EXHIBIT
      10.5

    


    


    
      

      

    

    


     

      AGREEMENT
        AND PLAN OF MERGER

       

      among

       

      LIVEPERSON,
        INC.,

       

      KATO
        MERGERCO, INC.

       

      KASAMBA,
        INC.,

       

      and

       

      YOAV
        LEIBOVICH, AS STOCKHOLDERS’ REPRESENTATIVE

       

       

       

       

       

       

      Dated
        as
        of June 25, 2007

    

    


    


    
      

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    



    TABLE
      OF
      CONTENTS

     

    Page

    
      	
              I.

            	
              DEFINITIONS

            	
               

            	
              2

            
	 	
              SECTION
                1.01.

            	
              Certain
                Defined Terms

            	
              2

            
	 	
              SECTION
                1.02.

            	
              Construction

            	
              11

            
	 	 	 
	
              II.

            	
              THE
                MERGER; CONVERSION OF SECURITIES

            	
              12

            
	 	
              SECTION
                2.01.

            	
              The
                Merger; Effective Time of the Merger

            	
              12

            
	 	
              SECTION
                2.02.

            	
              Closing

            	
              12

            
	 	
              SECTION
                2.03.

            	
              Effect
                of the Merger; Certificate of Incorporation; Bylaws; Directors and
                Officers of Surviving Corporation

            	
              12

            
	 	
              SECTION
                2.04.

            	
              Merger
                Consideration; Conversion of Company Preferred Stock and Company
                Common
                Stock.

            	
              13

            
	 	
              SECTION
                2.05.

            	
              Exchange
                Procedures

            	
              16

            
	 	
              SECTION
                2.06.

            	
              Appraisal
                Rights

            	
              18

            
	 	
              SECTION
                2.07.

            	
              Fractional
                Shares

            	
              18

            
	 	
              SECTION
                2.08.

            	
              Lost,
                Stolen or Destroyed Certificates

            	
              18

            
	 	
              SECTION
                2.09.

            	
              Withholding
                Rights

            	
              19

            
	 	
              SECTION
                2.10.

            	
              Stock
                Transfer Books

            	
              19

            
	 	
              SECTION
                2.11.

            	
              Certain
                Adjustments

            	
              19

            
	 	
              SECTION
                2.12.

            	
              [Reserved.]

            	
              19

            
	 	
              SECTION
                2.13.

            	
              Net
                Balance Sheet Adjustment.

            	
              20

            
	 	
              SECTION
                2.14.

            	
              Other
                Provisions Relating to Parent Common Stock

            	
              21

            
	 	
              SECTION
                2.15.

            	
              Stockholders’
                Representative.

            	
              22

            
	 	 	 
	
              III.

            	
              REPRESENTATIONS
                AND WARRANTIES AS TO THE COMPANY

            	
              24

            
	 	
              SECTION
                3.01.

            	
              Organization
                and Qualification; Subsidiaries.

            	
              24

            
	 	
              SECTION
                3.02.

            	
              Certificate
                of Incorporation and Bylaws

            	
              24

            
	 	
              SECTION
                3.03.

            	
              Capitalization

            	
              24

            
	 	
              SECTION
                3.04.

            	
              Authority
                Relative to this Agreement

            	
              25

            
	 	
              SECTION
                3.05.

            	
              No
                Conflicts; Required Filings and Consents.

            	
              25

            
	 	
              SECTION
                3.06.

            	
              Permits;
                Compliance with Laws

            	
              26

            
	 	
              SECTION
                3.07.

            	
              Financial
                Statements.

            	
              27

            
	 	
              SECTION
                3.08.

            	
              Absence
                of Certain Changes or Events

            	
              27

            
	 	
              SECTION
                3.09.

            	
              Employee
                Matters.

            	
              28

            
	 	
              SECTION
                3.10.

            	
              Contracts

            	
              31

            
	 	
              SECTION
                3.11.

            	
              Litigation

            	
              32

            
	 	
              SECTION
                3.12.

            	
              Environmental
                Matters

            	
              32

            
	 	
              SECTION
                3.13.

            	
              Intellectual
                Property.

            	
              32

            
	 	
              SECTION
                3.14.

            	
              Taxes.

            	
              35

            
	 	
              SECTION
                3.15.

            	
              Insurance

            	
              39

            
	 	
              SECTION
                3.16.

            	
              Properties

            	
              39

            
	 	
              SECTION
                3.17.

            	
              Affiliates

            	
              39

            
	 	
              SECTION
                3.18.

            	
              Brokers

            	
              40

            
	 	
              SECTION
                3.19.

            	
              Certain
                Business Practices

            	
              40

            


    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	 	
              SECTION
                3.20.

            	
              Accounts
                Receivable

            	
              40

            
	 	
              SECTION
                3.21.

            	
              Customers
                and Suppliers

            	
              40

            
	 	
              SECTION
                3.22.

            	
              Grants,
                Incentives and Subsidies

            	
              40

            
	 	
              SECTION
                3.23.

            	
              Bank
                Accounts

            	
              40

            
	 	
              SECTION
                3.24.

            	
              Books
                and Records

            	
              41

            
	 	
              SECTION
                3.25.

            	
              Customer
                and Expert Listing

            	
              41

            
	 	
              SECTION
                3.26.

            	
              Privacy
                and Data Security

            	
              41

            
	 	
              SECTION
                3.27.

            	
              No
                Conflict with OFAC Laws

            	
              41

            
	 	
              SECTION
                3.28.

            	
              Representations
                Complete

            	
              41

            
	 	 	 
	
              IV.

            	
              REPRESENTATIONS
                AND WARRANTIES OF PARENT

            	
              42

            
	 	
              SECTION
                4.01.

            	
              Organization
                and Qualification; Subsidiaries

            	
              42

            
	 	
              SECTION
                4.02.

            	
              Capitalization.

            	
              42

            
	 	
              SECTION
                4.03.

            	
              Authority
                Relative to this Agreement

            	
              42

            
	 	
              SECTION
                4.04.

            	
              No
                Conflict; Required Filings and Consents.

            	
              43

            
	 	
              SECTION
                4.05.

            	
              SEC
                Filings.

            	
              43

            
	 	
              SECTION
                4.06.

            	
              Absence
                of Certain Changes or Events

            	
              43

            
	 	
              SECTION
                4.07.

            	
              Brokers

            	
              44

            
	 	
              SECTION
                4.08.

            	
              S-3
                Eligibility

            	
              44

            
	 	
              SECTION
                4.09.

            	
              Representations
                Complete

            	
              44

            
	
              V.

            	
              COVENANTS

            	
              44

            
	 	
              SECTION
                5.01.

            	
              Conduct
                of Business by the Company Pending the Closing

            	
              44

            
	 	
              SECTION
                5.02.

            	
              Notices
                of Certain Events

            	
              46

            
	 	
              SECTION
                5.03.

            	
              Access
                to Information; Confidentiality.

            	
              47

            
	 	
              SECTION
                5.04.

            	
              No
                Solicitation of Transactions

            	
              47

            
	 	
              SECTION
                5.05.

            	
              Further
                Action; Consents; Filings.

            	
              48

            
	 	
              SECTION
                5.06.

            	
              Certain
                Tax Matters.

            	
              48

            
	 	
              SECTION
                5.07.

            	
              Israeli
                Tax Rulings

            	
              50

            
	 	
              SECTION
                5.08.

            	
              Israel
                Securities Exemption

            	
              51

            
	 	
              SECTION
                5.09.

            	
              Public
                Announcements

            	
              52

            
	 	
              SECTION
                5.10.

            	
              Exercise
                of Certain Outstanding Company Stock Options

            	
              52

            
	 	
              SECTION
                5.11.

            	
              Trading
                Restriction Agreements Legend

            	
              52

            
	 	
              SECTION
                5.12.

            	
              Directors
                and Officers Insurance

            	
              52

            
	 	
              SECTION
                5.13.

            	
              OptionholderWaiver
                Letters

            	
              53

            
	 	
              SECTION
                5.14.

            	
              Withholding
                Instructions

            	
              53

            
	 	
              SECTION
                5.15.

            	
              Registration
                Statement on Form S-8

            	
              53

            
	
              VI.

            	
              STOCK
                MATTERS

            	
              53

            
	 	
              SECTION
                6.01.

            	
              Required
                Registration

            	
              53

            
	 	
              SECTION
                6.02.

            	
              Registration
                Procedures.

            	
              54

            
	 	
              SECTION
                6.03.

            	
              Transfer
                of Shares

            	
              57

            
	 	
              SECTION
                6.04.

            	
              Restricted
                Securities, Stock Certificate Legend

            	
              58

            
	 	
              SECTION
                6.05.

            	
              Reservation
                of Stock

            	
              58

            
	 	
              SECTION
                6.06.

            	
              No
                Stockholder Rights

            	
              58

            
	 	
              SECTION
                6.07.

            	
              Compliance
                with Law or Stock Exchange

            	
              58

            


    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	
              VII.

            	
              CONDITIONS
                PRECEDENT

            	
              59

            
	 	
              SECTION
                7.01.

            	
              Conditions
                Precedent to the Obligations of Each Party

            	
              59

            
	 	
              SECTION
                7.02.

            	
              Conditions
                Precedent to the Obligation of the Parent

            	
              59

            
	 	
              SECTION
                7.03.

            	
              Conditions
                Precedent to the Obligations of the Company

            	
              62

            
	 	 	 
	
              VIII.

            	
              INDEMNIFICATION

            	
              63

            
	 	
              SECTION
                8.01.

            	
              Survival
                of Representations and Warranties

            	
              63

            
	 	
              SECTION
                8.02.

            	
              [Reserved.]

            	
              64

            
	 	
              SECTION
                8.03.

            	
              General
                Indemnity.

            	
              64

            
	 	
              SECTION
                8.04.

            	
              Conditions
                of Indemnification

            	
              65

            
	 	
              SECTION
                8.05.

            	
              Threshold
                for Damages

            	
              66

            
	 	
              SECTION
                8.06.

            	
              Escrow
                Funds

            	
              66

            
	 	
              SECTION
                8.07.

            	
              Exclusive
                Remedy

            	
              66

            
	 	 	 
	
              IX.

            	
              TERMINATION
                AND ABANDONMENT

            	
              67

            
	 	
              SECTION
                9.01.

            	
              Termination

            	
              67

            
	 	
              SECTION
                9.02.

            	
              Procedure
                and Effect of Termination

            	
              68

            
	 	 	 
	
              X.

            	
              MISCELLANEOUS

            	
              68

            
	 	
              SECTION
                10.01.

            	
              Expenses,
                Etc.

            	
              68

            
	 	
              SECTION
                10.02.

            	
              Notices

            	
              68

            
	 	
              SECTION
                10.03.

            	
              Waivers

            	
              70

            
	 	
              SECTION
                10.04.

            	
              Amendments,
                Supplements, Etc

            	
              70

            
	 	
              SECTION
                10.05.

            	
              Governing
                Law; Submission to Jurisdiction

            	
              71

            
	 	
              SECTION
                10.06.

            	
              Waiver
                of Jury Trial

            	
              71

            
	 	
              SECTION
                10.07.

            	
              Headings;
                Interpretation

            	
              71

            
	 	
              SECTION
                10.08.

            	
              Counterparts

            	
              71

            
	 	
              SECTION
                10.09.

            	
              Entire
                Agreement

            	
              71

            
	 	
              SECTION
                10.10.

            	
              Binding
                Effect; Benefits

            	
              71

            
	 	
              SECTION
                10.11.

            	
              Assignability

            	
              72

            
	 	
              SECTION
                10.12.

            	
              Severability

            	
              72

            


    

    


    
      	
              EXHIBITS

            	 
	 	 
	
              Exhibit
                A

            	
              Form
                of Escrow Agreement

            
	
              Exhibit
                B

            	
              Form
                of Employment Agreement

            
	
              Exhibit
                C

            	
              Form
                of Opinion of U.S. Counsel to the Company

            
	
              Exhibit
                D

            	
              Form
                of Opinion of Israeli Counsel to the Company

            
	
              Exhibit
                E

            	
              Form
                of Trading Restriction Agreement

            
	
              Exhibit
                F

            	
              Form
                of Lock-Up Agreement

            
	 	 
	
              SCHEDULES

            	 
	 	 
	
              Schedule
                I

            	
              Principal
                Stockholders

            
	
              Schedule
                II

            	
              Options
                Being Exercised Immediately Prior to the Effective Time

            
	
              Schedule
                III

            	
              Distribution
                Table

            


    

    


    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    


    AGREEMENT
      AND PLAN OF MERGER

     

    AGREEMENT
      AND PLAN OF MERGER,
      dated
      as of June 25, 2007 (the “Agreement”),
      among
      LIVEPERSON, INC., a Delaware corporation (“Parent”);
      Kato
      MergerCo, Inc., a Delaware corporation and an indirect subsidiary of Parent
      (“Merger
      Sub”);
      KASAMBA, INC., a Delaware corporation (the “Company”);
      and
      Yoav Leibovich (the “Stockholders’
      Representative”)
      as
      agent and attorney-in-fact for each stockholder of the Company (individually,
      a
“Stockholder”
and
      collectively, the “Stockholders”).

     

    RECITALS

     

    WHEREAS,
      the boards of directors of each of Parent, the Company and Merger Sub believe
      it
      is advisable, fair to and in the best interests of their respective corporations
      and their stockholders that the Company and Merger Sub combine into a single
      corporation through the statutory merger of Merger Sub with and into the Company
      (the “Merger”)
      and,
      in furtherance thereof, have approved the Merger, this Agreement and the
      transactions contemplated hereby and the board of directors of the Company
      has
      determined to recommend that its stockholders adopt this Agreement;


     

    WHEREAS,
      as a condition to the Closing, the requisite majority of the holders of Company
      Common Stock (as defined below) and of Company Preferred Stock (as defined
      below) shall have approved the Merger, this Agreement and the transactions
      contemplated hereby;

     

    WHEREAS,
      pursuant to the Merger, the Company Common Stock and the Company Preferred
      Stock
      shall be converted into the right to receive cash and Parent Common Stock (as
      defined below) in the amounts, on the terms and subject to the conditions set
      forth herein;

     

    WHEREAS,
      pursuant to the Merger, each vested and unvested option to purchase shares
      of
      Company Common Stock under any Company Option Plan which
      is
      outstanding and unexercised immediately prior to the Effective Time, shall
      be
      assumed by Parent, and the Company Options shall be converted into an option
      to
      purchase shares of Parent Common Stock in such number, at such exercise price
      and on the terms and
      subject to the conditions set forth herein;

     

    WHEREAS,
      Parent, Merger Sub, the Company and the Stockholders’ Representative desire to
      make certain representations and warranties and other agreements in connection
      with the Merger; and

     

    WHEREAS,
      as a condition and inducement to Parent and Merger Sub entering into this
      Agreement, each Founder (as defined below), concurrently with the execution
      and
      delivery of this Agreement, is entering into an employment agreement in the
      form
      of Exhibit
      B
      hereto
      (the “Employment
      Agreement”),
      dated
      as of the date of this Agreement, which shall be subject to the consummation
      of
      the Merger and shall become effective at the Effective Time (as defined
      below);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    I.

     

    DEFINITIONS

     

    SECTION
      1.01. Certain
      Defined Terms.
      Unless
      the context otherwise requires, the following terms, when used in this
      Agreement, shall have the respective meanings specified below (such meanings
      to
      be equally applicable to the singular and plural forms of the terms
      defined):

     

    “Accounting
      Referee”
      has the
      meaning set forth in Section 2.13(b).

     

    “Affiliate”
      means,
      with respect to any Person, any other Person that controls, is controlled by
      or
      is under common control with the first Person.

     

    “Aggregate
      Merger Consideration”
      has the
      meaning set forth in Section 2.04(a).

     

    “Agreement”
      has the
      meaning set forth in the preamble hereto.

     

    “Assets”
      means
      all the properties, assets and contract rights (including, without limitation,
      cash, cash equivalents, accounts receivable, inventory, equipment, office
      furniture and furnishings, trade names, trademarks and patents, contracts,
      agreements, licenses and real estate) of the Company, whether tangible or
      intangible, real, personal or mixed.

     

    “Benefit
      Plan”
      means
      any “employee benefit plan” as defined in ERISA Section 3(3), whether or
      not subject to ERISA, Section 102 Plans, and any other employee benefit plan,
      policy, arrangement or individual agreement, sponsored, maintained or
      contributed to by the Company on behalf of any employee, officer, director,
      stockholder or service provider of the Company (whether current, former or
      retired) or their beneficiaries or with respect to which the Company has or
      could reasonably be expected to have any obligation or liability.

     

    “Blocked
      Period”
      has the
      meaning set forth in Section 6.02(c).

     

    “Business
      Day”
      means a
      day other than a Saturday, Sunday or other day on which banks located in New
      York, New York or Tel Aviv, Israel are authorized or required by law to
      close.

     

    “Cash
      Escrow Amount”
      means
      Seven Million Dollars ($7,000,000) to be deposited with the Escrow Agent to
      be
      held in escrow subject to the terms and conditions of the Escrow Agreement.
      

     

    “Cash
      Merger Consideration”
      means
      Nine Million Dollars ($9,000,000).

     

    “Certificate
      of Merger”
      has the
      meaning set forth in Section 2.01.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Certificates”
      has the
      meaning set forth in Section 2.05.

     

    “Charter
      Amendment”
means
      an amendment to the Amended and Restated Certificate of Incorporation of the
      Company, which allows for the distribution of the Aggregate Merger Consideration
      in the manner contemplated by the Distribution Table.

     

    “Closing”
      has the
      meaning set forth in Section 2.02.

     

    “Closing
      Date”
      has the
      meaning set forth in Section 2.02.

     

    “Closing
      Date Balance Sheet”
      has the
      meaning set forth in Section 2.13(b).

     

    “Closing
      Price”
      shall be
      equal to the closing
      stock price of a share of Parent
      Common Stock on the Nasdaq Capital Market as reported in The
      Wall Street Journal
      or, if
      not available, such other authoritative publication as may be reasonably
      selected by the Parent, on the trading date two Business Days preceding the
      Closing Date.

     

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

     

    “Company”
      has the
      meaning set forth in the preamble hereto.

     

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

     

    “Company
      Common Stock”
      has the
      meaning set forth in Section 3.03.

     

    “Company
      Disclosure Schedule”
      means
      the disclosure schedule delivered by the Company to the Parent prior to the
      execution of this Agreement and forming a part hereof.

     

    “Company
      Financial Statements”
      has the
      meaning set forth in Section 3.07(a).

     

    “Company
      Intellectual Property”
      means
      all patents (including, without limitation, all U.S. and foreign patents, patent
      applications, patent disclosures, and any and all divisions, continuations,
      continuations-in-part, reissues, re-examinations and extensions thereof), design
      rights, trademarks, trade names and service marks (whether or not registered),
      trade dress, Internet domain names, copyrights (whether or not registered)
      and
      any renewal rights therefor, sui
      generis
      database
      rights, statistical models, technology, inventions, supplier lists, trade
      secrets, know-how, computer software programs or applications in both source
      and
      object code form, databases, technical documentation of such software programs,
      registrations and applications for any of the foregoing and all other tangible
      or intangible proprietary information or materials that were material to the
      Company’s business or are currently used in the Company’s business in any
      product, technology or process (i) currently being or formerly manufactured,
      published or marketed by the Company or (ii) previously or currently under
      development for possible future manufacturing, publication, marketing or other
      use by the Company.

     

    “Company
      Licensed Intellectual Property”
      has the
      meaning set forth in Section 3.13(b).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Company
      Material Adverse Effect”
      means
      any change in or effect on (i) the business of the Company that, individually
      or
      in the aggregate (taking into account all other such changes or effects), is,
      or
      is reasonably likely to be, materially adverse to the business, assets,
      liabilities, financial condition, results of operations or prospects of the
      Company, or (ii) the ability of the Company to perform its obligations under
      this Agreement and any other Transaction Document to which it is a party or
      to
      consummate the Merger or the other transactions contemplated by this Agreement
      or any other Transaction Document to which it is a party, in each case, other
      than any such change or effect resulting from (1) conditions generally affecting
      (A) the Internet industry or (B) the economy, the financial or securities
      markets in general, or political conditions in the United States or Israel,
      (2)
      any acts of terrorism, military actions or war or other force majeure events,
      or
      (3) the announcement of, and the pendency of, this Agreement and the
      transactions contemplated hereby; provided,
      however,
      in the
      case of clauses (1) and (2) above, such change or effect will constitute a
      Company Material Adverse Effect only if it has a disproportionate material
      adverse effect on the Company.

     

    “Company
      Options”
      has the
      meaning set forth in Section 2.04(e).

     

    “Company
      Option Plans”
      means
      the Company’s 2003 Israeli Share Option Plan adopted by the Company’s Board of
      Directors on November 25, 2003 and the Company’s 2004
      Israeli Share Option Plan adopted
      by the Company’s Board of Directors on November 29, 2004, each as in effect as
      of the date hereof or as such plan may be amended pursuant to the terms of
      this
      Agreement (provided that
      with
      respect to those employees, consultants or directors whose consent is required
      in connection with such amendments and who do not so consent, such amendments
      requiring consent for which consent is not so obtained will not apply to such
      non-consenting employees, consultants or directors).

     

    “Company
      Permits”
      has the
      meaning set forth in Section 3.06.

