brief description, in reasonable detail (to the extent reasonably available to
Parent or the Representative), of the facts, circumstances or events giving rise
to the alleged Damages based on good faith belief thereof, including the
identity and address of any third-party claimant (to the extent reasonably
available to Parent or the Representative) and copies of any formal demand or
complaint, the amount of Damages (to the extent known), or the basis for such
anticipated liability, and the specific nature of the breach to which such item
is related.

9.7

Resolution of Notice of Claim.  

Each Notice of Claim given by Parent or the Representative shall be resolved as
follows:

(a)

If the Representative shall have consented in writing, on behalf of all Company
Stockholders, to the recovery by the Parent Indemnified Person of the full
amount of Damages specified in the Notice of Claim in accordance with this
Article IX, then Parent shall be entitled to deduct from the Escrow Amount the
amount set forth in the Notice of Claim.  For purposes of deductions from the
Escrow Amount pursuant to this Article IX, the Parent Common Stock shall be
valued at the Average Parent Stock Price as defined with respect to such source
of remedy regardless of the actual trading price of the Parent Common Stock on
the date of such deduction. If the Parent shall have consented in writing to the
recovery by the Company Indemnified Persons of the full amount of Damages
specified in the Notice of Claim in accordance with this Article IX, then the
Parent shall pay as soon as reasonably practicable the full amount of Damages
set forth in the Notice of Claim.

(b)

If the Representative shall not have consented in writing, on behalf of all
Company Stockholders, to the recovery by the Parent Indemnified Person of the
full amount of Damages specified in the Notice of Claim in accordance with this
Article IX within the ten (10) Business Days after a Notice of Claim is received
by the Representative or the Parent shall not have consented in writing to the
recovery by the Company Indemnified Persons of the full amount of Damages
specified in the Notice of Claim in accordance with this Article IX within the
ten (10) Business Days after a Notice of Claim is received by the Parent, then
Parent and the Representative shall attempt in good faith for thirty (30)
Business Days thereafter to resolve such objection.  If Parent and the
Representative shall so agree, a memorandum setting forth such agreement shall
be prepared and signed by both parties.  

(c)

If no such agreement can be reached after good faith negotiation, either Parent
or the Representative may, by written notice to the other, demand arbitration of
the matter unless the amount of the damage or loss is at issue in pending
litigation with a third party, in which event arbitration shall not be commenced
until such amount is ascertained or both parties agree to arbitration; and in
either such event the matter shall be settled by arbitration conducted by three
arbitrators.  Within fifteen (15) days after such written notice is sent, Parent
(on the one hand) and the Representative (on the other hand) shall each select
one arbitrator, and the two arbitrators so selected shall select a third
arbitrator.  In the event either party fails to name an arbitrator within the
time specified herein, the matter may be determined by a single arbitrator named
by the American Arbitration Association at the request of the party who did name
an arbitrator.  The decision of the arbitrators as to the validity and amount of
any claim in any disputed Notice of Claim shall be binding and conclusive upon
the parties to this Agreement, and Parent shall be entitled to act in accordance
with such decision and make or withhold payments out of the Escrow Amount and/or
Patent Escrow Amount in accordance with such decision.

(d)

Judgment upon any award rendered by the arbitrators may be entered in any court
having jurisdiction.  Any such arbitration shall be held in Washington D.C.
under the commercial rules then in effect of the American Arbitration
Association.

9.8

Release of Remaining Escrow.

(a)

Within fifteen (15) Business Days following the Escrow Expiration Date, Escrow
Agent shall, pursuant to the Escrow Agreement, deliver to the Company
Stockholders at the address set forth in their respective Letters of Transmittal
or as otherwise provided to the Escrow Agent all of the remaining Escrow Amount
(if any) in excess of any portion of the Escrow Amount that is necessary to
satisfy all unresolved, unsatisfied or disputed claims for Damages specified in
any Notice of Claim delivered to the Representative before the Escrow Expiration
Date.  If any Claims are unresolved, unsatisfied or disputed as of the
expiration of the Claims Period, then the Escrow Amount shall not terminate as
to the disputed amount and the Escrow Agent shall retain possession and custody
of that portion of the Escrow Amount that equals the total maximum amount of
Damages then being claimed by Parent Indemnified Persons in all such unresolved,
unsatisfied or disputed Claims.  Once such Claims have been resolved, the Escrow
Agreement shall be terminated, the Escrow Amount shall be liquidated and the
Escrow Agent shall deliver to the Company Stockholders all of the remaining
Escrow Amount (if any) not required to satisfy such Claims.