     

    “Company
      Preferred Stock”
      has the
      meaning set forth in Section 3.03.

     

    “Company
      Software Programs” has
      the
      meaning set forth in Section 3.13(f).

     

    “Company
      Subsidiary”
      has the
      meaning set forth in Section 3.01(b).

     

    “Competing
      Transaction”
      means
      any of the following involving the Company (other than the transactions
      contemplated by this Agreement):

     

    (i) any
      merger, consolidation, share exchange, business combination or other similar
      transaction involving 20% or more of the Assets of the Company and its
      Subsidiaries, taken as a whole or 20% or more of the outstanding voting
      securities of the Company;

     

    (ii) any
      sale,
      lease, exchange, mortgage, pledge, transfer or other disposition of 20% or
      more
      of the Assets of the Company and its Subsidiaries, taken as a whole, in a single
      transaction or series of transactions; 

     

    (iii) any
      Person having acquired beneficial ownership or the right to acquire beneficial
      ownership of, or any “group” (as such term is defined under Section 13(d)
      of the Exchange Act) having been formed that beneficially owns or has the right
      to acquire beneficial ownership of, 20% or more of the outstanding voting
      securities of the Company; or

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (iv) any
      public announcement of a proposal, plan or intention to do any of the foregoing
      or any agreement to engage in any of the foregoing.

     

    “Confidentiality
      Agreement”
      means
      the confidentiality agreement dated March 2, 2007 between the Parent
      and the Company.

     

    “Contracts”
means,
      with respect to any Person, all agreements, undertakings, contracts,
      obligations, arrangements, promises, understandings and commitments (whether
      written or oral and whether express or implied) to which such Person is a
      party.

     

    “Corporation”
      has the
      meaning set forth in Section 2.03.

     

    “Damages”
      has the
      meaning set forth in Section 8.03.

     

    “Defaulting
      Party”
      has the
      meaning set forth in Section 9.01(b).

     

    “DGCL”
      has the
      meaning set forth in Section 2.01.

     

    “Dissenting
      Shares”
      has the
      meaning set forth in Section 2.06.

     

    “Distribution
      Table” means
      the
      table attached hereto as Schedule III which sets forth the allocation of the
      Merger Consideration among the Stockholders and the holders of Company Options.
      The Distribution Table is expected to be substantially similar to the Merger
      Consideration Allocation Certificate to be delivered at the Closing, except
      for
      changes to the Company’s capitalization caused by the exercise or forfeiture of
      outstanding options and payments, if any, to be made in accordance with Section
      2.05(a)(i).

     

    “$”
      means
      United States Dollars.

     

    “Effective
      Time”
      has the
      meaning set forth in Section 2.01.

     

    “Employment
      Agreements”
      means
      those Employment Agreements with the Founders, executed as part of the
      transactions contemplated hereby.

     

    “Environmental
      Law”
      means
      any Law and any enforceable judicial or administrative interpretation thereof,
      including any judicial or administrative order, consent decree or judgment,
      relating to pollution or protection of the environment or natural resources,
      including, without limitation, those relating to the use, handling,
      transportation, treatment, storage, disposal, release or discharge of Hazardous
      Material, as in effect as of the date hereof.

     

    “Environmental
      Permit”
      means
      any permit, approval, identification number, license or other authorization
      required under or issued pursuant to any applicable Environmental
      Law.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

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

     

    “Escrow
      Agent”
      means a
      reputable escrow agent to be appointed by Parent, subject to the approval of
      the
      Company, which approval shall not unreasonably be withheld.

     

    “Escrow
      Agreement”
      means
      the Escrow Agreement substantially in the form attached hereto as Exhibit
      A
      to be
      entered into as of the Closing among the Parent, the Stockholders and the Escrow
      Agent.

     

    “Escrow
      Tax Ruling”
      has the
      meaning set forth in Section 5.07(c).

     

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

     

    “Exchange
      Ratio”
means
      a
      fraction, (X) the numerator of which is $40,000,000 divided by the Trailing
      Signing Average Price, and (Y) the denominator of which is the number of shares
      of capital stock of the Company on a fully-diluted basis.

     

    “Expenses”
      means,
      with respect to any party hereto, all out-of-pocket expenses (including, without
      limitation, all fees and expenses of counsel, accountants, investment bankers,
      experts and consultants to a party hereto and its Affiliates) incurred by such
      party or on its behalf in connection with or related to the authorization,
      preparation, negotiation, execution and performance of its obligations pursuant
      to this Agreement and the consummation of the transactions contemplated by
      this
      Agreement, and all other matters related to the transactions contemplated
      hereby.

     

    “Final
      Closing Balance Sheet”
      has the
      meaning set forth in Section 2.13(b).

     

    “Founders”
      means
      Inon Axel and Arthur Fuhrer.

     

    “GAAP”
      means
      generally accepted accounting principles in the United States of America as
      in
      effect as of the date hereof.

     

    “Governmental
      Entity”
      means
      any United States Federal, state or local or any foreign governmental,
      regulatory or administrative authority, agency or commission or any court,
      tribunal or arbitral body.

     

    “Governmental
      Order”
      means
      any order, writ, judgment, injunction, decree, stipulation, determination or
      award entered by or with any Governmental Entity.

     

    “Grants”
      has the
      meaning set forth in Section 3.24.

     

    “Hazardous
      Material”
      means
      (i) any petroleum, petroleum products, by-products or breakdown products,
      radioactive materials, asbestos-containing materials or polychlorinated
      biphenyls or (ii) any chemical, material or substance defined or regulated
      as
      toxic or hazardous or as a pollutant or contaminant or waste under any
      applicable Environmental Law.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Initial
      Merger Consideration”
      has the
      meaning set forth in Section 2.04(a).

     

    “Initial
      Release Date” means
      the
      date one year following the Closing Date.

     

    “Intellectual
      Property”
      means
      (a) trade secrets, inventions, know-how and processes, (b) patents
      (including all reissues, divisions, continuations and extensions thereof) and
      patent applications, (c) trademarks, trademark registrations, trademark
      applications, service marks, service mark registrations and service mark
      applications, (d) copyright registrations and copyright applications, and
      (e) domain names.

     

    “IRS”
      means
      the United States Internal Revenue Service.

     

    “ISA”
means
      the Israel Securities Authority established pursuant to the Israel Securities
      Law.

     

    “Israel
      Securities Law”
means
      the Israel Securities Law, 1968. 

     

    “Israeli
      Employees” has
      the
      meaning set forth in Section 3.09(j).

     

    “Israeli
      Escrow Tax Ruling”
      has the
      meaning set forth in Section 5.07(c).

     

    “Israeli
      Options Tax Ruling”
      has the
      meaning set forth in Section 5.07(a).

     

    “Israeli
      Securities Exemption”
      has the
      meaning set forth in Section 5.08.

     

    “Israeli
      Tax Code”
means
      the Israeli Income Tax Ordinance (New Version) - 1961 and the rules promulgated
      in connection therewith, as amended.

     

    “Israeli
      Tax Rulings” has
      the
      meaning set forth in Section 5.07(c).

     

    “Israeli
      Withholding Tax Ruling”
      has the
      meaning set forth in Section 5.07(b).

     

    “ITA”
means
      the Israel Tax Authority.

     

    “Knowledge”
      and
      words of similar import mean, with respect to the Company, the actual knowledge,
      after reasonable inquiry, of any executive officer of the Company and, with
      respect to Parent, the actual knowledge, after reasonable inquiry, of Robert
      LoCascio or Timothy E. Bixby.

     

    “Law”
      means
      any Federal, state, foreign or local statute, law, ordinance, regulation, rule,
      code, order, judgment, decree, other requirement or rule of law of the United
      States or any other jurisdiction, and any other similar act or law.

     

    “Liability”
      means
      any and all claims, debts, liabilities, obligations and commitments of whatever
      nature, whether asserted or reasonably expected to be asserted, fixed, absolute
      or contingent, matured or unmatured, accrued or unaccrued, liquidated or
      unliquidated or due or to become due, and whenever or however arising (including
      those arising out of any Contract or tort, whether based on negligence, strict
      liability or otherwise) regardless of whether the same would be required by
      GAAP
      to be reflected as a liability in financial statements or disclosed in the
      notes
      thereto.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    “License
      Agreement”
      has the
      meaning set forth in Section 3.13(b).

     

    “Lien”
      means
      any charge, claim, community property interest, condition, easement, covenant,
      contract, commitment, warrant, demand, encumbrance, equitable interest, lien,
      mortgage, option, purchase right, pledge, security interest, right of first
      refusal, or other rights of third parties or restriction of any kind, including
      without limitation any restriction on use, voting, transfer, receipt of income,
      or exercise of any other attribute of ownership.

     

    “Lock-up
      Agreements”
means
      those Lock-up Agreements between the Parent and the Founders substantially
      in
      the form of Exhibit F hereto, executed as part of the transactions contemplated
      hereby.

     

    “Material
      Contract”
      and
“Material
      Contracts”
      have the
      meaning set forth in Section 3.10.

     

    “Merger”
      has the
      meaning set forth in Section 2.01.

     

    “Merger
      Consideration Allocation Certificate”
      has the
      meaning set forth in Section 2.04(g).

     

    “Net
      Balance Sheet Adjustment”
has
      the
      meaning set forth in Section 2.04(a).

     

    “Net
      Working Capital”
      means
      (X) total consolidated assets of the Company and the Company
      Subsidiary as of the Effective Time, (Y) minus total consolidated liabilities
      of
      the Company and the Company Subsidiary as of the Effective Time, (Z) plus the
      amount specifically reserved on the audited consolidated balance sheet of the
      Company at December 31, 2006 in respect of the U.S. Withholding Liability,
      unless such reserve amount is changed in the preparation of the Final Closing
      Balance Sheet, in which case the actual reserve amount with regard to the U.S.
      Withholding Liability will be utilized. As used in this definition, the term
      U.S. Withholding Liability shall exclude “Damages.”

     

    “Net
      Working Capital Certificate”
      has the
      meaning set forth in Section 2.13(a).

     

    “Organizational
      Documents”
      has the
      meaning set forth in Section 3.02.

     

    “Parent”
      has the
      meaning set forth in the preamble hereto.

     

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

     

    “Parent
      Indemnified Group”
      has the
      meaning set forth in Section 8.03(a).

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    “Parent
      Material Adverse Effect”
      means
      any change in or effect on the business of the Parent that, individually or
      in
      the aggregate (taking into account all other such changes or effects), is,
      or is
      reasonably likely to be, materially adverse to (i) the business, assets,
      liabilities, financial condition or results of operations of the Parent, or
      (ii)
      the ability of the Parent to perform its obligations under this Agreement and
      any other Transaction Document to which it is a party or to consummate the
      Merger or the other transactions contemplated by this Agreement or any other
      Transaction Document to which it is a party, in each case, other than any such
      change or effect resulting from (1) conditions generally affecting the economy,
      the financial or securities markets in general, or political conditions in
      the
      United States or Israel, (2) any acts of terrorism, military actions or war
      or
      other force majeure events, or (3) the announcement of, and the pendency of,
      this Agreement and the transactions contemplated hereby; provided,
      however,
      in the
      case of clauses (1) and (2) above, such change or effect will constitute a
      Parent Material Adverse Effect if it has a disproportionate material adverse
      effect on the Parent.

     

    “Parent
      SEC Documents”
      has the
      meaning set forth in Section 4.05(a).

     

    “Parent
      Subsidiaries”
      has the
      meaning set forth in Section 4.01.

     

    “Paying
      Agent” has
      the
      meaning set forth in Section 2.05(a).

     

    “Per
      Share Merger Consideration”
means
      the Initial Merger Consideration divided by the number of shares of capital
      stock of the Company on a fully diluted basis. 

     

    “Person”
      means an
      individual, corporation, partnership, private company, limited partnership,
      limited liability company, limited liability partnership, syndicate, person
      (including, without limitation, a “person” as defined in Section 13(d)(3)
      of the Exchange Act), trust, association, entity or government or political
      subdivision, agency or instrumentality of a government.

     

    “Principal
      Stockholder” means
      each
      of
      the persons or entities listed on Schedule I
      hereto.
      “Principal
      Stockholders” means
      each of the persons or entities listed on Schedule I
      hereto,
      collectively.

     

    “Privacy
      Laws”
      has the
      meaning set forth in Section 3.25.

     

    “Record
      Date”
      has the
      meaning set forth in Section 2.10.

     

    “Representatives”
      has the
      meaning set forth in Section 5.03(a).

     

    “Required
      Stockholder Consent”
has
      the
      meaning set forth in Section 7.01(d).

     

    “Re-Sale
      Registration Statement”
      has the
      meaning set forth in Section 6.01.

     

    “Rule
      144”
      has the
      meaning set forth in Section 6.01.

     

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

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    “SEC”
      means
      the United States Securities and Exchange Commission.

     

    “Section
      102 Plan”
means
      an incentive stock option plan intended to qualify under Section 102 of the
      Israeli Tax Code.

     

    “Shares”
      has the
      meaning set forth in Section 6.01.

     

    “Stock
      Escrow Amount”
      means
      766,871 shares of Parent Common Stock, which number of shares shall be deposited
      with the Escrow Agent to be held in escrow, subject to the terms and conditions
      of the Escrow Agreement. 

     

    “Stock
      Merger Consideration”
      means
      4,754,601 shares of Parent Common Stock, provided that the aggregate
      number of shares underlying the options to purchase Parent Common Stock issuable
      pursuant to Section 2.04(e) shall represent a portion of the Stock Merger
      Consideration,
      as more
      fully described in Section 2.04(e). In the event the Trailing Closing Average
      Price is less than $4.00 per share, and the parties hereto mutually agree to
      a
      different number of shares of Parent Common Stock pursuant to Section 9.01(e),
      then the number of shares of Parent Common Stock so mutually agreed upon shall
      constitute the Stock Merger Consideration. 

     

    “Stockholder”
      and
“Stockholders”
      have the
      meaning set forth in the preamble hereto.

     

    “Stockholder
      Representation Letter Agreements”
means
      the agreements executed by each Stockholder and the Parent whereby such
      Stockholder represents and covenants to certain matters relating to the
      transactions contemplated by the Transaction Documents.

     

    “Stockholders’
      Representative”
      has the
      meaning set forth in the preamble hereto and in Section 2.15(a).

     

    “Subsidiary”
      means,
      with respect to any Person, any corporation, private company, partnership,
      limited partnership, limited liability company, limited liability partnership,
      joint venture or other legal entity of which such Person (either alone or
      through or together with any other subsidiary of such Person) owns, directly
      or
      indirectly, a majority of the stock or other equity interests.

     

    “Surviving
      Corporation”
      has the
      meaning set forth in Section 2.03.

     

    “Suspension
      Event”
      has the
      meaning set forth in Section 6.02(d).

     

    “Tax”
      or
“Taxes”
      means
      (i) any and all taxes, fees, levies, duties, tariffs, imposts and other
      charges of any kind (together with any and all interest, linkage differentials
      [hefresehi
      hatzmada],
      penalties, additions to tax and additional amounts imposed with respect thereto)
      imposed by any Governmental Entity or taxing authority, including, without
      limitation, taxes or other charges on or with respect to income, franchises,
      windfall or other profits, gross receipts, property, sales, use, capital stock,
      payroll, employment, social security, national insurance, workers’ compensation,
      unemployment compensation or net worth; taxes or other charges in the nature
      of
      excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes;
      license, registration and documentation fees; and customers’ duties, tariffs and
      similar charges; (ii) any liability for the payment of any amounts of the
      type described in (i) as a result of being a member of an affiliated, combined,
      consolidated or unitary group for any taxable period; and (iii) any
      liability for the payment of amounts of the type described in (i) or (ii) as
      a
      result of being a transferee of, or a successor in interest to, any Person
      or as
      a result of an express or implied obligation to indemnify any
      Person.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    “Tax
      Return”
      means
      any return, statement or form (including, without limitation, any estimated
      tax
      reports or return, withholding tax reports or return and information report
      or
      return) required to be filed with respect to any Taxes.

     

    “Terminating
      Company Breach”
      has the
      meaning set forth in Section 9.01(c).

     

    “Terminating
      Parent Breach”
      has the
      meaning set forth in Section 9.01(d).

     

    “Trading
      Restriction Administrator”
      has the
      meaning set forth in Section 2.14.

     

    “Trading
      Restriction Agreements”
      has the
      meaning set forth in Section 2.14.

     

    “Trailing
      Closing Average Price” means
      the
      average of the closing stock price of a share of Parent Common Stock on the
      Nasdaq Capital Market as
      reported in The
      Wall Street Journal
      or, if
      not available, such other authoritative publication as may be reasonably
      selected by the Parent, for
      the
      twenty trading days preceding the date that is two business days prior to the
      Closing Date.

     

    “Trailing
      Signing Average Price” means
      the
      average of the closing stock price of a share of Parent Common Stock on the
      Nasdaq Capital Market as reported in The
      Wall Street Journal
      or, if
      not available, such other authoritative publication as may be reasonably
      selected by the Parent, for the twenty trading days preceding the date that
      is
      two business days prior to the date of this Agreement.

     

    “Transaction
      Documents”
      means,
      collectively, this Agreement, the Escrow Agreement, the Trading Restriction
      Agreements, the Lock-up Agreements and the Employment Agreements.

     

    “U.S.
      Withholding Liability”
      means
      any liability for (i) Taxes, including amounts arising under Sections 1441,
      1461
      or 3406 of the Code and Treasury Regulations, or (ii) Damages, in each case
      only so far as (i) and (ii) relate to the failure by the Company or the Company
      Subsidiary to report payments made to U.S. and foreign persons, withhold Taxes
      on such payments or obtain documentation from such persons. 

     

    SECTION
      1.02. Construction.
      For the
      purposes of this Agreement, except as otherwise expressly provided herein or
      unless the context otherwise requires: (a) words using the singular or
      plural number also include the plural or singular number, respectively, and
      the
      use of any gender herein shall be deemed to include the other genders;
      (b) references herein to “Articles,” “Sections,” “subsections” and other
      subdivisions, and to Exhibits, Schedules and other attachments, without
      reference to a document are to the specified Articles, Sections, subsections
      and
      other subdivisions of, and Exhibits, Schedules and other attachments to, this
      Agreement; (c) a reference to a subsection or other subdivision without
      further reference to a Section is a reference to such subsection or subdivision
      as contained in the same Section in which the reference appears; (d) the
      words “herein”, “hereof”, “hereunder”, “hereby” and other words of similar
      import refer to this Agreement as a whole and not to any particular provision;
      (e) the words “include”, “includes” and “including” are deemed to be
      followed by the phrase “without limitation”; and (f) all accounting terms
      used and not defined herein have the respective meanings given to them under
      GAAP.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    II.

     

    THE
      MERGER; CONVERSION OF SECURITIES

     

    SECTION
      2.01. The
      Merger; Effective Time of the Merger. Subject
      to the provisions of this Agreement, Merger Sub will be merged with and into
      Company (the “Merger”).
      A
      certificate of merger (the “Certificate
      of Merger”)
      shall
      be duly prepared, executed, and acknowledged by the parties and thereafter
      delivered to the Secretary of State of the State of Delaware, for filing, as
      provided in the Delaware General Corporation Law (the “DGCL”)
      as
      soon as practicable on or after the Closing Date (as defined below). The Merger
      shall become effective upon the acceptance for filing of the Certificate of
      Merger by the Secretary of State of the State of Delaware or at such time
      thereafter as is provided in the Certificate of Merger (the “Effective
      Time”).
      Solely for purposes of clarification, Company and the Stockholders’
Representative acknowledge and agree that Parent will have no obligation to
      make
      any payment pursuant to this Agreement until the Certificate of Merger has
      been
      certified in writing by the Secretary of State of the State of
      Delaware.

     

    SECTION
      2.02. Closing.
      The
      closing of the Merger (the “Closing”)
      shall
      take place as soon as practicable but no later than the third Business Day
      after
      satisfaction or waiver of the conditions set forth in Article VII (the
“Closing
      Date”),
      at
      the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 399 Park Avenue,
      New
      York, NY 10022, unless another date or place is agreed to in writing by the
      parties hereto.

     

    SECTION
      2.03. Effect
      of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers
      of
      Surviving Corporation. At
      the
      Effective Time, (i) the separate existence of Merger Sub shall cease and Merger
      Sub shall be merged with and into Company and Company shall continue as the
      Surviving Corporation and as an indirect subsidiary of Parent (subsequent to
      the
      Merger, Company is sometimes referred to herein as the “Surviving
      Corporation”),
      (ii)
      the Certificate of Incorporation and the Bylaws of Merger Sub as in effect
      immediately prior to the Effective Time shall be the Certificate of
      Incorporation and the Bylaws of the Surviving Corporation, until thereafter
      amended as provided by Law and such Certificate of Incorporation or Bylaws;
      provided, however, that Article 1 of the Certificate of Incorporation of the
      Surviving Corporation shall be amended to read as follows: “The name of the
      corporation is Kasamba, Inc. (the “Corporation”)”;
      (iii) the directors and officers of Merger Sub immediately prior to the
      Effective Time shall be the directors and officers of the Surviving Corporation
      in each case until their respective successors shall have been duly elected,
      designated, or qualified or until their earlier death, resignation, or removal
      in accordance with the Surviving Corporation’s Certificate of Incorporation and
      Bylaws, and (iv) the Merger shall, from and after the Effective Time, have
      all
      the effects provided by applicable law.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    SECTION
      2.04. Merger
      Consideration; Conversion of Company Preferred Stock and Company Common
      Stock.

     

    (a) Merger
      Consideration.
      Subject
      to adjustment as set forth in Section 2.13 below and the deposit of the Cash
      Escrow Amount and the Stock Escrow Amount in accordance with the provisions
      of
      the Escrow Agreement, the aggregate consideration to be paid by Parent and
      Merger Sub hereunder shall consist of (A) the Stock Merger Consideration, plus
      (B) the Cash Merger Consideration (collectively, the “Initial
      Merger Consideration”).
      The
      Initial Merger Consideration and any adjustment to the Initial Merger
      Consideration necessitated by Section 2.13 (the “Net
      Balance Sheet Adjustment”)
      shall
      collectively be referred to as the “Aggregate
      Merger Consideration”.
      Each
      share of Company Preferred Stock and Company Common Stock issued and outstanding
      immediately prior to the Effective Time (excluding Dissenting Shares (as defined
      below), treasury stock and those owned by any wholly-owned subsidiary of the
      Company) and all right in respect thereof shall automatically be canceled and
      retired and shall forthwith cease to exist, and each holder of a certificate
      which immediately prior to the Effective Time represented any such shares of
      Company Preferred Stock or Company Common Stock shall cease to have any rights
      with respect thereto, except the right to receive a portion of the Aggregate
      Merger Consideration as provided in Sections 2.04(c) and 2.04(d) below.


     

    (b) Merger
      Sub Common Stock.
      At the
      Effective Time and on the terms and subject to the conditions of this Agreement,
      each share of Common Stock, par value $0.01 per share, of Merger Sub issued
      and
      outstanding immediately prior to the Effective Time shall, by virtue of the
      Merger and without any action on the part of Parent, Merger Sub, or the Company,
      be converted into one (1) validly issued, fully paid and nonassessable share
      of
      common stock of the Surviving Corporation, with the same rights, powers and
      privileges as the shares so converted and shall constitute the only outstanding
      shares of capital stock of the Surviving Corporation as of the Effective Time.
      Each stock certificate of Merger Sub evidencing ownership of any such shares
      shall remain outstanding and evidence ownership of shares of Surviving
      Corporation Common Stock.

     

    (c) Company
      Preferred Stock.
      At the
      Effective Time and on the terms and subject to the conditions of this Agreement,
      (A) each share of Series A Preferred Stock of the Company issued and outstanding
      immediately prior to the Effective Time (other than Dissenting Shares) shall,
      by
      virtue of the Merger and without any action on the part of Parent, Merger Sub,
      or the Company, be converted into the right to receive a portion of the
      Aggregate Merger Consideration as set forth in the Merger Consideration
      Allocation Certificate (as defined below); (B) each share of Series A-1
      Preferred Stock of the Company issued and outstanding immediately prior to
      the
      Effective Time (other than Dissenting Shares) shall, by virtue of the Merger
      and
      without any action on the part of Parent, Merger Sub, or the Company, be
      converted into the right to receive a portion of the Aggregate Merger
      Consideration as set forth in the Merger Consideration Allocation Certificate;
      and (C) each share of Series A-2 Preferred Stock of the Company issued and
      outstanding immediately prior to the Effective Time (other than Dissenting
      Shares) shall, by virtue of the Merger and without any action on the part of
      Parent, Merger Sub or the Company, be converted into the right to receive a
      portion of the Aggregate Merger Consideration set forth in the Merger
      Consideration Allocation Certificate.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (d) Company
      Common Stock.
      At the
      Effective Time and on the terms and subject to the conditions of this Agreement,
      each share of Company Common Stock issued and outstanding immediately prior
      to
      the Effective Time (other than Dissenting Shares) shall, by virtue of the Merger
      and without any action on the part of Parent, Merger Sub, or the Company, be
      cancelled and shall be converted into the right to receive a portion of the
      Aggregate Merger Consideration as set forth in the Merger Consideration
      Allocation Certificate.

     

    (e) Company
      Options.
      At the
      Effective Time, each vested and unvested option to purchase shares of Company
      Common Stock under any Company Option Plan (the “Company
      Options”)
      which
      is
      outstanding and unexercised immediately prior to the Effective Time, other
      than
      the options set forth on Schedule
      II,
      which
      shall be exercised immediately prior thereto, shall be assumed by Parent, and
      the Company Options shall be converted into an option to purchase shares of
      Parent Common Stock in such number and at such exercise price as provided below
      and otherwise having the same terms and conditions as in effect immediately
      prior to the Effective Time (except to the extent that such terms, conditions
      and restrictions may be altered in accordance with their terms as a result
      of
      the Merger contemplated hereby and except that all references in each such
      Company Option to Company shall be deemed to refer to Parent): 

     

    (i) the
      number of shares of Parent Common Stock to be subject to the new option shall
      be
      equal to the product of (x) the number of shares of Company Common Stock subject
      to the original Company Option immediately prior to the Effective Time and
      (y)
      the Exchange Ratio; 

     

    (ii) the
      exercise price per share of Parent Common Stock under the new option shall
      be
      equal to (x) the exercise price per share of Company Common Stock in effect
      under the original Company Option immediately prior to the Effective Time
      divided by (y) the Exchange Ratio; and 

     

    (iii) in
      effecting such assumption and conversion, the aggregate number of shares of
      Parent Common Stock to be subject to each assumed Company Option will
      be
      rounded down, if necessary, to the next whole share and the aggregate exercise
      price shall be rounded up, if necessary, to the next whole cent.


     

     

    The
      aggregate number of shares underlying the options to purchase Parent Common
      Stock issuable pursuant to this Section 2.04(e) shall represent a portion of
      the
      Stock Merger Consideration.

     

     

    Any
      adjustments provided herein with respect to options shall be effected in a
      manner consistent with applicable law and, to the extent applicable, that
      maintains any intended favorable tax treatment relating to such options that
      existed prior to such adjustment. The assumption of the outstanding Company
      Options in the Merger and their conversion into options for Parent Common Stock
      will not result in any accelerated vesting of those options or the shares
      purchasable thereunder, and the vesting schedule in effect for each Company
      Option immediately prior to the Effective Time (after giving effect to the
      acceleration provisions contained in the agreements identified in Sections
      3.09(c)(1) and (2) of the Company Disclosure Schedule) shall remain in full
      force after the assumption thereof by Parent.

     

    
      
        
        

      

      
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    (f) Treasury
      Stock.
      At the
      Effective Time, each share of Company Preferred Stock and Company Common Stock
      held by the Company in its treasury shall be cancelled and extinguished without
      any conversion thereof.

     

    (g) Company
      Capitalization Schedules.
      On the
      Closing Date, the Company shall deliver to Parent and Merger Sub separate
      schedules reflecting (i) a true and complete list of record holders of the
      issued and outstanding Company Preferred Stock, including the number of shares
      of each series of Company Preferred Stock held by such record holders, (ii)
      a
      true and complete list of record holders of the issued and outstanding Company
      Common Stock, including the number of shares of Company Common Stock held by
      such record holders, and (iii) a true and complete list of record holders of
      the
      Company Options, including the number of options held by such optionholders,
      as
      well as the grant dates, vesting schedules and strike prices of all outstanding
      options. Prior to the Parent making payment of the Merger Consideration, the
      Company shall execute and deliver to Parent a certificate setting forth the
      good
      faith calculation of the Company of the Per Share Merger Consideration and
      the
      aggregate Per Share Merger Consideration payable to each of the holders of
      Company Preferred Stock, Company Common Stock and Company Options (after giving
      effect to the provisions of Sections 2.05(a)(i) and (ii) hereof) (the
“Merger
      Consideration Allocation Certificate”).
      The
      Merger Consideration Allocation Certificate shall be deemed to be a
      representation and warranty of the Company hereunder. In no event shall Parent
      be required to transfer the Merger Consideration unless and until the Merger
      Consideration Allocation Certificate has been executed and delivered by the
      Company and approved by Parent. Parent shall be entitled to rely entirely upon
      the Merger Consideration Allocation Certificate in connection with making
      payment of the Merger Consideration and no holder of Company Preferred Stock,
      Company Common Stock or Company Options shall be entitled to make any claim
      in
      respect of the allocation of the Merger Consideration made by Parent to or
      for
      the benefit of any holder of Company Preferred Stock, Company Common Stock
      or
      Company Options to the extent that the payment is made in a manner consistent
      with the Merger Consideration Allocation Certificate.

     

    (h) Maximum
      Consideration to be Paid.
      Notwithstanding anything to the contrary contained in this Agreement, but
      subject, if any, to (i) the adjustment provided for in Section 2.13 hereof,
      (ii)
      the indemnification obligations of Parent contained in Article VIII and (iii)
      the provisions of Section 2.06 hereof, in no event shall Parent, Merger Sub
      or
      any Affiliate of Parent be required to pay any amount in excess of the Aggregate
      Merger Consideration. Without limiting the generality of the foregoing, in
      the
      event of any breach of the representations and warranties of the Company set
      forth in Sections 2.04(g) and 3.03 of this Agreement, whether such breach is
      as
      a result of any misstatement or omission in respect of the information set
      forth
      in Section 3.03 of the Company Disclosure Schedule or otherwise, the portion
      of
      the Aggregate Merger Consideration to be paid to each such holder under this
      Agreement shall be automatically equitably adjusted to accurately reflect the
      capitalization of the Company as of the Effective Time.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (i) Tax
      Treatment.
      Notwithstanding the foregoing, if the Cash Merger Consideration is less
      than or equal to 20% of the value (determined under U.S. federal income tax
      principles) of the Initial Merger Consideration or the Aggregate Merger
      Consideration, the Parent may, in its sole discretion, increase the Cash Merger
      Consideration with a corresponding decrease to the Stock
      Merger Consideration if the Parent concludes that such adjustment
      is appropriate in order for the Merger to be treated as a taxable stock
      purchase for U.S. federal income tax purposes. For these purposes, any
      reduction in the number of shares issued as Stock Merger Consideration shall
      increase the Cash Merger Consideration using a valuation for the reduced
      number of shares equal to the Closing Price times the number of shares so
      reduced, provided, that the Closing Price shall not be less than $6.52
      .

     

    SECTION
      2.05. Exchange
      Procedures.
      

     

    (a) The
      functions of making various payments required under this Agreement and the
      Escrow Agreement including, without limitation, the payment of the Stock Merger
      Consideration and Cash Merger Consideration in exchange for Certificates, shall
      be effectuated by a paying agent (the “Paying
      Agent”).
      The
      Paying Agent shall initially be ESOP Trust Company (“ESOP Trust Company”),
      provided, however, if in the reasonable judgment of the Stockholders’
Representative ESOP Trust Company is not able to satisfactorily fulfill its
      obligations as the Paying Agent or the Parent and the Stockholders’
Representative are unable to reach an agreement with ESOP Trust Company upon
      reasonable and customary terms reasonably acceptable to both the Parent and
      the
      Stockholders’ Representative, then the Stockholders’ Representative may select a
      different trust company at any time during the term of this Agreement or the
      Escrow Agreement, which replacement Paying Agent shall be reasonably acceptable
      to the Parent.

     

    On
      the
      Closing Date, the Parent shall deliver to the Paying Agent, in trust for the
      benefit of the Stockholders, the Stock Merger Consideration and the Cash Merger
      Consideration minus (X) the Stock Escrow Amount, which shall be delivered to
      the
      Escrow Agent, and minus (Y) the Cash Escrow Amount, which shall be delivered
      to
      the Escrow Agent. 

     

    Immediately
      following the Closing, the Paying Agent shall use a portion of the Cash Merger
      Consideration to pay:

     

    (i) any
      cash
      payments mutually agreed upon by the Parent and the Stockholders’
Representative; and

     

    (ii) certain
      bonuses to current or former employees of the Company, in
      accordance with a schedule previously provided by the Company to the
      Parent
      (provided, however, that any material changes from such schedule shall be
      reasonably acceptable to the Parent), in an amount aggregating 10% of the
      difference between (X) the Cash Merger Consideration and (Y) the sum of the
      Cash
      Escrow Amount and any payments referred to in Section 2.05(a)(i), which shall
      be
      paid either by the Paying Agent or the Company, in the discretion of the
      Company.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    In
      addition, on the Escrow Fund Distribution Date (as defined in the Escrow
      Agreement), the Escrow Agent shall remit to the Paying Agent 10% of the amount
      ultimately released from the Cash Escrow Amount, for payment of bonuses to
      certain current or former employees of the Company, pursuant to a schedule
      prepared by the Stockholders’ Representative and which shall be substantially
      consistent with a schedule previously provided by the Company to the Parent,
      provided,
      however, that any material changes from such schedule shall be reasonably
      acceptable to the Parent.

     

    As
      soon
      as reasonably practicable after the Effective Time (but in no event later than
      5
      days following the Effective Time) and after the receipt by the Paying Agent
      of
      the Merger Consideration Allocation Certificate, the Parent shall cause the
      Paying Agent to mail (i) to each holder of a certificate or certificates
      which immediately prior to the Effective Time represented outstanding shares
      of
      Company Preferred Stock or Company Common Stock (the “Certificates”)
      (A) a
      letter of transmittal, in customary form, which shall specify that delivery
      shall be effective only upon delivery of the Certificates to Paying Agent and
      that risk of loss and title to the Certificates shall remain with the
      Stockholder until such delivery, and (B) instructions for effecting the
      surrender of such Certificates in exchange for a portion of the Aggregate Merger
      Consideration. Upon surrender of a Certificate and a letter of transmittal
      (or
      other documentation in compliance with Section 2.08 hereof), as applicable,
      to
      the Paying Agent together, with respect to holders of Certificates, with such
      letter of transmittal, duly executed and completed in accordance with the
      instructions thereto, and such other documents as may reasonably be required
      by
      the Paying Agent, the stockholder delivering such documents shall be entitled
      to
      receive in exchange therefor (A) its respective portion of the Aggregate Merger
      Consideration (subject
      to the provisions of Sections 2.05(a)(i) and (ii), and
      Article VIII hereof), less the portion of the Aggregate Merger Consideration
      allocable to such stockholder that has been deposited in the Cash Escrow Amount
      and Stock Escrow Amount pursuant to Section 8.06, subject to the provisions
      of
      Sections 2.05(a)(i) and (ii) hereof, and (B) cash in lieu of fractional
      shares of Parent Common Stock pursuant to Section 2.07. No later than 5 Business
      Days prior to the Closing Date, Parent shall deliver the form of letter of
      transmittal to the Company and the Stockholders’ Representative and prior to the
      Closing shall make such changes to the form as either shall reasonably request.
      The final form of letter of transmittal shall be in a form reasonably acceptable
      to the Company and the Stockholders’ Representative. If requested by the
      Stockholders’ Representative, the Paying Agent shall promptly provide the
      Stockholders’ Representative with copies of the executed letters of transmittal.
      Notwithstanding the foregoing, the foregoing exchange procedures shall comply
      with such procedures as may be required by the Israeli Withholding Tax Ruling,
      if obtained, and shall permit Parent or the Paying Agent (after consultation
      with the Company) to require holders of Certificates to provide any
      declarations, information and/or certificates of exemption (or reduced
      withholding rates) (x) that are reasonably necessary to comply with the Israeli
      Withholding Tax Ruling, if obtained, or (y) that Parent or the Paying Agent
      reasonably believes are necessary in order for it to determine whether Parent,
      the Surviving Corporation or the Paying Agent is subject to any withholding
      requirements with respect to payments made to any particular
      Stockholder.

     

    (b) If
      the
      Stock Merger Consideration and Cash Merger Consideration (or any portion
      thereof) is to be delivered to any Person other than the Person in whose name
      the Certificate formerly representing shares of Company Capital Stock
      surrendered therefor is registered, it shall be a condition to the right of
      such
      Person, other than the registered holder of a Certificate, to receive the Stock
      Merger Consideration and the Cash Merger Consideration payable with respect
      to
      such Certificate that (i) the Certificate be properly endorsed or otherwise
      be in proper form for transfer and (ii) the Person surrendering such
      Certificate shall pay any transfer or other Taxes required by reason of the
      receipt of the Stock Merger Consideration and the Cash Merger Consideration
      to a
      Person other than such registered holder or shall establish to the reasonable
      satisfaction of Parent and the Paying Agent that such Tax has been paid or
      is
      not applicable.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    SECTION
      2.06. Appraisal
      Rights.
      Notwithstanding any provision of this Agreement to the contrary, any issued
      and
      outstanding shares of Company Preferred Stock or Company Common Stock held
      by
      persons who have exercised and perfected appraisal rights for such shares of
      Company Preferred Stock or Company Common Stock, as applicable, in accordance
      with applicable Law (“Dissenting
      Shares”)
      and as
      of the Effective Time have neither effectively withdrawn nor lost any right
      to
      such appraisal, shall not be converted into or represent a right to receive
      the
      Aggregate Merger Consideration payable under this Article II attributable to
      such Dissenting Shares. Such stockholders shall be entitled to receive payment
      of the appraised value of such shares of Company Preferred Stock or Company
      Common Stock held by them in accordance with applicable Law, unless and until
      such stockholders fail to perfect, effectively withdraw or otherwise lose their
      appraisal rights under applicable Law. Notwithstanding the foregoing, if any
      dissenting stockholder shall effectively withdraw or lose (through failure
      to
      perfect or otherwise) the right to appraisal, then as of the Effective Time
      or
      the occurrence of such event, whichever occurs later, such Dissenting Shares
      shall automatically be converted into and represent only the right to receive
      the Aggregate Merger Consideration and any other amounts payable under this
      Article II, without interest thereon, upon surrender of the Certificate or
      Certificates representing such Dissenting Shares in accordance with Section
      2.05. The Company shall provide Parent notice, promptly after the Company’s
      receipt thereof, of any written demands for appraisal or payment of the fair
      value of any shares of Company Preferred Stock or Company Common Stock, as
      applicable, the withdrawal of such demands and any other related instruments
      served pursuant to applicable Law.

     

    SECTION
      2.07.  Fractional
      Shares.
      No
      fractional shares of Parent Common Stock will be issued pursuant to this
      Agreement, but in lieu thereof each holder of Company Preferred Stock or Company
      Common Stock who would otherwise be entitled to a fractional share of Parent
      Common Stock hereunder (after aggregating all fractional shares of Parent Common
      Stock to be received by such holder) shall receive from Parent an amount of
      cash
      (rounded to the nearest whole cent) equal to the product of (a) such fractional
      share multiplied by (b) the Closing Price, less the amount of any withholding
      taxes which may be required thereon.

     

    SECTION
      2.08. Lost,
      Stolen or Destroyed Certificates.
      If 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, if required by Parent or the Paying Agent, an agreement
      to indemnify against any claim that may be made against the Paying Agent Parent
      or the Surviving Corporation with respect to such Certificate, the Paying Agent
      will deliver in exchange for such lost, stolen or destroyed Certificate the
      portion of the Aggregate Merger Consideration and any other amounts payable
      under this Article II with respect to the Company Preferred Stock or Company
      Common Stock formerly represented thereby.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    SECTION
      2.09. Withholding
      Rights.
      Each of
      the Surviving Corporation, the Paying Agent, the Escrow Agent and Parent shall
      be entitled, with respect to payments made by each such entity, to deduct and
      withhold from the Aggregate Merger Consideration and any other amounts otherwise
      payable pursuant to this Agreement such amounts as it is required to deduct
      and
      withhold with respect to the making of such payment under the Israeli
      Withholding Tax Ruling, if obtained, the Code, the Israeli Tax Code, the rules
      and regulations promulgated thereunder or under any applicable Law, provided
      that no withholding under Israeli Tax law will be made from any consideration
      payable hereunder to a holder of Company Preferred Stock or Company Common
      Stock
      to the extent that such stockholder has provided Parent or the Paying Agent
      with
      an appropriate unequivocal exemption or confirmation of a reduced withholding
      rate issued by the ITA or such other document, opinion or form which, in the
      sole discretion of Parent, is sufficient to enable Parent or the Paying Agent
      to
      reasonably conclude that no withholding or a reduced rate of withholding, as
      applicable, of Israeli Tax is required with respect to the particular holder
      of
      Company Preferred Stock or Company Common Stock in question, prior to the time
      such payment is made.
      Upon
      delivery of the Aggregate Merger Consideration, Parent or the Paying Agent
      shall
      deliver to the Stockholders’ Representative a statement of all amounts so
      withheld. To the extent that amounts are so withheld by the Surviving
      Corporation, Parent or the Paying Agent, as the case may be, such withheld
      amounts shall be treated for all purposes of this Agreement as having been
      paid
      to the stockholders or optionholders of the Company, as the case may be, in
      respect to which such deduction and withholding was made by the Surviving
      Corporation or Parent, as the case may be. Any amounts deducted and withheld
      pursuant to this Section 2.09 shall be remitted to the appropriate Taxing
      authority in accordance with applicable Law.