(b)

Within fifteen (15) Business Days following the Patent Escrow Expiration Date,
Escrow Agent shall, pursuant to the Escrow Agreement, deliver to the Company
Stockholders at the address set forth in their respective Letters of Transmittal
or as otherwise provided to the Escrow Agent all of the remaining Patent Escrow
Amount (if any) after payment of all Damages related to the Patent Claim.

9.9

Tax Consequences of Indemnification Payments

.  All payments (if any) made to an Parent Indemnified Person pursuant to any
indemnification obligations under this Article IX will be treated as adjustments
to the purchase price for tax purposes and such agreed treatment will govern for
purposes of this Agreement, unless otherwise required by law.

9.10

Appointment of Representative.

(a)

By voting in favor of the Merger or participating in the Merger and accepting
the benefits thereof, each Company Stockholder shall be deemed to have approved
the designation of and designates the Representative as the representative of
the Company Stockholders and as the attorney-in-fact and agent for and on behalf
of each Company Stockholder with respect to claims for indemnification under
this Article IX, and the taking by the Representative of any and all actions and
the making of any decisions required or permitted to be taken by the
Representative under this Agreement, including the exercise of the power to:
 (a) give and receive notices and communications to or from Parent (on behalf of
itself of any other Parent Indemnified Person) and/or the Escrow Agent relating
to this Agreement, the Escrow Agreement or any of the transactions and other
matters contemplated hereby or thereby (except to the extent that this Agreement
expressly contemplates that any such notice or communication shall be given or
received by such holders individually); (b) authorize the release or delivery to
Parent of all or a portion of the Escrow Amount and Patent Escrow Amount  in
satisfaction of indemnification claims by Parent or any other Parent Indemnified
Person pursuant to this Article IX (including by not objecting to such claims);
(c) agree to, object to, negotiate, resolve, enter into settlements and
compromises of, demand arbitration or litigation of, and comply with orders of
arbitrators or courts with respect to, (i) indemnification claims by Parent or
any other Parent Indemnified Person pursuant to this Article IX or (ii) any
dispute between any Parent Indemnified Person and any such holder, in each case
relating to this Agreement; and (d) take all actions necessary or appropriate in
the judgment of the Representative for the accomplishment of the foregoing.  The
Representative shall have authority and power to act on behalf of each Company
Stockholder with respect to the disposition, settlement or other handling of all
claims under this Article IX and all rights or obligations arising under this
Article IX.  The Company Stockholders shall be bound by all actions taken and
documents executed by the Representative in connection with  this Article IX,
and Parent and other Parent Indemnified Persons shall be entitled to rely on any
action or decision of the Representative. The individual serving as the
Representative may be replaced from time to time by the holders of a majority in
interest of the Escrow Amount then on deposit with Parent upon not less than ten
days prior written notice to Parent.  No bond shall be required of the
Representative, and the Representative shall receive no compensation for his
services.  Notices or communications to or from the Representative shall
constitute notice to or from each of the Company Stockholders.

(b)

In performing the functions specified in this Agreement, the Representative
shall not be liable to any Company Stockholder in the absence of gross
negligence or willful misconduct on the part of the Representative.  Each
Company Stockholder shall severally (based on each such holder’s Pro Rata
Share), and not jointly, indemnify and hold harmless the Representative from and
against any loss, liability or expense incurred without gross negligence or
willful misconduct on the part of the Representative and arising out of or in
connection with the acceptance or administration of his duties hereunder,
including any out-of-pocket costs and expenses and legal fees and other legal
costs reasonably incurred by the Representative.  If not paid directly to the
Representative by the Company Stockholders, such losses, liabilities or expenses
may be recovered by the Representative from Escrow Amount otherwise
distributable to the Company Stockholders (and not distributed or distributable
to any Parent Indemnified Person or subject to a pending indemnification claim
of any Parent Indemnified Person) following the Escrow Expiration Date pursuant
to the terms hereof and of the Escrow Agreement, at the time of distribution,
and such recovery will be made from the Company Stockholders according to their
respective Pro Rata Shares.