     

    SECTION
      2.10. Stock
      Transfer Books.
      The
      stock transfer books of the Company shall be closed two Business Days preceding
      the Closing Date (the “Record
      Date”)
      and
      there shall be no further registration of transfers of Company Preferred Stock
      or Company Common Stock thereafter on the records of the Company. In the event
      of a transfer of ownership of Company Preferred Stock or Company Common Stock
      prior to the Record Date which is not registered in the transfer records of
      the
      Company, the Aggregate Merger Consideration and any other amounts payable under
      this Article II shall be payable to such transferee if the Certificate
      representing such shares of Company Preferred Stock or Company Common Stock
      is
      presented to Parent, accompanied by all documents required to evidence and
      effect such transfer in the sole and reasonable discretion of
      Parent.

     

    SECTION
      2.11. Certain
      Adjustments.
      If,
      between the date of this Agreement and the Effective Time, the outstanding
      shares of Parent Common Stock or Company Common Stock shall be changed into
      a
      different number of shares by reason of any reclassification, recapitalization,
      split-up, combination or exchange of shares, or any dividend payable in stock
      or
      other securities shall be declared thereon with a record date within such
      period, then, the allocation of the Aggregate Merger Consideration among the
      Stockholders shall be adjusted accordingly to provide to Parent and to the
      Stockholders the same economic effect as contemplated by this Agreement prior
      to
      such reclassification, recapitalization, split-up, combination, exchange,
      dividend or increase.

     

    SECTION
      2.12. [Reserved.]

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    SECTION
      2.13. Net
      Balance Sheet Adjustment. 

     

    (a) Within
      sixty (60) days after the Closing Date, Parent shall deliver to the
      Stockholders’ Representative a Closing Date Balance Sheet of the Company (the
“Closing
      Date Balance Sheet”)
      prepared as of the Closing Date, in accordance with U.S. GAAP, consistently
      applied and on a basis consistent with the accounting practices and policies
      used to prepare the audited consolidated balance sheet of the Company at
      December 31, 2006. The Closing Date Balance Sheet shall be prepared by the
      Company’s external auditor as of the date hereof (Ernst & Young LLP) unless
      Parent elects to use another accounting firm, in which case Parent will be
      required to pay the fees and disbursements charged by that other accounting
      firm. The Stockholders’ Representative shall cooperate with the Parent in the
      preparation of the Closing Date Balance Sheet, including but not limited to
      providing access to any appropriate work papers or to the Company’s accountants
      and auditors. In addition, the Company shall deliver a certificate (the
“Net
      Working Capital Certificate”)
      to the
      Stockholders’ Representative calculating the amount of Net Working Capital as of
      the Closing Date.

     

    (b) The
      Stockholders’ Representative shall deliver to the Parent within thirty (30) days
      after receiving the Closing Date Balance Sheet a reasonably detailed statement
      describing all of its objections (if any) thereto and sufficient details
      describing the basis therefor. Failure of the Stockholders’ Representative to so
      object to the Closing Date Balance Sheet within such 30-day period shall
      constitute acceptance thereof, whereupon such Closing Date Balance Sheet shall
      be deemed to be the “Final
      Closing Balance Sheet”
for
      purposes of this Agreement. If the Stockholders’ Representative does submit to
      Parent a statement of objections to the Closing Date Balance Sheet within such
      30-day period, the Parent and the Stockholders’ Representative shall use
      reasonable efforts to resolve any such objections, but if they do not reach
      a
      final resolution within thirty (30) days after Parent has received the statement
      of objections from the Stockholders’ Representative, Parent and the
      Stockholders’ Representative shall select a nationally-recognized independent
      accounting firm, other than the respective regular independent accounting firms
      of Parent and the Company, mutually acceptable to them (the “Accounting
      Referee”)
      to
      resolve any remaining objections. If Parent and the Stockholders’ Representative
      are unable to agree on the choice of Accounting Referee, they shall select
      as
      Accounting Referee an internationally-recognized accounting firm by lot (after
      excluding their respective regular independent accounting firms). Parent and
      the
      Stockholders’ Representative shall use commercially reasonable efforts to cause
      the Accounting Referee to resolve, within sixty (60) days after appointment
      of
      the Accounting
      Referee,
      the
      matters on the Closing Date Balance Sheet which are the subject of dispute
      between Parent and the Stockholders’ Representative, and the Closing Date
      Balance Sheet shall be adjusted in accordance with the Accounting Referee’
determination and, as so adjusted, shall be the “Final
      Closing Balance Sheet”
for
      purposes of this Agreement. Such determination by the Accounting Referee shall
      be conclusive and binding upon Parent and the Stockholders’ Representative.
      Parent and the Stockholders’ Representative shall share equally the fees and
      expenses of the Accounting Referee. The Parent and the Surviving Corporation
      shall make such information, personnel and resources available to the
      Stockholders’ Representative as may be reasonably necessary to enable the
      Stockholders’ Representative to review the Closing Date Balance Sheet; provided
      that the obligation of the Parent and the Surviving Corporation to provide
      such
      information, personnel and resources shall be limited to normal business hours
      with reasonable prior notice and in such a manner so as not to interfere
      unreasonably with the conduct of their business. 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    (c) If
      the
      amount of Net Working Capital, as set forth in the Final Closing Balance Sheet,
      is less than $0.00, then the Initial Merger Consideration shall be reduced
      by
      the amount by which the Net Working Capital is less than $0.00; provided;
      however,
      that
      the Parent may not make a claim for such reduction unless the aggregate amount
      by which the Net Working Capital is less than $0.00 equals $500,000 or greater,
      in which case the Parent shall have the right to a reduction of the full amount
      by which the Net Working Capital is less than $0.00, which amount shall be
      remitted by the Escrow Agent back to Parent pursuant to the terms of the Escrow
      Agreement.

     

    (d) If
      the
      amount of Net Working Capital, as set forth in the Final Closing Balance Sheet,
      is greater than $0.00, then the Initial Merger Consideration shall be increased
      by the amount by which the Net Working Capital exceeds $0.00; provided;
      however,
      that
      the Stockholders’ Representative may not make a claim for such increase unless
      the aggregate amount by which the Net Working Capital exceeds $0.00 equals
      $500,000 or greater, in which case the Stockholders shall have the right to
      an
      increase of the full amount by which the Net Working Capital exceeds $0.00,
      which amount shall be paid by the Parent or the Surviving Corporation to the
      Paying Agent (for distribution to the Stockholders).

     

    SECTION
      2.14. Other
      Provisions Relating to Parent Common Stock.
      Except
      as otherwise permitted pursuant to the terms of Section 2.14(c) below, the
      shares of Parent Common Stock to be issued to the Principal Stockholders
      pursuant to this Agreement are subject to the provisions of a trading
      restriction agreement in favor of Parent substantially in the form of
Exhibit
      E
      hereto
      (the “Trading
      Restriction Agreements”)
      to be
      signed by each Principal Stockholder as set forth below in clauses (a) - (c)
      below. The Trading Restriction Agreements shall be administered by a trading
      restriction administrator (the “Trading
      Restriction Administrator”).
      The
      Trading Restriction Administrator shall initially be ESOP-EXCELLENCE, an
      affiliate of ESOP Trust Company (“ESOP-EXCELLENCE”), provided, however, if in
      the reasonable judgment of the Stockholders’ Representative ESOP-EXCELLENCE is
      not able to satisfactorily fulfill its obligations as the Trading Restriction
      Administrator or the Parent and the Stockholders’ Representative are unable to
      reach an agreement with ESOP-EXCELLENCE upon reasonable and customary terms
      reasonably acceptable to both the Parent and the Stockholders’ Representative,
      then the Parent may select a different brokerage firm at any time during the
      term of the Trading Restriction Agreements, which replacement Trading
      Restriction Administrator shall be reasonably acceptable to the Stockholders’
Representative. 

     

    (a) One
      Trading Restriction Agreement shall be executed by the Principal Stockholders
      identified in Schedule
      I
      as Group
      1 and such stockholders, collectively, shall be bound by the volume limitations
      provided therein, such Trading Restriction Agreement to govern the sales of
      Parent Common Stock by the members of Group 1 for the period commencing on
      the
      Initial Release Date and ending on the date three years after the Initial
      Release Date;

     

    (b) A
      second
      Trading Restriction Agreement shall be executed by the Principal Stockholders
      identified in Schedule
      I
      as Group
      2 and such stockholders, collectively, shall be bound by the volume limitations
      provided therein, such Trading Restriction Agreement to govern the sales of
      Parent Common Stock by the members of Group 2 for the period commencing on
      the
      Initial Release Date and ending on the date three years after the Initial
      Release Date; and

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (c) A
      third
      Trading Restriction Agreement shall be executed by (a) all of the Principal
      Stockholders identified in Schedule
      I
      as Group
      3A, and (b) such other Stockholders (referred to herein as Group 3B) who
      together with Group 1, Group 2 and Group 3A in the aggregate hold at least
      90%
      of the capital stock of the Company on an outstanding shares plus vested options
      basis, provided, however, that, the Stockholders in Group 3B may not be members
      of Group 1, Group 2 or Group 3A (Group 1; Group 2; and
      Group
      3A and Group 3B
      together, each
      individually a “Group”
and,
      collectively, the “Groups”),
      and
      such stockholders and optionholders, collectively, shall be bound by the volume
      limitations provided therein, such Trading Restriction Agreement to govern
      the
      sales of Parent Common Stock by the members of Group 3A and Group 3B
for
      the
      period commencing on the Closing Date and ending on the date three years after
      the Closing Date, 

     

    it
      being
      understood that sales of Parent shares by Stockholders of any Group shall not
      be
      taken into account for purposes of the volume limitations applicable to any
      other Group. 

     

    SECTION
      2.15. Stockholders’
      Representative.

     

    (a) Subject
      to the provisions of paragraph (c) below, Yoav Leibovich, hereby is irrevocably
      constituted and appointed as the sole, exclusive, true and lawful agent,
      representative and attorney-in-fact of all Stockholders and each of them
      (“Stockholders’
      Representative”)
      with
      respect to any and all matters relating to, arising out of, or in connection
      with, the Transaction Documents (other than the Employment Agreements and
      Lock-up Agreements), including for purposes of taking any action or omitting
      to
      take action on behalf of Stockholders thereunder. All actions, notices,
      communications and determinations by or on behalf of Stockholders under such
      documents shall be given or made by Stockholders’ Representative and all such
      actions, notices, communications and determinations by Stockholders’
Representative shall conclusively be deemed to have been authorized by, and
      shall be binding upon, any of and all of the Stockholders.

     

    (b) The
      Stockholders’ Representative will not be liable to any Stockholder for any act
      taken or omitted by it as permitted under this Agreement, except if such act
      is
      taken or omitted in bad faith or by willful misconduct. The Stockholders’
Representative will also be fully protected in relying upon any written notice,
      demand, certificate or document that it in good faith believes to be genuine
      (including facsimiles thereof). The Stockholders agree, severally but not
      jointly, to indemnify the Stockholders’ Representative for, and to hold the
      Stockholders’ Representative harmless against, any loss, liability or expense
      incurred without willful misconduct or bad faith on the part of the
      Stockholders’ Representative, arising out of or in connection with the
      Stockholders’ Representative’s carrying out its duties as representative for the
      Stockholders under this Agreement, including costs and expenses of successfully
      defending the Stockholders’ Representative against any claim of liability with
      respect thereto. In the event that any such amounts are not paid to the
      Stockholder Representative, the Stockholder Representative shall be entitled
      to
      receive such amounts from the remaining balance in the Stock Escrow Account
      and
      Cash Escrow Amount, but only after the termination of the applicable escrow
      period pursuant to the terms of the Escrow Agreement and satisfaction of any
      claims made by the Parent Indemnified Group. The Stockholders’ Representative
      may consult with counsel of its own choice and will have full and complete
      authorization and protection for any action taken and suffered by it in good
      faith and in accordance with the opinion of such counsel.

     

    
      
        
        

      

      
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    (c) If
      Stockholders’ Representative dies or becomes legally incapacitated, or, if the
      Stockholders’ Representative becomes unable or unwilling, for any reason, to
      serve as representative for the Stockholders, then such other Person or Persons
      as may be designated by Stockholders holding a majority of the voting interests
      of the Company, shall succeed the Stockholders’ Representative as the
      representative of the Stockholders in all matters under this Agreement and
      the
      transactions contemplated hereby. If at any time there shall not be a
      Stockholders’ Representative or Stockholders so fail to designate a successor
      Stockholders’ Representative, then Parent may have a court of competent
      jurisdiction appoint a Stockholders’ Representative hereunder. 

     

    (d) Without
      limiting the generality of the foregoing, Stockholders’ Representative is
      designated as the sole and exclusive agent, representative and attorney-in-fact
      for Stockholders for all purposes related to this Agreement (including
      (i) service of process upon Stockholders, (ii) executing and
      delivering to Parent or any other Person on behalf of any of or all Stockholders
      any and all instruments, certificates, documents and agreements with respect
      to
      the transactions contemplated by the Transaction Documents (other than the
      Employment Agreements and Lock-up Agreements), and any other instrument,
      certificate, document or agreement referred to in Section 7.02, and
      (iii) receipt of all notices on behalf of Stockholders with respect to any
      matter, suit, claim, action or proceeding arising with respect to the sale
      of
      the Shares or any transaction contemplated by the Transaction Documents (other
      than the Lock-up Agreements and the Employment Agreements), including the
      defense, settlement or compromise of any claim, action or proceeding pursuant
      to
      Article VIII), and Stockholders may act, with respect to all matters under
      the
      Transaction Documents (other than the Lock-up Agreements and Employment
      Agreements), only through the Stockholders’ Representative. Parent shall be
      entitled to rely on the authority of the Stockholders’ Representative as the
      agent, representative and attorney-in-fact of Stockholders for all purposes
      under the Transaction Documents (other than the Employment Agreements and
      Lock-up Agreements) and shall have no liability for any such reliance. None
      of
      Stockholders may revoke the authority of Stockholders’ Representative. Each
      Stockholder hereby ratifies and confirms, and hereby agrees to ratify and
      confirm, any action taken by Stockholders’ Representative in the exercise of the
      power-of-attorney granted to Stockholders’ Representative pursuant to this
      Section 2.15, which power-of-attorney, being coupled with an interest, is
      irrevocable and shall survive the death, incapacity or incompetence of such
      Stockholder. Any payment made to Stockholders’ Representative or the Paying
      Agent pursuant to any of the Transaction Documents (other than the Employment
      Agreements and Lock-up Agreements) shall be deemed to have been made to
      Stockholders (it being understood that all payments to the Stockholders will
      be
      made via the Paying Agent unless the Parent receives specific instructions
      to
      the contrary or as is otherwise specifically provided herein). Promptly after
      receiving any such payment, Stockholders’ Representative shall deliver to each
      Stockholder his, her or its pro rata portion of such payment. Without limiting
      the foregoing, Stockholders hereby covenant and agree to defend, indemnify
      and
      hold harmless the members of the Parent Indemnified Group from and against
      any
      Losses arising out of any claim that Stockholders’ Representative failed to
      distribute to Stockholders (or properly allocate among them) any payments
      received by Stockholders’ Representative under the Transaction Documents (other
      than the Employment Agreements and Lock-up Agreements).

     

    
      
        
        

      

      
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    III.

     

    REPRESENTATIONS
      AND WARRANTIES AS TO

    THE
      COMPANY

     

    Company
      represents and warrants to Parent and Merger Sub, subject to the exceptions
      specifically disclosed in writing in the Company Disclosure Schedule
      (the
      disclosures in any section or subsection of the Company Disclosure Schedule
      shall qualify other sections and subsections in this Article III only to the
      extent it is reasonably clear from a reading of the disclosure that such
      disclosure is applicable to such other sections and subsections)
      that:

     

    SECTION
      3.01. Organization
      and Qualification; Subsidiaries. 

     

    (a) The
      Company has been duly incorporated and is validly existing and in good standing
      under the Laws of the jurisdiction of its incorporation and has the requisite
      corporate power and authority to own, lease and operate its properties and
      to
      carry on its
      business as it is now being conducted.
      Kasamba
      Ltd. is a company duly organized and validly existing under the laws of the
      State of Israel and has all requisite corporate power and authority to carry
      on
      its business as it is now being conducted. Each of the Company and the Company
      Subsidiary is duly qualified or licensed to do business, and is in good standing
      (if applicable), in each jurisdiction where the character of the properties
      owned, leased or operated by it or the nature of its business makes such
      qualification or licensing necessary, except for such failures to be so
      qualified or licensed and in good standing that would not reasonably be expected
      to have, individually or in the aggregate, a Company Material Adverse
      Effect.

     

    (b) Except
      for Kasamba Ltd. (the “Company
      Subsidiary”),
      the
      Company does not own an equity interest in any corporation, partnership or
      joint
      venture arrangement or other business entity. All of the issued and outstanding
      share capital of the Company Subsidiary is owned by the Company.

     

    (c) Neither
      the Company nor the Company Subsidiary carries on any business other than
      assisting consumers find expert help through online chat, phone service or
      e-mail communication.

     

    SECTION
      3.02. Certificate
      of Incorporation and Bylaws.
      True,
      complete and correct copies of the Company’s Certificate of Incorporation and
      bylaws and the Company Subsidiary’s charter or memorandum and articles of
      association or other organizational documents and bylaws (the “Organizational
      Documents”),
      each
      as amended, are included in Section 3.02 of the Company Disclosure Schedule.
      Such Organizational Documents are in full force and effect. Neither the Company
      nor the Company Subsidiary is in violation of any of the provisions of its
      Organizational Documents.

     

    SECTION
      3.03. Capitalization.
      The
      authorized capital stock of the Company consists of 4,000,000 shares of Common
      Stock, par value $0.01 per share (“Company
      Common Stock”),
      and
      884,400 shares of Preferred Stock, par value $0.01 per share (“Company
      Preferred Stock”),
      of
      which 332,700 are designated as “Series A Preferred Stock,” 151,700 are
      designated as “Series A-1 Preferred Stock,” and 400,000 are designated as
“Series A-2 Preferred Stock.” There are 1,382,000 shares of Company Common Stock
      currently issued and outstanding, 332,700 shares of Series A Preferred Stock
      currently issued and outstanding, 10 shares of Series A-1 Preferred Stock
      currently issued and outstanding, and 245,247 shares of Series A-2 Preferred
      Stock currently issued and outstanding. All of the currently issued and
      outstanding shares of Common Stock and Preferred Stock are duly authorized,
      validly issued, fully paid and nonassessable, and have been issued in full
      compliance with all securities laws, including the Israel Securities Law. Except
      for the Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2
      Preferred Stock and the Company Common Stock and the Company Options, there
      are
      no shares of capital stock or other equity securities of the Company
      outstanding. Other than the Company Options, there are no options, warrants
      or
      other rights, agreements, arrangements or commitments of any character to which
      the Company is a party or by which the Company is bound relating to the issued
      or unissued capital stock of the Company or obligating the Company to issue
      or
      sell any shares of capital stock of, or other equity interests in, the Company.
      There are no outstanding contractual obligations of the Company to repurchase,
      redeem or otherwise acquire any shares of Company Common Stock. There are no
      material outstanding contractual obligations of the Company to provide funds
      to,
      or make any material investment (in the form of a loan, capital contribution
      or
      otherwise) in, any other Person. Set forth on Schedule
      I
      to this
      Agreement is a complete capitalization table of the Company as of the date
      of
      this Agreement, listing the name of each holder of any outstanding equity
      securities, options,
      warrants or other rights relating
      to the capital stock of the Company and the number of shares, options, warrants
      or other rights owned by such holder.

     

    
      
        
        

      

      
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    SECTION
      3.04. Authority
      Relative to this Agreement.
      The
      Company has all necessary corporate power and authority to execute and deliver
      this Agreement, the other Transaction Documents, and all other instruments,
      certificates and agreements delivered or required to be delivered pursuant
      to
      this Agreement to which the Company is a party, to perform its obligations
      hereunder and thereunder and to consummate the transactions contemplated hereby
      and thereby. With the exception of the Required Stockholder Consent, the
      execution and delivery by the Company of this Agreement and the other
      Transaction Documents to which it is a party and the consummation by the Company
      of the transactions contemplated hereby and thereby have been duly and validly
      authorized by all necessary corporate action, and no other corporate proceedings
      on the part of the Company are necessary to authorize this Agreement or such
      Transaction Documents or to consummate the transactions contemplated hereby
      and
      thereby. This Agreement and the other Transaction Documents to which it is
      a
      party has been duly and validly executed and delivered by the Company. This
      Agreement and the other Transaction Documents to which it is a party constitutes
      the legal, valid and binding obligation of the Company, enforceable against
      it
      in accordance with its terms, except to the extent that its enforceability
      may
      be limited by applicable bankruptcy, insolvency, reorganization or other Laws
      affecting the enforcement of creditors’ rights generally or by general equitable
      principles.

     

    SECTION
      3.05. No
      Conflicts; Required Filings and Consents.

     

    (a) Except
      as
      set forth in Section 3.05 of the Company Disclosure Schedule, the execution
      and
      delivery of this Agreement and the other Transaction Documents to which it
      is a
      party by the Company do not, and the performance by the Company of its
      obligations hereunder and thereunder, and the consummation of the transactions
      contemplated hereby and thereby will not, (i) conflict with or violate any
      provision of the Organizational Documents of the Company or the Company
      Subsidiary, (ii) conflict with or violate any Law applicable to the Company
      or the Company Subsidiary or by which any property or asset of the Company
      or
      the Company Subsidiary is bound or affected or (iii) result in any breach
      of or constitute a default (or an event which with the giving of notice or
      lapse
      of time or both could reasonably be expected to become a default) under, or
      give
      to others any right of termination, amendment, acceleration or cancellation
      of,
      or result in the creation of a lien or other encumbrance on any material
      property or asset of the Company or the Company Subsidiary pursuant to, any
      material note, bond, mortgage, indenture, contract, agreement, lease, license,
      permit, franchise or other instrument or obligation in each case, with respect
      to clauses (ii) and (iii) of this Section 3.05(a), which will result in a
      Company Material Adverse Effect.

     

    
      
        
        

      

      
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    (b) Except
      as
      set forth in Section 3.05 of the Company Disclosure Schedule, no filing or
      registration with, or notification to, and no permit, authorization, consent
      or
      approval of, any Government Entity is necessary for the execution and delivery
      of this Agreement by the Company or the consummation by the Company of the
      transactions contemplated by this Agreement except (i) such filings and
      consents as may be required under any Environmental Law pertaining to any
      notification, disclosure or required approval triggered by the transactions
      contemplated by this Agreement, (ii) such filings, registrations,
      notifications, permits, authorizations, consents or approvals that result from
      the specific legal or regulatory status of the Parent or as a result of any
      other facts that specifically relate to the business or activities in which
      the
      Parent is engaged other than the business of the Company and (iii) such
      other filings, registrations, notices, permits, authorizations, consents and
      approvals that if not obtained, made or given would not, individually or in
      the
      aggregate, have a Company Material Adverse Effect.

     

    (c) Except
      as
      set forth in Section 3.05(c) of the Company Disclosure Schedule, no consent
      of
      any third party is required by reason of the transactions contemplated by this
      Agreement, except where the failure to obtain such consent would not have a
      Company Material Adverse Effect.

     

    SECTION
      3.06. Permits;
      Compliance with Laws. Except
      as
      set forth in Section 3.06 of the Company Disclosure Schedule, the Company and
      the Company Subsidiary are in possession of all franchises, grants,
      authorizations, licenses, establishment registrations, product listings,
      permits, easements, variances, exceptions, consents, certificates,
      identification and registration numbers, approvals and orders of any
      Governmental Entity necessary for the Company and the Company Subsidiary to
      own,
      lease and operate its properties or to offer or perform its services or to
      develop, produce, store, distribute and market its products or otherwise to
      carry on its business as it is now being conducted (collectively, the
“Company
      Permits”),
      except where the failure to have such Company Permits would not have a Company
      Material Adverse Effect, and, as of the date of this Agreement, none of the
      Company Permits has been suspended or cancelled nor is any such suspension
      or
      cancellation pending or, to the Company’s Knowledge, threatened. Neither the
      Company nor the Company Subsidiary is in conflict with, or in default or
      violation of, (i) any Law applicable to the Company or the Company Subsidiary
      or
      by which any property or asset of the Company or the Company Subsidiary is
      bound
      or affected or (ii) any Company Permits, in each case other than as would not
      result in a Company Material Adverse Effect. Section 3.06 of the Company
      Disclosure Schedule sets forth, as of the date of this Agreement, all actions,
      proceedings or investigations pending or, to the Company’s Knowledge, threatened
      against the Company or the Company Subsidiary that could reasonably be expected
      to result in the suspension or cancellation of any other Company Permit. Since
      January 1, 2006, neither the Company nor the Company Subsidiary has received
      from any Governmental Entity any written notification with respect to possible
      conflicts, defaults or violations of Laws. To the Company’s Knowledge, the
      transactions contemplated hereby will not result in the suspension or
      cancellation of any Company Permit

     

    
      
        
        

      

      
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    SECTION
      3.07. Financial
      Statements.

     

    (a) Section
      3.07 of the Company Disclosure Schedule includes copies of (i) the audited
      consolidated balance sheet of the Company at December 31, 2006, together
      with the related statement of operations, stockholders’ equity and cash flows
      for the year ended December 31, 2006 and the notes thereto and
      (ii) the unaudited consolidated interim balance sheet of the Company at
      March 31, 2007, together with the related statement of operations,
      stockholders’ equity and cash flows for the three months ended March 31,
      2007 and the notes thereto along with a review report from the Company’s
      independent public accountants pursuant to Statement of Accounting Standards
      No. 100 (the “Company
      Financial Statements”).
      The
      Company Financial Statements: (i) were prepared in accordance with GAAP (except,
      with respect to the unaudited balance sheet and income statement, for the
      absence of notes thereto and for year-end adjustments) applied on a consistent
      basis throughout the periods covered thereby; (ii) present fairly the financial
      position, results of operations and cash flows of the Company as of such dates
      and for the periods then ended; and (iii) are correct and complete in all
      material respects, and can be reconciled with the books of account and records
      of the Company. The Company maintains and will continue to maintain an adequate
      system of internal controls established and administered in accordance with
      GAAP.

     

    (b) Except
      as
      and to the extent set forth or reserved against on
      the
      audited balance sheet of the Company at December
      31, 2006, neither the Company nor the Company Subsidiary has any liabilities
      or
      obligations of any nature (whether accrued, absolute, contingent, committed
      or
      otherwise) that would be required to be reflected on a balance sheet or in
      notes
      thereto prepared in accordance with GAAP, except for liabilities or obligations
      incurred in the ordinary course of business consistent with past practice as
      reflected on the audited balance sheet of the Company at December 31,
      2006.

     

    SECTION
      3.08. Absence
      of Certain Changes or Events.
      Except
      as set forth in Section 3.08 of the Company Disclosure Schedule, since December
      31, 2006, each of the Company and the Company Subsidiary has conducted its
      business only in the ordinary course consistent with past practice and, since
      such date, there has not been (i) any Company Material Adverse Effect, (ii)
      any
      event that could reasonably be expected to prevent or materially delay the
      performance of the Company’s obligations pursuant to this Agreement and the
      consummation of the transactions contemplated hereby by the Company, (iii)
      any
      change by the Company or the Company Subsidiary in its accounting methods,
      principles or practices, (iv) any declaration, setting aside or payment of
      any
      dividend or distribution in respect of the shares of Company Preferred Stock
      or
      Company Common Stock or any redemption, purchase or other acquisition of any
      of
      the Company’s securities, (v) any increase in the compensation or benefits or
      establishment of any bonus, insurance, severance, deferred compensation,
      pension, retirement, profit sharing, stock option (including, without
      limitation, the granting of stock options, stock appreciation rights,
      performance awards or restricted stock awards), stock purchase or other employee
      benefit plan, or any other increase in the compensation payable or to become
      payable to any employees, officers, consultants or directors of the Company
      or
      the Company Subsidiary, (vi) any issuance or sale of any stock, notes, bonds
      or
      other securities, or entering into any agreement with respect thereto, (vii)
      any
      amendment to the Company’s or the Company Subsidiary’s Organizational Documents,
      (viii) other than in the ordinary course of business consistent with past
      practice, any (x) purchase, sale, assignment or transfer of any material assets,
      (y) mortgage, pledge or existence of any lien, encumbrance or charge on any
      material assets or properties, tangible or intangible, except for liens for
      Taxes not yet delinquent and such other liens, encumbrances or charges which
      do
      not, individually or in the aggregate, have a Company Material Adverse Effect,
      or (z) waiver of any rights of material value or cancellation of any material
      debts or claims, (ix) any incurrence of any damage, destruction or similar
      loss,
      whether or not covered by insurance, materially affecting the business or
      properties of the Company or the Company Subsidiary, (x) any entering into
      any
      transaction of a material nature other than in the ordinary course of business,
      consistent with past practice, (xi) any application made to a Governmental
      Entity for an advisory ruling, monetary grant or any other application that
      would have an impact on the financial position of the Company or the Company
      Subsidiary, or negotiation of, receipt of, or termination or cancellation of
      a
      government grant, (xii) any change in any Tax election, annual Tax accounting
      period, any method of Tax accounting, any filing of amended Tax Returns or
      claims for Tax refunds, any entry into a closing agreement relating to Taxes
      or
      any settlement of any Tax claim, audit or assessment, or any application or
      negotiation for or receipt of a Tax ruling or arrangement by the Company, its
      Subsidiaries or its stockholders or on their behalf, whether or not in
      connection with the Merger, except as explicitly contemplated in this Agreement,
      or (xiii) any negotiation or agreement by the Company or the Company Subsidiary
      to do any of the things described in the preceding clauses (i) through
      (xii). 

     

    
      
        
        

      

      
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    SECTION
      3.09. Employee
      Matters. 

     

    (a) Neither
      the Company nor the Company Subsidiary is party to any Contract regarding
      collective bargaining or other Contract with any labor or trade union or
      collective bargaining group representing any employee of the Company or the
      Company Subsidiary, nor, to the Company’s Knowledge, does any labor or trade
      union or collective bargaining agent represent any employee of the Company
      or
      the Company Subsidiary. No Contract regarding collective bargaining has been
      requested by, or is under discussion between management of the Company or the
      Company Subsidiary (or any management group or association of which the Company
      or the Company Subsidiary is a member or otherwise a participant) and any group
      of employees of the Company or the Company Subsidiary, nor are there any
      representation proceedings or petitions seeking a representation proceeding
      presently pending against the Company or the Company Subsidiary, nor, to the
      Company’s Knowledge, are there any other current activities to organize any
      employees of the Company or the Company Subsidiary into a collective bargaining
      unit. There are no unfair labor practice charges or complaints pending or,
      to
      the Company’s Knowledge, threatened against the Company or the Company
      Subsidiary.

     

    (b) Section
      3.09(b) of the Company Disclosure Schedule sets forth a true, accurate and
      complete list of the Company’s and each Company Subsidiary’s directors,
      officers, employees, consultants and independent contractors, and includes
      a
      listing of each of such director’s, officer’s and employee’s compensation terms
      (including, but not limited to date of commencement of employment, salary,
      bonuses, stock options and warrants (if any), social benefits, fringe benefits
      and accrued vacation). Except as set forth in Section 3.09(b) of the Company
      Disclosure Schedule, each of the Company’s and the Company Subsidiary’s
      employees works in Israel. Neither the Company nor the Company Subsidiary is
      delinquent in any material payment to any of its employees for any wages,
      salaries, commissions, bonuses or other direct compensation for any services
      performed by any such employees. Except as indicated in Section 3.09(b) of
      the
      Company Disclosure Schedule, upon termination of the employment of any
      employees, neither the Company, the Company Subsidiary nor the Parent will
      by
      reason of the transaction contemplated pursuant to this Agreement or anything
      done prior to the Closing Date be liable to any of such directors, officer
      or
      employees for severance pay or any other payments (other than accrued salary,
      vacation or such pay in accordance with normal policies or amount required
      to be
      paid under applicable Laws). 

     

    
      
        
        

      

      
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    (c) The
      Company has previously delivered to Parent true and complete copies of all
      employment, consulting, termination and severance Contracts with or for the
      benefit of, or otherwise relating to, any directors, officers, employees,
      consultants or independent contractors of the Company and the Company
      Subsidiary. Except as set forth on Section 3.09(c) of the Company Disclosure
      Schedule, none of the execution, delivery or performance of any Transaction
      Document by the Company or the consummation by the Company of the transactions
      contemplated hereby or thereby will result in any obligation to pay any
      directors, officers, employees, consultants, independent contractors, former
      directors, officers, employees, consultants or independent contractors of the
      Company or the Company Subsidiary severance pay or termination, retention or
      other benefits.

     

    (d) Except
      as
      set forth on Section 3.09(d) of the Company Disclosure Schedule, no current
      employee has given notice to, or received notice from, the Company or any of
      its
      Representatives that any such employee’s employment or service may be terminated
      or advised the Company or any Company Subsidiary of an intention to give such
      notice to, or is expected to receive notice from, the Company, the Company
      Subsidiary or any of their Representatives that any such employee’s employment
      or service may be terminated.

     

    (e) Except
      as
      set forth on Section 3.09(e) of the Company Disclosure Schedule, the Company
      has
      never maintained, contributed to or incurred any Liability under any Benefit
      Plan that is or was subject to ERISA or the U.S. Tax Code or any Foreign Pension
      Plan. There is no, nor has there ever been any, individual, person or entity
      that together with the Company has ever been treated as a single-employer within
      the meaning of Section 414(b), (c), (m) or (o) of the U.S. Tax Code or Section
      4001(b) of ERISA.

     

    (f) Section
      3.09(f) of the Company Disclosure Schedule sets forth a current, accurate and
      complete list of each Benefit Plan.

     

    (g) The
      Company has delivered or made available to Parent current, accurate and complete
      copies of (i) each Benefit Plan that has been reduced to writing and all
      amendments thereto and (ii) all trust agreements, insurance contracts,
      investment management agreements, investment advisory agreements, administrative
      services agreements or similar agreements maintained in connection with any
      Benefit Plan.

     

    
      
        
        

      

      
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    (h) No
      person
      previously employed by the Company or the Company Subsidiary has now or may
      have
      a right to return to work or a right to be reinstated or re-engaged by any
      applicable Law. Each of the Company and the Company Subsidiary has at all
      relevant times complied in all material respects with all its obligations under
      Law with respect to any aspect of the employment of its employees, including
      with respect to the health and safety at work of its employees, and, except
      as
      set forth in Section 3.09 of the Company Disclosure Schedule, there are no
      material claims pending or, to the Company’s Knowledge, capable of arising or
      threatened by any party in respect of any accident or injury which is not fully
      covered by insurance of the Company or the Company Subsidiary.

     

    (i) To
      the
      Company’s Knowledge, no employees of the Company or the Company Subsidiary are
      in violation of any term of any employment contract, non-disclosure agreement,
      non-competition agreement, or any restrictive covenant to a former employer
      relating to the right of any such employee to be employed by the Company or
      the
      Company Subsidiary because of the nature of the business conducted or presently
      proposed to be conducted by the Company or to the use of trade secrets or
      proprietary information of others. 

     

    (j) With
      respect to employees of the Company or the Company Subsidiary who reside or
      work
      in Israel (the “Israeli
      Employees”),
      except as set forth in Section 3.09(j) of the Company Disclosure Schedule:
      (a)
      the employment of each Israeli Employee is subject to termination upon not
      more
      than thirty (30) days prior written notice under the termination notice
      provisions included in the employment agreement with such Israeli Employee
      or
      applicable legal requirements; (b) all obligations of the Company or the Company
      Subsidiary to provide statutory severance pay to all Israeli Employees pursuant
      to the Severance Pay Law (5723-1963) are fully funded or accrued on the
      Financial Statements; (c) no Israeli Employee’s employment by the Company or the
      Company Subsidiary requires any special license, permit or other governmental
      authorization; (d) there are no unwritten policies, practices or customs of
      the
      Company or the Company Subsidiary that, by extension, could reasonably be
      expected to entitle any Israeli Employee to benefits in addition to what such
      Israeli Employee is entitled to by applicable legal requirements or under the
      terms of such Israeli Employee’s employment agreement (including unwritten
      customs or practices concerning bonuses, the payment of statutory severance
      pay
      when it is not required under applicable legal requirements); (e) all amounts
      that Company or the Company Subsidiary is legally or contractually required
      either (i) to deduct from Israeli Employees’ salaries or to transfer to such
      Israeli Employees’ pension or provident, life insurance, incapacity insurance,
      continuing education fund or other similar funds or (ii) to withhold from their
      Israeli Employees’ salaries and benefits and to pay to any Governmental
      Authority as required by the ITA and National Insurance Law or otherwise, have,
      in each case, been duly deducted, transferred, withheld and paid, and neither
      the Company nor the Company Subsidiary have any outstanding obligation to make
      any such deduction, transfer, withholding or payment; (f) each of the Company
      and the Company Subsidiary is in compliance in all material respects with all
      applicable legal requirements and contracts relating to employment, employment
      practices, wages, bonuses, pension benefits and other compensation matters
      and
      terms and conditions of employment related to Israeli Employees, including
      but
      not limited to The Prior Notice to the Employee Law, 2002, The Notice to
      Employee (Terms of Employment) Law, 2002, the Prevention of Sexual Harassment
      Law, 1998, the
      Hours
      of Work and Rest Law, 1951, the Annual Leave Law, 1951, and
      The
      Employment by Human Resource Contractors Law, 1996; and (g) neither the Company
      nor the Company Subsidiary has engaged any consultants, sub-contractors or
      freelancers. The Company and the Company Subsidiary are not subject to, and
      no
      employee of the Company or the Company Subsidiary benefits from, any extension
      order [tzavei
      harchava].
      The
      Company has furnished to Parent (a) copies of all material agreements with
      Israeli human resource contractors, or with Israeli consultants, sub-contractors
      or freelancers; and (b) copies of material manuals and material written policies
      relating to the employment of Israeli Employees.

     

    
      
        
        

      

      
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    SECTION
      3.10. Contracts.
      Section
      3.10 of the Company Disclosure Schedule describes all Contracts to which the
      Company or the Company Subsidiary is a party or by which the Company or the
      Company Subsidiary is bound and that meet any of the following criteria
      (individually, a “Material
      Contract”
and
      collectively, the “Material
      Contracts”):

     

    (a) any
      sales, advertising, distribution or agency contract in excess of $24,000 over
      the life of the contract or in excess of $2,000 a month if the Contract is
      for a
      period of less than 12 months;

     

    (b) any
      continuing contract for the purchase of materials, supplies, equipment or
      services involving in the case of any such contact in excess of $24,000 over
      the
      life of the contract or in excess of $2,000 a month if the Contract is for
      a
      period of less than 12 months;

     

    (c) any
      contract providing for consideration in excess of $24,000 for which the current
      term extends beyond one year after the date of this Agreement;

     

    (d) any
      trust
      indenture, mortgage, promissory note, loan agreement or other contract for
      the
      borrowing of money, any currency exchange, commodities or other hedging
      arrangement or any leasing transaction of the type required to be capitalized
      in
      accordance with GAAP;

     

    (e) any
      contract for capital expenditures in excess of $24,000 in the
      aggregate;

     

    (f) any
      contract limiting the freedom of the Company or the Company Subsidiary to engage
      in any line of business or to compete with any other corporation, partnership,
      limited liability company, trust, individual or other entity, or any
      confidentiality, secrecy or non-disclosure contract;

     

    (g) any
      contract pursuant to which the Company or the Company Subsidiary is a lessor
      of
      any machinery, equipment, motor vehicles, office furniture, fixtures or other
      personal property, pursuant to which payments in excess of $24,000 remain
      outstanding;

     

    (h) any
      contract with an Affiliate;

     

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

     

    
      
        
        

      

      
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    (j) any
      foreign currency forward exchange contracts;

     

    (k) any
      employment contract, arrangement or policy (including without limitation any
      collective bargaining contract or union agreement) which may not be terminated
      on thirty (30) days notice or less without penalty (or any augmentation or
      acceleration of benefits); or

     

    (l) any
      other
      contract which does not meet the foregoing criteria but which is material to
      the
      operations of the Company’s business or the Company Subsidiary’s business.


     

    Each
      of
      the Company and the Company Subsidiary, as the case may be, has performed in
      all
      material respects all of the obligations required to be performed by it and
      is
      entitled to all benefits under, and has not received notice that it is in
      default in respect of any Material Contract. Each of the Material Contracts
      is
      valid and binding and in full force and effect, and there exists no default
      or
      event of default or event, occurrence, condition or act, with respect to the
      Company or the Company Subsidiary, or to the Company’s Knowledge, with respect
      to the other contracting party, which, with the giving of notice, the lapse
      of
      the time or the happening of any other event or conditions, would become a
      default or event of default under any Material Contract. True, correct and
      complete copies of all Material Contracts have been delivered to the
      Parent.

     

    SECTION
      3.11. Litigation.
      Except
      as set forth in Section 3.11 of the Company Disclosure Schedule, there is no
      private or governmental action, suit, proceeding, claim, arbitration or
      investigation pending before any agency, court or tribunal, foreign or domestic,
      or, to the Company’s Knowledge, threatened against the Company or any of its
      properties or any of its officers or directors (in their capacities as such)
      or
      relating to the business of the Company, nor is the Company aware that there
      is
      any basis for any of the foregoing. There is no judgment, decree or order
      against the Company or, or, to the Company’s Knowledge, any of its directors or
      officers (in their capacities as such), that could prevent, enjoin, or
      materially alter or delay any of the transactions contemplated by this
      Agreement, or that could reasonably be expected to have a Company Material
      Adverse Effect. Section 3.11 of the Company Disclosure Schedule also lists
      all
      litigation that the Company has pending against other parties.

     

    SECTION
      3.12. Environmental
      Matters.
      To the
      Company’s Knowledge: (a) the Company and the Company Subsidiary are in material
      compliance with all applicable Environmental Laws and all Company Permits
      required by Environmental Laws; (b) all past noncompliance, if any, of the
      Company or the Company Subsidiary with Environmental Laws or Environmental
      Permits has been resolved without any pending, ongoing or future obligation,
      cost or liability; and (c) neither the Company nor the Company Subsidiary has
      released a Hazardous Material at, or transported a Hazardous Material to or
      from, any real property currently or formerly owned, leased or occupied by
      the
      Company or the Company Subsidiary, in violation of any Environmental
      Law.

     

    SECTION
      3.13. Intellectual
      Property.