ARTICLE X
MISCELLANEOUS

10.1

Governing Law

.  The internal laws of the State of Delaware, irrespective of its conflicts of
law principles, shall govern the validity of this Agreement, the construction of
its terms, and the interpretation and enforcement of the rights and duties of
the parties hereto.  Subject to Section 9.7(c), which provides for arbitration
of certain disputes, the parties hereto irrevocably submit to the exclusive
jurisdiction of the courts of the State of Delaware and the Federal courts of
the United States of America located within the State of Delaware, solely with
respect to the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in respect of
the transactions contemplated hereby and thereby, and hereby waive, and agree
not to assert, as a defense in any action, suit or proceedings for the
interpretation or enforcement hereof or thereof, that it is not subject thereto
or that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that venue thereof may not be appropriate or that
this Agreement or any such document may not be enforced in or by such courts,
and the parties hereto irrevocably agree that all claims with respect to such
action or proceeding shall be heard and determined in such a Delaware State or
Federal court.  The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of such
dispute and agree that mailing of process or other papers in connection with any
such action or proceeding in the manner provided in Section 10.9 or in such
other manner as may be permitted by Applicable Law, shall be valid and
sufficient service thereof.  With respect to any particular action, suit or
proceeding, venue shall lie solely in the State of Delaware.

10.2

Assignment; Binding Upon Successors and Assigns

.  This Agreement shall inure to the benefit of the successors and assigns of
Parent, including any successor to, or assignee of, all or substantially all of
the business and assets of Parent.  Except as set forth in the preceding
sentence, no party hereto may assign any of its rights or obligations hereunder
without the prior written consent of the other parties hereto.  This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.  Any assignment in violation of
this provision shall be void.

10.3

Severability

.  If any provision of this Agreement, or the application thereof, shall for any
reason and to any extent be invalid or unenforceable, then the remainder of this
Agreement and the application of such provision to other persons or
circumstances shall 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 shall
achieve, to the extent possible, the economic, business and other purposes of
the void or unenforceable provision.

10.4

Counterparts

.  This Agreement may be executed in any number of counterparts, each of which
shall be an original as regards any party whose signature appears thereon and
all of which together shall constitute one and the same instrument.  This
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all parties
reflected hereon as signatories.

10.5

Other Remedies

.  Except as otherwise expressly provided herein, any and all remedies herein
expressly conferred upon a party hereunder shall be deemed cumulative with and
not exclusive of any other remedy conferred hereby or by law on such party, and
the exercise of any one remedy shall not preclude the exercise of any other.
 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.  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.

10.6

Amendments and Waivers

.  Any term or provision of this Agreement may be amended, and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only by a writing signed by
the party to be bound thereby.  The waiver by a party of any breach hereof or
default in the performance hereof shall not be deemed to constitute a waiver of
any other default or any succeeding breach or default.  This Agreement may be
amended by the parties hereto as provided in this Section 10.6 at any time
before or after adoption of this Agreement by the Company Stockholders, but,
after such adoption, no amendment shall be made which by Applicable Law requires
the further approval of the Company Stockholders without obtaining such further
approval.  At any time prior to the First Effective Time, each of Company and
Parent, by action taken by its Board of Directors, may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations or
other acts of the other, (b) waive any inaccuracies in the representations and
warranties made to it contained herein or in any document delivered pursuant
hereto, and (c) waive compliance with any of the agreements or conditions for
its benefit contained herein.  No such waiver or extension shall be effective
unless signed in writing by the party against whom such waiver or extension is
asserted.  The failure of any party to enforce any of the provisions hereof
shall not be construed to be a waiver of the right of such party thereafter to
enforce such provisions.

10.7

Expenses

.  Except as expressly provided otherwise herein, whether or not the Merger is
successfully consummated, each party shall bear its respective legal,
accountants, and financial advisory fees and other expenses incurred with
respect to this Agreement, the Merger and the transactions contemplated hereby.

10.8

Attorneys’ Fees

.  Should suit be brought to enforce or interpret any part of this Agreement,
the prevailing party shall be entitled to recover, as an element of the costs of
suit and not as damages, reasonable attorneys’ fees to be fixed by the court
(including costs, expenses and fees on any appeal).  The prevailing party shall
be entitled to recover its costs of suit, regardless of whether such suit
proceeds to final judgment.