     

    (a) Section
      3.13(a) of the Company Disclosure Schedule contains a true and complete list
      of
      the Company’s and the Company Subsidiary’s patents, patent applications,
      registered trademarks, trademark applications, trademarks, trade names,
      registered service marks, service mark applications, service marks, Internet
      domain names, Internet domain name applications, copyright registrations and
      applications and other filings and formal actions made or taken pursuant to
      Federal, state, local and foreign Laws by the Company or the Company Subsidiary
      to protect their interests in the Company Intellectual Property, and includes
      details of all due dates for further filings, maintenance, payments or other
      actions falling due in respect of the Company Intellectual Property within
      twelve (12) months of the Closing Date. All of the Company’s and the Company
      Subsidiary’s patents, patent applications, registered trademarks, trademark
      applications and registered copyrights remain in good standing with all fees
      and
      filings due as of the date hereof. 

     

    
      
        
        

      

      
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    (b) The
      Company Intellectual Property contains only those items and rights which are:
      (i) owned by the Company or
      a
      Company Subsidiary;
      (ii) in
      the public domain; or (iii) rightfully used by the Company or a Company
      Subsidiary pursuant to a valid and enforceable license or other agreement (the
      “Company
      Licensed Intellectual Property”),
      the
      parties, date, term and subject matter of each such license or other agreement
      (each, a “License
      Agreement”)
      being
      set forth on Section 3.13(b) of the Company Disclosure Schedule. The
      Company has all rights in the Company Intellectual Property, including without
      limitation, rights to make, use, reproduce, modify, adopt, create derivative
      works based on, translate, distribute (directly and indirectly), transmit,
      display and perform publicly, license, rent and lease and, other than with
      respect to the Company Licensed Intellectual Property, assign and sell, the
      Company Intellectual Property.

     

    (c) The
      use,
      reproduction, manufacturing, distribution, licensing, sublicensing, sale or
      any
      other exercise of rights in any Company Intellectual Property, product, work,
      technology, service or process as now used or offered or proposed for use,
      licensing or sale by the Company or the Company Subsidiary does not infringe
      on
      any proprietary or personal right of any Person such as patent, design right,
      trademark, trade name, service mark, trade dress, Internet domain name,
      copyright, database right, statistical model, technology, invention, supplier
      list, trade secret, know-how, computer software program or application of any
      Person, anywhere in the world. Neither the Company nor the Company Subsidiary
      has received notice of any pending or threatened claims (including offers to
      grant licenses) (i) challenging the validity, effectiveness or, other than
      with
      respect to the Company Licensed Intellectual Property, ownership by the Company
      of any Company Intellectual Property, or (ii) to the effect that the use,
      distribution, licensing, sublicensing, sale or any other exercise of rights
      in
      any product, work, technology or process as now used or offered or proposed
      for
      use, licensing, sublicensing or sale by the Company, the Company Subsidiary
      or
      their agents or use by their customers infringes or will infringe on or
      misappropriate any intellectual property or other proprietary or personal right
      of any Person. To
      the
      Company’s Knowledge,
      no such
      claims have been threatened by any Person, nor are there any valid grounds
      for
      any bona fide claim of any such kind. All of the rights within the Company
      Intellectual Property are enforceable and subsisting. To the Company’s
      Knowledge, there is no unauthorized use, infringement or misappropriation of
      any
      Company Intellectual Property by any third party, employee or former
      employee.

     

    (d) All
      personnel, including employees, agents, consultants and contractors, who have
      contributed to or participated in the conception and development of the Company
      Intellectual Property on behalf of the Company or the Company Subsidiary, have
      executed nondisclosure agreements and either (i) have been a party to an
      enforceable agreement with the Company in accordance with applicable national
      and state Law that accords the Company full, effective, exclusive and original
      ownership of all tangible and intangible property as “works-for-hire,” arising
      from the efforts of such personnel, or (ii) have executed appropriate
      instruments of assignment in favor of the Company that have conveyed to the
      Company full, effective and exclusive ownership of all tangible and intangible
      property arising from the efforts of such personnel.

     

    
      
        
        

      

      
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    (e) Neither
      the Company nor the Company Subsidiary is, nor as a result of the execution
      or
      delivery of this Agreement, or performance of the Company’s obligations
      hereunder, will the Company or the Company Subsidiary be, in violation of any
      license, sublicense, agreement or instrument to which the Company or the Company
      Subsidiary is a party or otherwise bound, nor will execution or delivery of
      this
      Agreement, or performance of the Company’s obligations hereunder, cause the
      diminution, termination or forfeiture of any the Company Intellectual
      Property.

     

    (f) Section
      3.13(f)
      of the
      Company Disclosure Schedule contains a true and complete list of all the
      software programs used by the Company or the Company Subsidiary other than
      off-the-shelf mass market software (the “Company
      Software Programs”).
      Each
      of the Company and the Company Subsidiary owns full and unencumbered right
      and
      good, valid and marketable title to such Company Software Programs that it
      owns,
      free and clear of all mortgages, pledges, liens, security interests, conditional
      sales agreements, encumbrances or charges of any kind. Each of the Company
      and
      the Company Subsidiary has full and unrestricted rights to use the Company
      Software Programs that it licenses, pursuant to license agreements listed in
      Section 3.13(b)
      of the
      Company Disclosure Schedule.

     

    (g) The
      source code and system documentation relating to the Company Software Programs
      have been maintained in strict confidence and (i) have been disclosed by the
      Company and the Company Subsidiary only to those of their employees and
      consultants who have a “need to know” the contents thereof in connection with
      the performance of their duties to the Company or the Company Subsidiary and
      who
      have executed nondisclosure agreements with the Company or the Company
      Subsidiary; and (ii) have been disclosed to only those third parties who have
      executed nondisclosure agreements with the Company or the Company
      Subsidiary.

     

    (h) The
      Company Intellectual Property is free and clear of any and all mortgages,
      pledges, liens, security interests, conditional sale agreements, encumbrances
      or
      charges of any kind.

     

    (i) Except
      as
      set forth in Section 3.13(i) of the Company Disclosure Schedule, the Company
      does not owe nor will owe any royalties or other payments to third parties
      in
      respect of the Company Intellectual Property, including any Company Licensed
      Intellectual Property. All royalties or other payments that have accrued prior
      to the Closing Date have been paid.

     

    (j) To
      the
      Company’s Knowledge, the Company Software Programs and other Company
      Intellectual Property contain no “viruses.” For the purposes of this Agreement,
“virus” means any computer code designed to disrupt, disable or harm in any
      manner the operation of any software or hardware including, without limitation,
      worms, bombs, backdoors, clocks, timers, or other disabling device code, designs
      or routines which cause the software to be erased, inoperable, or otherwise
      incapable of being used, either automatically or upon command by any
      party.

     

    
      
        
        

      

      
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    (k) Except
      as
      specified on Section
      3.13(k) of the Company Disclosure Schedule,
      no
      Company product (including any Company product currently under development)
      contains any code that is, in whole or in part, subject to the provisions of
      any
      license to software that is made generally available to the public without
      requiring payment of fees or royalties (including without limitation any
      obligation or condition under any “open source” license such as, without
      limitation, the GNU General Public License, GNU Lesser General Public License,
      Mozilla Public License or BSD licenses). No Company Intellectual Property is
      subject to any license terms that (i) require, or condition the use or
      distribution of any Company Intellectual Property on the disclosure, licensing
      or distribution of any source code for any portion of such Company Intellectual
      Property or (ii) except as set forth on Section 3.13(k) of the Company
      Disclosure Schedule, otherwise impose any limitation, restriction or condition
      on the right or ability of the Company or any Company Subsidiary to use or
      distribute any Company Intellectual Property owned by the Company.

     

    (l) No
      funding, facilities or personnel of any Governmental Entity, including the
      Office of the Chief Scientist of the Israel Ministry of Industry, Commerce
      and
      Labor, were used, directly or indirectly, to develop or create, in whole or
      in
      part, any Company Intellectual Property. Neither the Company nor the Company
      Subsidiary, nor, to the Company’s Knowledge, any of their respective
      shareholders, is or has ever been a member or promoter of, or a contributor
      to,
      any industry standards body or similar organization that could compel the
      Company or any Company Subsidiary or shareholder thereof to grant or offer
      to
      any third party any license or right to such Company Intellectual
      Property.

     

    (m) The
      business of the Company and the Company Subsidiary as currently conducted does
      not require either of them to obtain a license from the Israeli Ministry of
      Defense or an authorized body thereof pursuant to Section 2(a) of the Control
      of
      Products and Services Declaration (Engagement in Encryption), 1974, as amended,
      or otherwise.

     

    SECTION
      3.14. Taxes. 

     

    (a) All
      Tax
      Returns required to be filed by, with respect to, or on behalf of the Company,
      the Company Subsidiary or any of their predecessor corporations, or any
      consolidated, combined, affiliated or unitary group of which the Company or
      the
      Company Subsidiary is or has ever been a member, have been timely filed with
      the
      appropriate tax authorities. Except as disclosed in Section 3.14(a) of the
      Company Disclosure Schedule, any requests for extensions of time to file a
      Tax
      Return that has not been filed have been timely filed and any such extensions
      have been granted and have not expired. All such Tax Returns were true, correct
      and complete in all material respects. 

     

    (b) All
      Taxes
      required to be paid by, with respect to, or on behalf of the Company and the
      Company Subsidiary have been paid (without regard to whether a Tax Return was
      or
      is required) or are being contested in good faith (and such contest is disclosed
      on Section 3.14(b) of the Company Disclosure Schedule). The unpaid Taxes of
      the
      Company and the Company Subsidiary do not exceed the accruals and reserves
      for
      Taxes (excluding accruals and reserves for deferred Taxes established to reflect
      timing differences between book and Tax income) set forth on the Company
      Financial Statements. 

     

    
      
        
        

      

      
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    (c) To
      the
      Knowledge of the Company and the Company Subsidiary, there are no Liens on
      any
      of the assets of the Company or the Company Subsidiary that arose in connection
      with any failure (or alleged failure) to pay any Tax. 

     

    (d) Except
      as
      set forth in Section 3.14(d) of the Company Disclosure Schedule, each of the
      Company and the Company Subsidiary have timely withheld proper and accurate
      amounts from its employees, independent contractors, directors, customers,
      suppliers, stockholders and others from whom it is or was required to withhold
      Taxes, including without limitation social security and Israeli national
      insurance, in compliance in all material respects with all applicable Laws,
      have
      timely paid all such withheld amounts to the appropriate taxing authorities,
      and
      have timely complied with all information reporting and back-up withholding
      requirements including maintenance of the required records with respect thereto,
      in connection with amounts paid to any such persons.

     

    (e) Israel
      is
      the only country in which the Company Subsidiary regularly conducts trade or
      business and whose tax authorities may seek to charge Tax on the worldwide
      profits or gains of the Company Subsidiary. The United States is the only
      country in which the Company regularly conducts trade or business and whose
      tax
      authorities may seek to charge Tax on the worldwide profits or gains of the
      Company. Each of the Company and the Company Subsidiary (i) is, and has always
      been, resident for Tax purposes solely in the jurisdiction in which it is
      incorporated; and (ii) has never had any agency, branch, place of business,
      or
      representative office in any other jurisdiction. Section 3.14(e) of the Company
      Disclosure Schedule sets forth each state, federal or national jurisdiction
      in
      which, to the Knowledge of the Company, the Company or any Company Subsidiary
      is
      required to file or has been required to file a Tax Return or is or has been
      liable for any Taxes on a “nexus” basis. 

     

    (f) Neither
      the Company nor the Company Subsidiary has waived any statute of limitations
      in
      respect of Taxes or agreed to any extension of time with respect to a Tax
      assessment, collection or deficiency.

     

    (g) The
      Company has delivered to the Parent true and complete copies of all federal,
      state local and foreign income or franchise Tax Returns, and any value added
      or
      state sales and use Tax Returns for or including the Company and the Company
      Subsidiary for all periods after December 31, 2002.

     

    (h) Neither
      the Company nor the Company Subsidiary has received notice in writing that
      it
      has not filed a Tax Return or paid Taxes required to be filed or paid, and
      no
      tax authority of a jurisdiction in which it does not file Tax Returns has
      asserted that it may be obligated to file Tax Returns in that jurisdiction.
      No
      examination or audit of any Tax Return of the Company or the Company Subsidiary
      by any Governmental Entity is currently in progress, threatened in writing
      or,
      to the Knowledge of the Company, contemplated. 

     

    
      
        
        

      

      
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    (i) Neither
      the Company nor the Company Subsidiary is a party to, or bound by any Tax
      indemnity, Tax sharing, Tax allocation or similar agreement. The Company
      Subsidiary is, and has always been, classified as an association taxable as
      a
      corporation for U.S. Tax purposes. None of the assets of the Company or the
      Company Subsidiary is an interest in an entity that is characterized as a
      partnership for U.S. federal income Tax purposes. 

     

    (j) Neither
      the Company nor the Company Subsidiary has been or is required to make any
      adjustment pursuant to Code Section 481(a) or any similar provision of state,
      local or foreign tax law by reason of any change in any accounting methods,
      there is no application pending with any taxing authority requesting permission
      for any changes in any of its accounting methods for Tax purposes and no taxing
      authority has proposed any such adjustment or change in accounting
      method.

     

    (k) Neither
      the Company nor the Company Subsidiary has distributed stock of another Person,
      or has had its stock distributed by another Person, in a transaction that was
      purported or intended to be governed in whole or in part by Section 355 or
      Section 361 of the Code.

     

    (l) Neither
      the Company nor the Company Subsidiary (1) is or has been a member of an
      affiliated or similar group filing, or required to file, a consolidated,
      combined, unitary or similar income Tax Return, or (2) has any liability for
      Taxes of any person under Treasury Regulations section 1.1502-6 (or any similar
      provision of state, local or foreign law), as a transferee or successor, by
      agreement or otherwise. 

     

    (m) Neither
      the Company nor the Company Subsidiary has participated in a “reportable
      transaction” as described in Treasury Regulations section 1.6011-4. The Company
      Subsidiary has not undertaken since January 1, 2007 any transaction which will
      require special reporting in accordance with the Israeli Income Tax Regulations
      (Tax Planning Requiring Reporting)(Temporary Provisions), 2006 regarding
      aggressive tax planning.

     

    (n) Except
      as
      contemplated in Section 5.07 or with respect to the U.S. Withholding Liability,
      there are no tax rulings, requests for rulings or closing agreements relating
      to
      the Company or the Company Subsidiary that could affect their liability for
      Taxes for any period after the Closing Date, nor to the Company’s Knowledge has
      any shareholder of the Company or anyone acting on its or their behalf requested
      or received a ruling from any Tax authority or signed a closing or other
      agreement with any Tax
      authority with
      respect to such shareholder’s shares and options in the Company. Neither the
      Company nor the Company Subsidiary will be required to include in the gross
      income, or exclude any item of deduction, for a taxable period ending after
      the
      Closing Date income or gain attributable to a prior taxable period that was
      not
      recognized in that prior Taxable period as a result of the installment method,
      the completed contract method or the cash method of accounting, any other method
      of accounting, section 263A of the Code, any prepaid amount, or any intercompany
      transaction. The Company has provided to the Parent complete and correct copies
      of all private letter rulings, revenue agent reports, information document
      requests, notices of proposed deficiencies, deficiency notices, protests,
      petitions, closing agreements, settlement agreements, pending ruling requests
      and any similar documents submitted by, received by or agreed to by or on behalf
      of any of the Company or the Company Subsidiary, and relating to Taxes for
      all
      Taxable periods for which the statute of limitations has not yet
      expired.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    (o) The
      shares of the Company do not constitute a United States real property interest
      within the meaning of IRC Section 897. The Company is not, and has not been,
      a
      United States real property holding corporation within the meaning of Section
      897(c)(2) of the Code during the applicable period specified in Section
      897(c)(l)(A)(ii) of the Code.

     

    (p) Neither
      the Company nor any of the Company Subsidiaries has paid or has any obligation
      to pay, and no payments will be made in connection with the transactions
      contemplated by this Agreement of, any amount that constitutes an excess
      parachute payment within the meaning of Code section 280G.

     

    (q) To
      the
      Knowledge of the Company, neither the Company nor the Company Subsidiary has
      treated as an independent contractor any Person not properly classified as
      such.

     

    (r) There
      is
      no outstanding power of attorney of the Company or the Company Subsidiary with
      respect to Taxes.

     

    (s) Neither
      the Company nor the Company Subsidiary has ever requested or received any Tax
      benefit or incentive under the laws of the State of Israel.

     

    (t) To
      the
      Company’s Knowledge, there has been no indication from any Tax authority that
      the consummation of the Merger would adversely affect the ability of the Company
      or the Company Subsidiary to set off for Tax purposes in the future any and
      all
      losses accumulated by Company or the Company Subsidiaries as of the Effective
      Time. There is no limitation on the utilization by the Company or the Company
      Subsidiary of their respective net operating losses, built-in losses, Tax
      credits, or similar items (other than any such limitation prescribed under
      applicable Law or arising as a result of the consummation of the transactions
      contemplated by this Agreement).

     

    (u) The
      Company and its shareholders are not subject to any restrictions or limitations
      pursuant to Part E2 of the Israeli Tax Code or pursuant to any tax ruling made
      with reference to the provisions of Part E2 (other than any restrictions or
      limitations contained in, or as a result of, the Israeli Withholding Tax
      Ruling).

     

    (v) The
      Company and the Company Subsidiary are in material compliance with all transfer
      pricing requirements in the United States and Israel. None of the transactions
      between the Company or the Company Subsidiary and other related Persons
      (including the Affiliates) would reasonably be expected to be subject to any
      material adjustment, apportionment, allocation or recharacterization under
      Section 482 of the Code or any similar U.S. state or local or non-U.S. Legal
      Requirement, and all of such transactions have been effected on an arm’s length
      basis. Each of the Company and the Company Subsidiary has contemporaneous
      documentation of, and the Company has made available to Parent, all transfer
      pricing methodologies, including a transfer pricing analysis or study for each
      material or ongoing intercompany or related party transaction. The Company
      has
      made available to Parent all intercompany Contracts relating to transfer
      pricing.

     

    
      
        
        

      

      
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    SECTION
      3.15. Insurance.
      Each of
      the Company and the Company Subsidiary is presently insured, and since inception
      has been insured, against such risks as companies engaged in a similar business
      would, in accordance with good business practice, customarily be insured. The
      policies of fire, theft, liability and other insurance maintained with respect
      to the assets or businesses of the Company and the Company Subsidiary provide
      adequate coverage against loss. There is no material claim pending under any
      of
      such policies as to which coverage has been questioned, denied or disputed
      by
      the underwriters of such policies. The Company has heretofore furnished to
      the
      Parent a complete and correct list as of the date hereof of all insurance
      policies maintained by the Company and the Company Subsidiary, and has made
      available to the Parent complete and correct copies of all such policies,
      together with all riders and amendments thereto. All such policies are in full
      force and effect and all premiums due thereon have been paid to the date hereof.
      Each of the Company and the Company Subsidiary has complied in all material
      respects with the terms of such policies. The Company has no Knowledge of any
      threatened termination of, or material premium increase with respect to, any
      of
      such policies. The Company is not aware of any facts or circumstances which
      could reasonably be expected to result in the denial of insurance coverage
      under
      policies issued to the Company or the Company Subsidiary in respect of such
      suits, claims, actions, proceedings and investigations. 

     

    SECTION
      3.16. Properties.
      Except
      as set forth in Section 3.16 of the Company Disclosure Schedule, each of the
      Company and the Company Subsidiary has good and marketable title to all of
      its
      properties and assets, free and clear of all material Liens, whether tangible
      or
      intangible, real, personal or mixed, reflected in the Company Financial
      Statements as being owned by the Company or the Company Subsidiary as of the
      date thereof, other than (i) any properties or assets that have been sold or
      otherwise disposed of in the ordinary course of business since the date of
      such
      financial statements, (ii) Liens disclosed in the notes to the Company Financial
      Statements and (iii) Liens arising in the ordinary course of business after
      the
      date of such financial statements. All properties used in the Company’s and the
      Company Subsidiary’s operations are reflected in the balance sheets included in
      the Company Financial Statements to the extent GAAP require the same to be
      reflected. All buildings, and all fixtures, equipment and other property and
      assets that are material to its business on a consolidated basis, and held
      under
      leases or sub-leases by the Company or the Company Subsidiary, are held under
      valid instruments enforceable against the Company or the Company Subsidiary
      in
      accordance with their respective terms, subject to applicable Laws of
      bankruptcy, insolvency or similar Laws relating to creditors’ rights generally
      and to general principles of equity (whether applied in a proceeding in law
      or
      equity). Substantially all of the Company’s and Company Subsidiary’s equipment
      in regular use has been reasonably maintained and is in serviceable condition,
      reasonable wear and tear excepted. The Company owns or has the valid and
      subsisting right to use all assets and properties necessary to operate the
      Company’s business in the manner presently conducted.

     

    SECTION
      3.17. Affiliates.
      Section 3.17 of the Company Disclosure Schedule sets forth the names and
      addresses of each Person who is, in the Company’s reasonable judgment, an
      Affiliate of the Company. The Company is not indebted to, nor does it owe any
      contractual commitment or arrangement to, with or for the benefit of, any
      director, officer, employee, Affiliate or agent of the Company or the Company
      Subsidiary (except for amounts due as normal salaries and bonuses and in
      reimbursement of ordinary expenses). To the Company’s Knowledge, no current or
      former director, officer, employee, Affiliate or agent of the Company is
      presently, or, in the last three years has been, the direct or indirect owner
      of
      an interest in any corporation, firm, association, or business organization
      which is a present (or potential) competitor, supplier or customer of the
      Company or the Company Subsidiary. Except for normal salaries and bonuses and
      reimbursement of ordinary expenses, since December 31, 2006, neither the Company
      nor the Company Subsidiary has made any payments, loans or advances of any
      kind,
      or paid any dividends or distributions of any kind, to or for the benefit of
      the
      Stockholders, or any of their respective affiliates, associates or family
      members.

     

    
      
        
        

      

      
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    SECTION
      3.18. Brokers.
      No
      broker, finder or investment banker is entitled to any brokerage, finder’s or
      other fee or commission in connection with the transactions contemplated hereby
      based upon arrangements made by or on behalf of the Company. 

     

    SECTION
      3.19. Certain
      Business Practices.
      Neither
      the Company, the Company Subsidiary, nor, to the Company’s Knowledge, any
      directors, officers, agents or employees of the Company or the Company
      Subsidiary (in their capacities as such) has (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 unlawful payment.

     

    SECTION
      3.20. Accounts
      Receivable.
      Subject
      to any reserves set forth in the Company Financial Statements, the accounts
      receivable shown on the Company Financial Statements represent bona fide claims
      for sales and other charges, and are not subject to discount except for normal
      cash and immaterial trade discounts. The amount carried for doubtful accounts
      and allowances disclosed in the Company Financial Statements was calculated
      in
      accordance with GAAP and in a manner consistent with prior periods and is
      sufficient to provide for any losses which may be sustained on realization
      of
      the receivables.

     

    SECTION
      3.21. Customers
      and Suppliers.
      No
      customer which individually accounted for more than 1% of the Company’s gross
      revenues during the 12-month period preceding the date hereof has canceled
      or
      otherwise terminated, or made any written threat to the Company to cancel or
      otherwise terminate or decrease its relationship with the Company, or has
      decreased materially its relationship with the Company or its usage of the
      services or products of the Company, as the case may be. 

     

    SECTION
      3.22. Grants,
      Incentives and Subsidies.
      Neither
      the Company nor the Company Subsidiary has received any grants, incentive and
      subsidy programs (“Grants”)
      from
      any Governmental Authority. Neither the Company nor the Company Subsidiary
      is
      subject to any obligation to pay royalties in connection with sales of its
      products.

     

    SECTION
      3.23. Bank
      Accounts.
      Section
      3.23 of the Company Disclosure Schedule contains a complete and correct list
      of
      each bank account or safe deposit box of the Company, the names and locations
      of
      all banks in which the Company has accounts or safe deposit boxes, and the
      names
      of all persons authorized to draw thereon or to have access
      thereto.

     

    
      
        
        

      

      
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    SECTION
      3.24. Books
      and Records.
      The
      books of accounts, minute books, stock record books, and other records of the
      Company have been maintained in accordance with sound business practices in
      all
      material respects. The stock or ownership records of the Company as presented
      to
      Parent fairly and accurately reflect the record ownership of all of its
      outstanding shares of capital stock and securities convertible or exercisable
      into shares of capital stock.

     

    SECTION
      3.25. Customer
      and Expert Listing.
      Section
      3.25 of the Company Disclosure Schedule contains a complete listing of the
      20
      largest revenue-generating customers and the 20 largest revenue-generating
      experts for each of the fiscal years ended December 31, 2004, December 31,
      2005
      and December 31, 2006.

     

    SECTION
      3.26. Privacy
      and Data Security.
      The
      Company has provided true and correct copies of all privacy policies adopted
      by
      the Company or the Company Subsidiary in connection with its operations. Each
      of
      the Company and the Company Subsidiary (i) has complied with all Privacy Laws
      and other laws regarding the disclosure of data, (ii) has not violated its
      applicable privacy policies and (iii) has taken commercially reasonable steps
      to
      protect and maintain the confidential nature of the personal information
      provided to the Company or the Company Subsidiary in accordance with its
      applicable privacy policies. For purposes of this section, “Privacy
      Laws”
shall
      mean any law related to the protection, privacy and security of sensitive
      personal information, including without limitation, the Gramm-Leach-Bliley
      Act,
      the European Union Data Protection Directive, Israel’s Protection of Privacy
      Act, 1981 and any similar federal, state or foreign law or
      regulation.

     

    SECTION
      3.27. No
      Conflict with OFAC Laws.
      Neither
      the Company nor the Company Subsidiary nor, to the knowledge of the Company,
      any
      director, officer, agent, employee or affiliate of the Company or the Company
      Subsidiary is currently subject to any U.S. sanctions administered by the Office
      of Foreign Assets Control of the U.S. Treasury Department (“OFAC”). In addition,
      neither the Company nor the Company Subsidiary nor, to the knowledge of the
      Company, any director, officer, agent, employee or affiliate of the Company
      or
      the Company Subsidiary, has undertaken any transaction that is in violation
      of
      any applicable OFAC sanctions regulations, as set forth under 31 CFR Chapter
      V.

     

    SECTION
      3.28. Representations
      Complete.
      None of
      the representations or warranties made by the Stockholders or the Company herein
      or in any Company Disclosure Schedule hereto, or certificate furnished by the
      Company pursuant to this Agreement, when all such documents are read together
      in
      their entirety, contains or will contain at the Closing Date any untrue
      statement of a material fact, or omits or will omit at the Closing Date to
      state
      any material fact necessary in order to make the statements contained herein
      or
      therein, in the light of the circumstances under which made, not
      misleading.

     

    


     

    
      
        
        

      

      
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    IV.

     

    REPRESENTATIONS
      AND WARRANTIES OF PARENT

     

    The
      Parent represents and warrants to the Company and the Stockholders as
      follows:

     

    SECTION
      4.01. Organization
      and Qualification; Subsidiaries.
      The
      Parent and each directly and indirectly owned Subsidiary of the Parent (the
      “Parent
      Subsidiaries”)
      has
      been duly incorporated or otherwise organized and is validly existing and in
      good standing (to the extent applicable) under the Laws of the jurisdiction
      of
      its incorporation or organization, as the case may be, and has the requisite
      corporate power and authority and all necessary governmental approvals to own,
      lease and operate its properties and to carry on its business as it is now
      being
      conducted. The Parent, and each Parent Subsidiary is duly qualified or licensed
      to do business, and is in good standing (to the extent applicable), in each
      jurisdiction where the character of the properties owned, leased or operated
      by
      it or the nature of its business makes such qualification or licensing
      necessary, except for such failures to be so qualified or licensed and in good
      standing that would not reasonably be expected to have, individually or in
      the
      aggregate, a Parent Material Adverse Effect.

     

    SECTION
      4.02. Capitalization.

     

    (a) The
      authorized capital stock of the Parent consists of (i) 100,000,000 shares of
      the
      Parent Common Stock, of which 42,928,944 shares were issued and outstanding
      at
      March 31, 2007, and (ii) 5,000,000 shares of Preferred Stock, par value $0.001
      per share, of which no shares were issued and outstanding at March 31, 2007.
      All
      of the outstanding shares of the Parent Common Stock have been validly issued
      and are fully paid and nonassessable and not subject to preemptive
      rights.

     

    (b) All
      of
      the shares of the Parent Common Stock to be issued to the Stockholders in
      connection with the transactions contemplated hereby, when issued in accordance
      with this Agreement, will be validly issued, fully paid and nonassessable and
      not subject to any contractual restriction, preemptive rights or similar
      contractual rights granted by the Parent (other than those restrictions set
      forth in the Lock-up Agreements and in the Trading Restriction
      Agreements).

     

    SECTION
      4.03. Authority
      Relative to this Agreement.
      The
      Parent has all necessary corporate power and authority to execute and deliver
      this Agreement and each other Transaction Document to which it is a party,
      to
      perform its obligations hereunder and thereunder and to consummate the
      transactions contemplated hereby and thereby. The execution and delivery of
      this
      Agreement and each other Transaction Document to which it is a party by the
      Parent and the consummation by the Parent of the transactions contemplated
      hereby and thereby have been duly and validly authorized by all necessary
      corporate action, and no other corporate proceedings on the part of the Parent
      are necessary to authorize this Agreement or any other Transaction Document
      to
      which the Parent is a party or to consummate such transactions. This Agreement
      has been, and each other Transaction Document to which it is a party will be,
      duly executed and delivered by the Parent. Assuming the due authorization,
      execution and delivery by the Company and the Stockholders, this Agreement
      constitutes, and each other Transaction Document to which it is a party will
      constitute, legal, valid and binding obligations of the Parent, enforceable
      against the Parent in accordance with their respective terms, except to the
      extent that enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization or other Laws affecting the enforcement of creditors’ rights
      generally or by general equitable principles. 

     

    
      
        
        

      

      
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    SECTION
      4.04. No
      Conflict; Required Filings and Consents.

     

    (a) The
      execution and delivery of this Agreement by the Parent and the execution and
      delivery of each other Transaction Document to which it is a party by the
      Parent, do not, and the performance by the Parent of its obligations hereunder
      and/or thereunder, as the case may be, and the consummation of the transactions
      contemplated hereby and thereby will not, (i) conflict with or violate any
      provision of the Organizational Documents of the Parent or any equivalent
      organizational documents of any Parent Subsidiary, (ii) conflict with or violate
      any Law applicable to the Parent or any other Parent Subsidiary or by which
      any
      property or asset of the Parent or any Parent Subsidiary is bound or affected
      or
      (iii) result in any breach of or constitute a default (or an event which
      with the giving of notice or lapse of time or both could reasonably be expected
      to become a default) under, or give to others any right of termination,
      amendment, acceleration or cancellation of, or result in the creation of a
      lien
      or other encumbrance on any material property or asset of the Parent or any
      Parent Subsidiary pursuant to, any material note, bond, mortgage, indenture,
      contract, agreement, lease, license, permit, franchise or other instrument
      or
      obligation in each case, with respect to clauses (ii) and (iii) of this Section
      4.04(a), which will result in a Parent Material Adverse Effect. 

     

    (b) Assuming
      the accuracy of the representations and warranties set forth in Article III
      and
      in the Stockholder Representation Letter Agreements, the execution and delivery
      of this Agreement by the Parent do not, and the execution of each other
      Transaction Document to which it is a party will not, and the performance by
      the
      Parent of its obligations hereunder and the consummation of the transactions
      contemplated hereby will not, require any consent, approval, authorization
      or
      permit of, or filing by the Parent with or notification by the Parent to, any
      Governmental Entity.

     

    SECTION
      4.05. SEC
      Filings.

     

    (a) Parent
      has filed or furnished all forms, reports and documents (the “Parent
      SEC Documents”)
      required to be filed or furnished by it under the Exchange Act.

     

    (b) At
      the
      time of filing thereof, the Parent SEC Documents complied as to form in all
      material respects with the requirements of the Exchange Act and did not contain
      any untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements made therein, in the light of the
      circumstances under which they were made, not misleading.

     

    SECTION
      4.06. Absence
      of Certain Changes or Events.
      Except
      as disclosed in the Parent SEC Documents filed prior to the date of this
      Agreement, since the date of Parent’s most-recently filed Form 10-Q, there has
      not been (a) any condition, event, occurrence or development that has had or
      would reasonably be expected to have, individually or in the aggregate, a Parent
      Material Adverse Effect or which would reasonably be expected to prevent, hinder
      or materially delay the ability of the Parent to consummate the transactions
      contemplated hereby, or (b) any event pursuant to which the Parent or any Parent
      Subsidiary has incurred any material liabilities (direct, contingent or
      otherwise) or engaged in any material transaction or entered into any material
      agreement, in each case, outside of the ordinary course of business which,
      individually or in the aggregate, would be reasonably expected to have a Parent
      Material Adverse Effect.

     

    
      
        
        

      

      
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    SECTION
      4.07. Brokers.
      No
      broker, finder or investment banker is entitled to any brokerage, finder’s or
      other fee or commission in connection with the transactions contemplated hereby
      based upon arrangements made by or on behalf of the Parent.

     

    SECTION
      4.08. S-3
      Eligibility.
      Parent
      is currently eligible to register the resale of Parent Common Stock to be issued
      to the Stockholders in connection with this Agreement on a registration
      statement on Form S-3 under the Securities Act.

     

    SECTION
      4.09. Representations
      Complete.
      None of
      the representations or warranties made by the Parent herein or in any
      certificate furnished by the Parent pursuant to this Agreement, when all such
      documents are read together in their entirety, contains or will contain at
      the
      Closing Date any untrue statement of a material fact, or omits or will omit
      at
      the Closing Date to state any material fact necessary in order to make the
      statements contained herein or therein, in the light of the circumstances under
      which made, not misleading.

     

    V.

     

    COVENANTS

     

    SECTION
      5.01. Conduct
      of Business by the Company Pending the Closing.
      The
      Company agrees that, between the date of this Agreement and the Closing Date,
      unless the Parent shall otherwise agree in writing, (x) the businesses of the
      Company and the Company Subsidiary shall be conducted only in, and neither
      the
      Company nor the Company Subsidiary shall take any action except in, the ordinary
      course of business consistent with past practice and (y) the Company shall
      use
      its reasonable efforts to keep available the services of such of the current
      officers, significant employees and consultants of the Company and the Company
      Subsidiary and to preserve the current relationships of the Company and the
      Company Subsidiary with such of the corporate partners, customers, suppliers
      and
      other Persons with which the Company or the Company Subsidiary has significant
      business relations in order to preserve substantially intact its business
      organization. By way of amplification and not limitation, the Company shall
      not,
      between the date of this Agreement and the Closing Date, directly or indirectly,
      do, or agree to do, or cause the Company Subsidiary to do, any of the following
      without the prior written consent of the Parent, which consent shall not be
      unreasonably withheld, or as expressly contemplated by this
      Agreement:

     

    (a) amend
      or
      otherwise change its Organizational Documents;

     

    (b) (i)
      other
      than with respect to currently outstanding Company Options, issue or sell or
      authorize the issuance or sale of any shares of capital stock of the Company
      of
      any class, or securities convertible into or exchangeable or exercisable for
      any
      shares of such capital stock, or any options, warrants or other rights of any
      kind to acquire any shares of such capital stock, or any other ownership
      interest (including, without limitation, any phantom interest), of the Company;
      or (ii) pledge, dispose of, grant, transfer, lease, license, guarantee or
      encumber, or authorize the pledge, disposition, grant, transfer, lease, license
      or encumbrance of any property or assets of the Company, except sales of
      inventory in the ordinary course of business consistent with past
      practice;

     

    
      
        
        

      

      
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    (c) (i)
      acquire
      (including, without limitation, by merger, consolidation, or acquisition of
      stock or assets) any interest in any corporation, partnership, other business
      organization or Person or any division thereof; (ii) incur any indebtedness
      for borrowed money or issue any debt securities or assume, guarantee or endorse,
      or otherwise as an accommodation become responsible for, the obligations of
      any
      Person for borrowed money or make any loans or advances material to the
      business, assets, liabilities, financial condition or results of operations
      of
      the Company, other than pursuant to existing agreements which have been
      disclosed to Parent in the Company Disclosure Schedule; (iii) terminate,
      cancel or request any material change in, or agree to any material change in,
      any Material Contract or License Agreement; (iv) make or authorize any
      capital expenditure, other than capital expenditures in the ordinary course
      of
      business consistent with past practice that have been budgeted for fiscal year
      2007 and included in the 2007 budget previously provided to the Parent, and
      that
      are not, in the aggregate, in excess of $100,000 for the Company; or
      (v) enter into or amend any contract, agreement, commitment or arrangement
      that, if fully performed, would not be permitted under this
      Section 5.01(c);

     

    (d) declare,
      set aside, make or pay any dividend or other distribution, payable in cash,
      stock, property or otherwise, with respect to any of its capital stock
or
      outstanding options;

     

    (e) reclassify,
      combine, split, subdivide or redeem, purchase or otherwise acquire, directly
      or
      indirectly, any of its capital stock or outstanding options;

     

    (f) amend
      the
      terms of, repurchase, redeem or otherwise acquire, any of its securities or
      propose to do any of the foregoing;

     

    (g) except
      as
      required to comply with obligations under existing agreements of the Company
      as
      in effect on the date hereof, which obligations are specifically disclosed
      to
      Parent in the Company Disclosure Schedule, (i) increase the compensation payable
      or to become payable to its directors, officers, consultants or employees;
      (ii)
      grant any rights to severance or termination pay to its directors, officers,
      consultants or employees; or (iii) enter into any employment or severance
      agreement which provides benefits upon a change in control of the Company that
      would be triggered by the transactions contemplated hereby with, any director,
      officer, consultant or other employee of the Company or the Company Subsidiary,
      in each case who is not currently entitled to such benefits; (iv) establish,
      adopt, enter into or amend any collective bargaining, bonus, profit sharing,
      thrift, compensation, stock option, restricted stock, pension, retirement,
      deferred compensation, employment, termination, severance or other plan,
      agreement, trust, fund, policy or arrangement for the benefit of any director,
      officer, consultant or employee of the Company or the Company Subsidiary, except
      to the extent required by applicable Law or the terms of a collective bargaining
      agreement; or (v) enter into or amend any contract, agreement, commitment or
      arrangement between the Company or the Company Subsidiary and any of the
      Company’s directors, officers, consultants or employees;

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    (h) pay,
      discharge or satisfy any claims, liabilities or obligations (absolute, accrued,
      asserted or unasserted, contingent, committed or otherwise) in excess of
      $12,500, other than the payment, discharge or satisfaction in the ordinary
      course of business and consistent with past practice of liabilities reflected
      or
      reserved against on the audited consolidated balance sheet of the Company at
      December 31, 2006 previously presented to the Parent;

     

    (i) make
      any
      change with respect to the Company’s accounting policies, principles, methods or
      procedures, including, without limitation, revenue recognition policies, other
      than as required by GAAP;

     

    (j) make
      any
      Tax election, settlement or compromise in
      connection with any Tax liability in excess of $12,500, or make any application
      for, negotiate or receive a Tax ruling or arrangement, whether or not in
      connection with the Merger, on the Company’s own behalf or on behalf of any of
      its shareholders in connection with the Merger, in each case, except as
      explicitly contemplated in this Agreement;

     

    (k) make
      any
      Tax election, settlement or compromise with respect to the U.S. Withholding
      Liability, except in accordance with the procedures set forth in Sections
      5.06(d);

     

    (l) cancel
      or
      terminate any insurance policy naming it as a beneficiary or a loss payee,
      except in the ordinary and usual course of business;

     

    (m) maintain
      the books and records of the Company in a manner not consistent with past
      business practices; 

     

    (n) 
      take any
      action which would materially adversely affect the goodwill of its suppliers,
      customers and others with whom it has business relations;

     

    (o) fail
      to
      pay and perform all of its debts, obligations and liabilities as and when due
      and all leases, agreements, contracts and other commitments to which it is
      a
      party in accordance with the terms and provisions thereof;

     

    (p) fail
      to
      comply in all material respects with all Laws that may be applicable to its
      business; 

     

    (q) apply
      for
      or receive any Grants; or 

     

    (r) authorize
      or enter into any formal or informal agreement or otherwise make any commitment
      to do any of the foregoing or to take any action which would make any of the
      representations or warranties of the Company contained in this Agreement untrue
      or incorrect or prevent the Company from performing or cause the Company not
      to
      perform its covenants hereunder or result in any of the conditions to the
      Closing set forth herein not being satisfied.

     

    SECTION
      5.02. Notices
      of Certain Events.
      Each of
      the Parent and the Company shall give prompt notice to the other of (i) any
      notice or other communication from any Person alleging that the consent of
      such
      Person is or may be required in connection with the transactions contemplated
      hereby; (ii) any notice or other communication from any Governmental Entity
      in connection with the transactions contemplated hereby; (iii) any actions,
      suits, claims, investigations or proceedings commenced or, to its Knowledge,
      threatened (in each case, after the date hereof) against, relating to or
      involving or otherwise affecting the Parent or the Company, or that relate
      to
      the consummation of the transactions contemplated hereby; (iv) the
      occurrence of a default or event that, with the giving of notice or lapse of
      time or both, will become a default under any Material Contract; and
      (v) any change that could reasonably be expected to have a Parent Material
      Adverse Effect or a Company Material Adverse Effect, or to delay or impede
      the
      ability of the Parent, the Company or any of the Stockholders to perform their
      respective obligations under this Agreement and to effect the consummation
      of
      the transactions contemplated hereby.

     

    
      
        
        

      

      
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    SECTION
      5.03. Access
      to Information; Confidentiality.

     

    (a) Except
      as
      required pursuant to any confidentiality agreement or similar agreement or
      arrangement to which the Parent or the Company is a party or pursuant to
      applicable Law or the regulations or requirements of any stock exchange or
      other
      regulatory organization with whose rules a party hereto is required to comply,
      from the date of this Agreement to the Closing Date, the Parent and the Company
      shall (i) provide to the other (and its officers, directors, employees,
      accountants, consultants, legal counsel, agents and other representatives
      (collectively, “Representatives”))
      access at reasonable times upon reasonable prior notice to its officers,
      employees, agents, properties, offices and other facilities and to the books
      and
      records thereof, and (ii) furnish reasonably promptly such information
      concerning its business, properties, contracts, assets, liabilities and
      personnel as the other party or its Representatives may reasonably request.
      No
      investigation conducted pursuant to this Section 5.03 shall affect or be
      deemed to modify any representation or warranty made in this
      Agreement.