10.9

Notices

.  All notices and other communications required or permitted under this
Agreement shall be in writing and shall be either hand delivered in person, or
sent by nationally recognized express courier service.  Such notices and other
communications shall be effective upon receipt to the addresses listed below, or
such other addresses as any party may notify the other parties in accordance
with this Section 10.9.  Such notices and communications may alternatively be
sent by email, but in such case shall be effective only if and when a reply
email from an authorized officer of the recipient is obtained by the sender, and
such reply email specifically acknowledges effective receipt pursuant to this
Section 10.9.

If to Parent, Interim Sub or Quintum Sub:

Network Equipment Technologies, Inc.
6900 Paseo Padre Parkway
Fremont, California 94555,

Attention:  General Counsel
Fax No.:  (510) 574-4000

with further copy to:

Heller Ehrman LLP
333 Bush Street
San Francisco, CA 94104-2878
Attention: Timothy Hoxie
Fax No.:  (415) 772-6268

If to the Company:

Quintum Technologies, Inc.
71 James Way
Eatontown, NJ 07724
Attention:  Chief Executive Officer
Fax No.:  (732) 544-9119

with a copy to:

Day Pitney LLP
P.O. Box 1945
Morristown, NJ 07962-1945
Attention:  Michael T. Rave
Fax No.:  (973) 966-1015

If to the Representative:

Cheng T. Chen
c/o Quintum Technologies, Inc.
71 James Way
Eatontown, NJ 07724
Fax No.:  (732) 544-9119

10.10

Interpretation; Rules of Construction

.  When a reference is made in this Agreement to Exhibits, Sections or Articles,
such reference shall be to an Exhibit to, Section of or Article of this
Agreement, respectively, unless otherwise indicated.  The words “include”,
“includes” and “including” when used herein shall be deemed in each case to be
followed by the words “without limitation”.  The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.  The parties hereto agree that they
have been represented by legal 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 shall be construed against the party drafting such agreement or
document.

10.11

Third Party Beneficiary Rights

.  No provisions of this Agreement are intended, nor shall be interpreted, to
provide or create any third party beneficiary rights or any other rights of any
kind in any client, customer, employee, affiliate, stockholder, partner or any
party hereto or any other Person unless specifically provided otherwise herein
and, except as so provided, all provisions hereof shall be personal solely
between the parties to this Agreement, except that Article IX is intended to
benefit the Parent Indemnified Persons.

10.12

Public Announcement

.  Following the date hereof, Parent may issue such press releases, and make
such other public disclosures regarding the Merger, as it determines are
required or deems appropriate; provided that for any such press releases or
public disclosures prior to the First Effective Time, Parent shall provide a
copy of such press release or public disclosure to the Company for its review
and comment prior to its pubic disclosure.  The Company and Parent each confirm
that they have entered into the Mutual NDA and that, subject to the preceding
sentence, they are each bound by, and shall abide by, the provisions of such
Mutual NDA; provided, however, that Parent shall not be bound by such Mutual NDA
after the Closing.  If this Agreement is terminated, the Mutual NDA shall remain
in full force and effect, and all copies of documents containing confidential
information of a disclosing party shall be returned by the receiving party to
the disclosing party or be destroyed, as provided in the Mutual NDA.

10.13

Entire Agreement

.  This Agreement, the exhibits and schedules hereto, the Company Ancillary
Agreements, the Parent Ancillary Agreements and the Merger Sub Ancillary
Agreements constitute the entire understanding and agreement of the parties
hereto with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements or understandings, inducements or conditions, express
or implied, written or oral, between the parties with respect hereto other than
the Mutual NDA.  The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms hereof.

10.14

Waiver of Jury Trial

.  EACH OF PARENT , INTERIM SUB, QUINTUM SUB, THE COMPANY AND THE REPRESENTATIVE
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, INTERIM SUB OR QUINTUM SUB,
THE COMPANY AND THE REPRESENTATIVE IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement and Plan of
Merger as of the date first above written.

NETWORK EQUIPMENT TECHNOLOGIES, INC.

QUINTUM TECHNOLOGIES, INC.

By:

By:

Name:

Name:

Title:

Title:

SIBLEY ACQUISITION CORP.

REPRESENTATIVE

By:

______________________________________

(as Representative for purposes of Article IX)

Name:

Title:

QUINTUM LLC

By:

Name:

Title:

[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]