     

    (b) The
      parties hereto shall comply with, and shall cause their respective
      Representatives to comply with, all of their respective obligations under the
      Confidentiality Agreement with respect to the information disclosed pursuant
      to
      this Section 5.03 or pursuant to the Confidentiality Agreement. The
      Stockholders hereby agree to be bound by the terms of the Confidentiality
      Agreement as if they were parties thereto.

     

    SECTION
      5.04. No
      Solicitation of Transactions.
      Until
      the earlier of termination of this Agreement or the Closing Date, subject to
      applicable fiduciary duties, the Company shall not, directly or indirectly,
      and
      shall cause the Company’s Representatives not to, directly or indirectly,
      solicit, initiate or encourage (including by way of furnishing nonpublic
      information), any inquiries or the making of any proposal or offer (including,
      without limitation, any proposal or offer to the Stockholders) that constitutes,
      or may reasonably be expected to lead to, any Competing Transaction, or enter
      into or maintain or continue discussions or negotiate with any Person in
      furtherance of such inquiries or to obtain a Competing Transaction, or agree
      to
      or endorse any Competing Transaction, or authorize or permit any of the
      Company’s Representatives to take any such action. Any violation of the
      restrictions set forth in this Section 5.04 by any Representative of the
      Company, whether or not such Person is purporting to act on behalf of the
      Company or otherwise, shall be deemed to be a breach of this Section 5.04
      by the Company. The Company shall notify the Parent promptly if any proposal
      or
      offer, or any inquiry or contact with any Person with respect thereto, regarding
      a Competing Transaction is made, such notice to include the identity of the
      Person making such proposal, offer, inquiry or contact, and the terms of such
      Competing Transaction, and shall keep the Parent apprised, on a current basis,
      of the status of such Competing Transaction. The Company immediately shall
      cease
      and cause to be terminated all existing discussions or negotiations with any
      parties conducted heretofore with respect to a Competing Transaction. The
      Company shall not release any third party from, or waive any provision of,
      any
      confidentiality or standstill agreement to which it is a party.

     

    
      
        
        

      

      
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    SECTION
      5.05. Further
      Action; Consents; Filings.

     

    (a) Upon
      the
      terms and subject to the conditions hereof, each of the parties hereto shall
      use
      commercially reasonable efforts to (i) take, or cause to be taken, all
      appropriate action, and do, or cause to be done, all things necessary, proper
      or
      advisable under applicable Law or otherwise to consummate and make effective
      the
      transactions contemplated hereby, (ii) obtain from Governmental Entities
      any consents, licenses, permits, waivers, approvals, authorizations or orders
      required to be obtained or made by the Parent or the Company in connection
      with
      the authorization, execution and delivery of this Agreement and the consummation
      of the transactions contemplated hereby and (iii) make all necessary
      filings, and thereafter make any other required or appropriate submissions,
      with
      respect to this Agreement and the transactions contemplated hereby required
      under any applicable Laws. The parties hereto shall cooperate and consult with
      each other in connection with the making of all such filings.

     

    (b) Each
      of
      the Company and the Parent will give any notices to third Persons, and use
      commercially reasonable efforts to obtain any consents from third Persons
      necessary, proper or advisable (as determined in good faith by the Parent with
      respect to such notices or consents to be delivered or obtained by the Company)
      to consummate the transactions contemplated by this Agreement.

     

    SECTION
      5.06. Certain
      Tax Matters.

     

    (a) Transfer
      Taxes.
      All
      transfer, documentary, sales, use, stamp, registration and other such Taxes
      and
      fees (including any penalties and interest) incurred in connection with this
      Agreement, shall be paid by the Stockholders when due, and the Stockholders
      will, at their own expense, file all necessary Tax Returns and other
      documentation with respect to all such transfer, documentary, sales, use, stamp,
      registration and other Taxes and fees, and, if required by applicable law,
      the
      Parent will, and will cause its Affiliates to, join in the execution of any
      such
      Tax Returns and other documentation.

     

    
      
        
        

      

      
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    (b) Tax
      Returns.
      Except
      to the extent inconsistent with the second sentence of Section 5.06(d), the
      Parent shall prepare or cause to be prepared and file or cause to be filed
      all
      Tax Returns for the Company and the Company Subsidiary for Taxable periods
      ending on or prior to the Closing Date and for Taxable periods beginning before
      the Closing Date and ending after the Closing Date (“Straddle Returns”) which
      are filed after the Closing Date. Except with respect to Taxes relating to
      the
      U.S. Withholding Liability, the parties agree that the Escrow Agent shall pay
      to
      the Parent first from the Cash Escrow Amount, and second, if no amount remains
      in the Cash Escrow Amount, from the Stock Escrow Amount (subject to, and in
      accordance with, the provisions of Article VIII and the Escrow Agreement),
      an
      amount equal to (A) all Taxes shown on such Tax Returns for taxable periods
      ending on or prior to the Closing Date; and (B) the portion of such Taxes
      shown on Straddle Returns which relates to the portion of such Taxable period
      ending on the Closing Date, in each case only to the extent such Taxes are
      not
      reflected in the reserve for Tax liability (rather than any reserve for deferred
      Taxes established to reflect timing differences between book and Tax income)
      on
      the Final Closing Balance Sheet (as finally determined). For purposes of this
      Section, in the case of any Taxes that are imposed on a periodic basis and
      are
      payable for a Taxable period that includes (but does not end on) the Closing
      Date, the portion of such Tax which relates to the portion of such Taxable
      period ending on the Closing Date shall (x) in the case of any Taxes other
      than
      Taxes based upon or related to income or receipts, be deemed to be the amount
      of
      such Tax for the entire Taxable period multiplied by a fraction the numerator
      of
      which is the number of days in the Taxable period ending on the Closing Date
      and
      the denominator of which is the number of days in the entire Taxable period,
      and
      (y) in the case of any Tax based upon or related to income or receipts be deemed
      equal to the amount which would be payable if the relevant Taxable period ended
      on the Closing Date. All determinations necessary to give effect to the
      foregoing allocations shall be made in a manner consistent with prior practice
      of the Company and the Company Subsidiary. The Parent shall permit the
      Stockholders’ Representative, at its expense, an opportunity to review and make
      reasonable comment on any Tax Returns prepared pursuant to this Section 5.06(b)
      prior to filing if the payment of the Tax shown as due and payable on such
      Tax
      Return would give rise to an indemnification obligation by the Stockholders
      pursuant to Article VIII. The Parent agrees to consider reasonable comments
      provided by the Stockholders’ Representative to Parent within seven (7) days
      after receipt of such draft or pro forma Tax Return. If the Parent does not
      accept a reasonable comment, the Stockholders’ Representative may dispute such
      decision as part of any determination of the Stockholders’ obligation to
      indemnity the Parent for the Taxes to which such reasonable comments related;
      provided, however, that Parent shall not be required to delay, or cause to
      be
      delayed, the filing of such Tax Return pending resolution of such
      dispute.

     

    (c) Tax
      Sharing Agreements.
      All tax
      sharing agreements or similar agreements with respect to or involving the
      Company or the Company Subsidiary shall be terminated as of the Closing Date
      and, after the Closing Date, neither the Company nor the Company Subsidiary
      shall be bound thereby or have any liability thereunder.

     

    
      
        
        

      

      
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    (d) Tax
      Contests; U.S. Withholding Liability.
      The
      Parent shall have the right to control any claim, contest or assessment relating
      to Taxes and may settle such claim in its sole and absolute discretion;
      provided, however, that no claim that would give rise to an indemnification
      obligation for Taxes by the Stockholders pursuant to Article VIII shall be
      settled without the consent of the Stockholders’ Representative, which consent
      shall not be unreasonably withheld. Notwithstanding the prior sentence, with
      respect to the resolution of the U.S. Withholding Liability, the Stockholders’
Representative shall be permitted, to the extent reasonably practicable under
      the circumstances, to control the choice of the Company’s counsel and, subject
      to the conditions of this Section 5.06(d), to be principally responsible
      (through counsel) for all discussions with and/or written submissions to the
      IRS
      (it being understood that following the Closing, the Surviving Corporation
      shall
      pay the fees of such counsel but shall be reimbursed as set forth in Section
      3(l) of the Escrow Agreement); provided, however, that (a) Parent shall have
      the
      right to participate fully in preparing, formulating, conducting or submitting
      any communications to the IRS, (b) no substantive discussion or written
      submission shall be made without the prior written consent of the Parent, (c)
      the U.S. Withholding Liability may not be settled or otherwise resolved or
      compromised without the prior written consent of the Parent, which consent
      shall
      not be unreasonably withheld, and (d) if the Stockholders’ Representative has
      assumed control of the discussions with and/or written submissions to the IRS,
      the Stockholders’ Representative shall be required to use its best efforts to
      resolve the U.S. Withholding Liability expediently and in accordance with
      Section 3(i) of the Escrow Agreement. If the Stockholders’ Representative (or
      counsel chosen by the Stockholders’ Representative to represent the Company and
      Company Subsidiary) fails to comply with any of the foregoing conditions, all
      control and responsibility for resolving the U.S. Withholding Liability shall
      revert to the Parent. With respect to Taxes relating to the U.S. Withholding
      Liability, the parties agree that the Escrow Agent shall pay to the Parent
      first
      from the Cash Escrow Amount, and second, if no amount remains in the Cash Escrow
      Amount, from the Stock Escrow Amount (subject to, and in accordance with, the
      provisions of Article VIII and Section 3 of the Escrow Agreement), an amount
      equal to the amount specified in Section 3(i)(B) of the Escrow Agreement.
      Notwithstanding the foregoing provisions of this Section 5.06(d), with respect
      to the resolution of the U.S. Withholding Liability, any legal expenses incurred
      by the Company (prior to the Effective Time) or by the Surviving Corporation
      (following the Effective Time) shall be reimbursed in accordance with, and
      to
      the extent provided in, the provisions of Section 3(l) of the Escrow
      Agreement.

     

    SECTION
      5.07. Israeli
      Tax Rulings.
      As soon
      as reasonably practicable after the execution of this Agreement, the Company
      Subsidiary shall cause its Israeli counsel and/or Israeli consultants to prepare
      and file with the ITA one or more applications, or, in the case of applications
      that have previously been filed, to continue to use its best efforts to
      diligently pursue in good faith the receipt from the ITA of one or more rulings
      that:

     

    (a) confirm
      that (A) the payment of consideration pursuant to Section 2.04(e) for Company
      Options subject to the statutory holding period for Section 102 Plans will
      not
      result in a requirement for an immediate Israeli tax payment and that the
      Israeli taxation will be deferred until completion of such statutory holding
      period and release of the cash consideration, as applicable; and (B) that the
      statutory holding period under any grants under Section 102 Plans will continue
      uninterrupted from the original date of grant and will not recommence as a
      result of the transactions contemplated herein (which ruling may be subject
      to
      customary conditions regularly associated with such a ruling) (the “Israeli
      Options Tax Ruling”);

     

    (b) 
      (A)
      provides for a full exemption to the Parent, the Paying Agent, the Company
      and
      its or their agents from withholding requirements as a result of a deferral
      of
      Israeli income tax pursuant to Section 104H of the Israeli Tax Code, or (B)
      to
      the extent that the Parent is not fully exempt from withholding as a result
      of
      (A) above, that either: (x) exempts Parent, the Paying Agent, the Company and
      its or their agents from any obligation to withhold Israeli Tax at source from
      any consideration payable or otherwise deliverable pursuant to this Agreement,
      or clarifies that no such obligation exists; or (y) clearly instructs Parent,
      the Paying Agent, the Company and their agents how and when such withholding
      at
      source is to be performed, and in particular, with respect to the classes or
      categories of holders or former holders of Shares from which Tax is to be
      withheld (if any), and the rate or rates of withholding to be applied (the
      “Israeli
      Withholding Tax Ruling”),
      provided that no withholding under Israeli Tax law will be made from any
      consideration payable hereunder to a holder of Company Preferred Stock or
      Company Common Stock to the extent that such stockholder has provided Parent
      with an appropriate unequivocal exemption or confirmation of a reduced
      withholding rate issued by the ITA or such other document, opinion or form
      which, in the sole discretion of Parent, is sufficient to enable Parent to
      reasonably conclude that no withholding or a reduced rate of withholding, as
      applicable, of Israeli Tax is required with respect to the particular
      Stockholder in question, prior to the time such payment is made;
      and

     

    
      
        
        

      

      
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    (c) provides
      that the Escrow Amount shall not be subject to Israeli Tax until actually
      received by the persons entitled thereto (the “Israeli
      Escrow Tax Ruling”,
      and
      together with Israeli Options Tax Ruling and the Israeli Withholding Tax Ruling,
      the “Israeli
      Tax Rulings”).

     

    The
      Company shall, and shall instruct its representatives and advisors to, cooperate
      with the Parent and its Israeli counsel, consultants, representatives and other
      advisors with respect to the preparation and filing of such applications and
      in
      the preparation of any written or oral submissions that may be necessary, proper
      or advisable to obtain the Israeli Tax Rulings. Subject to the terms and
      conditions hereof, the Company shall use its best efforts to promptly take,
      or
      cause to be taken, all action and to do, or cause to be done, all things
      necessary, proper or advisable under applicable Law to obtain the Israeli Tax
      Rulings, as promptly as practicable. The Company, its representatives and
      advisors shall not make any application to, or conduct any negotiation with,
      the
      Israeli Tax authorities with respect to any matter relating to the subject
      matter of the Israeli Tax Rulings without prior coordination with Parent, and
      will enable Parent’s representatives and advisors to participate in all
      discussions and meetings relating thereto. Parent shall reasonably cooperate
      with the Company and its Israeli counsel, consultants, representatives and
      other
      advisors in the course of such participation and to the extent reasonably
      necessary to enable the Company to obtain the Israeli Tax Rulings. To the extent
      that the Parent’s representative and advisors elect not to participate in any
      meeting or discussion, the Company’s representatives and advisors shall provide
      a prompt and full report of the discussions held. In any event, the final text
      of the Israeli Tax Rulings shall in all circumstances be subject to the prior
      written consent
      of
      Parent, which consent shall not be unreasonably withheld, it being understood
      that Parent may withhold such consent if the Israeli Tax Rulings: (i) impose
      restrictions or limitations upon Parent or the Company; (ii) require Parent
      to
      withhold cash in excess of the difference between (x) the Cash Merger
      Consideration, and (y) the Cash Escrow Amount; or (iii) fail to fully address
      the matters described in subsections (a) through (c) above to the reasonable
      satisfaction of Parent.

     

    SECTION
      5.08. Israel
      Securities Exemption.
      As
      promptly as practicable after the date hereof, Parent shall cause its Israeli
      counsel to prepare and file with the ISA an application for an exemption from
      the requirements of the Israeli Securities Law concerning the publication of
      a
      prospectus in respect of (a) the exchange of the Company Options for options
      to
      purchase Parent Common Stock, and (b) the exchange of the Company Restricted
      Shares for Parent Restricted Shares, pursuant to Section 15D of the Securities
      Law of Israel (the “Israeli Securities Exemption”). The Company shall cooperate
      and cause its Representatives to cooperate with Parent in connection with the
      preparation and filing of such application and in the preparation of any written
      or oral submissions that may be necessary, proper or advisable to obtain the
      Israeli Securities Exemption.
      Parent
      shall use its best efforts to obtain the exemption from the requirements of
      the
      Israeli Securities Law described in the first sentence of this Section
      5.08.

     

    
      
        
        

      

      
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    SECTION
      5.09. Public
      Announcements.
      Until
      the earlier of termination of this Agreement or the Closing Date, the Parent,
      on
      the one hand, and the Company and the Stockholders, on the other hand, will
      consult with each other before issuing any press release or otherwise making
      any
      public statements with respect to the Agreement or the transactions contemplated
      hereby and shall not issue any such press release or make any such public
      statement that is not approved by the other party, which approval shall not
      be
      unreasonably withheld. Notwithstanding the foregoing, nothing contained in
      this
      Section shall impair either Party’s compliance with any Law applicable to it, or
      any requirements of the SEC or the national securities exchange or other stock
      market on which such Party’s securities are traded; and, provided further, that
      Parent may issue external media and investor communications related to the
      transactions contemplated by this Agreement if such external media or investor
      communications are in
      accordance with Parent’s past practice for disclosures related to similar
      transactions.

     

    SECTION
      5.10. Exercise
      of Certain Outstanding Company Options.
      Each
      holder of outstanding options set forth on Schedule
      II
      hereto
      shall exercise all of their outstanding options to purchase Company Preferred
      Stock and/or Company Common Stock immediately prior to the Closing.

     

    SECTION
      5.11. Trading
      Restriction Agreements Legend.
      Each
      Parent Stock Certificate issued to a Principal Stockholder, as well as any
      stock
      certificate representing Parent Common Stock issued to a Principal Stockholder
      following the Closing upon the exercise of outstanding options, shall bear
      the
      following legend:

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A TRADING RESTRICTION
      AGREEMENT, A COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF LIVEPERSON,
      INC.”

     

    SECTION
      5.12. Directors
      and Officers Insurance.
      For a
      period of four years after the Closing Date, Parent will cause the
      Surviving Corporation to maintain directors’ and officers’ liability insurance
      with one or more reputable unaffiliated third-party insurers maintained by
      the
      Company covering those persons who are covered by the Company’s directors’ and
      officers’ liability insurance policy as of the date hereof for events occurring
      prior to the Closing Date, on terms and conditions that are, in the
      aggregate, no less favorable to the insured than those applicable to the current
      directors and officers of the Company; provided,
      however,
      that
      Parent shall satisfy its obligations under this section by purchasing
      a “tail” policy under the Company’s existing directors’ and officers’ insurance
      policy which (i) has an effective term of four years from
      the Closing Date, (ii) covers those persons who are currently covered
      by the Company’s directors’ and officers’ insurance policy in effect as of the
      date hereof for actions and omissions occurring on or prior to the Closing
      Date,
      and (iii) contains terms and conditions that are, in the aggregate, no less
      favorable to the insured than those of the Company’s directors’ and officers’
insurance policy in effect as of the date hereof; provided, that, if the Company
      directs the Parent no less than 30 days prior to the Closing that the Company
      wishes to maintain directors’
      and officers’ liability insurance
      coverage for a longer period of time than set forth above, the Parent will
      extend such coverage for the additional period so directed. All costs associated
      with the purchase of the “tail” policy contemplated by this Section 5.12 shall
      reduce the Cash Merger Consideration dollar for dollar to the extent the total
      costs of such policy exceeds $48,000.

     

    
      
        
        

      

      
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    SECTION
      5.13. Optionholder
      Waiver Letters.
      The
      Company shall use its best efforts to cause the sufficient number of the holders
      of Company Options to execute a waiver of their right to exercise such options
      prior to Closing as is necessary to provide for the satisfaction of the
      condition precedent set forth in Section 7.02(t); provided, however, that the
      form of such waiver must be reasonably acceptable to the Parent. 

     

    SECTION
      5.14. Withholding
      Instructions.
      The
      Stockholders’ Representative will use its best efforts to cause each holder of
      Company Common Stock, Company Preferred Stock or Company Options to provide
      the
      appropriate parties, whether the Parent or otherwise, in advance of any
      distribution with a completed Form W-9 or W-8 or any relevant information as
      described in Section 5.07, as applicable, as reasonably requested and necessary
      to comply with the Tax obligations in connection with the transactions
      contemplated by the Transaction Documents, as well as causing each recipient
      of
      other payments pursuant to Section 2.05 of this Agreement to provide the
      information required in order for the Company and/or the Paying Agent to comply
      with any and all Tax obligations in connection with those payments.

     

    SECTION
      5.15. Registration
      Statement on Form S-8. Within
      30
      days after the Effective Time, the Parent shall file a registration statement
      on
      Form S-8 (or any successor form) under the Securities Act with respect to
      all shares of Parent Common Stock subject to the Company Options assumed in
      accordance with Section 2.4(e) that may be registered on a Form S-8,
      and shall use its best efforts to maintain the effectiveness of such
      registration statement for so long as such options remain
      outstanding.

     

    SECTION
      5.16. Company
      and/or Stockholders’ Representative to Instruct Paying Agent with Respect to
      Certain Matters.
      The
      Company and/or the Stockholders’ Representative shall instruct the Paying Agent
      to make any payments referred to in Section 2.05(a)(i) and in Section 5.13
      as
      promptly as possible following the Closing. In addition, the Company and/or
      the
      Stockholders’ Representative shall instruct the Paying Agent to make the cash
      bonus payments described in Section 2.05(a)(ii) as promptly as possible
      following the Closing and the cash bonus payments described in the paragraph
      following Section 2.05(a)(ii) as promptly as possible following the Escrow
      Fund
      Distribution Date.

     

    VI.

     

    STOCK
      MATTERS

     

    SECTION
      6.01. Required
      Registration.
      As
      promptly as practicable after the Closing, unless prohibited by Law, but in
      no
      event later than forty-five (45) days after the Closing Date (or, if such date
      is any day on which the filing of documents with the SEC pursuant to the
      Exchange Act or the rules and regulations thereunder may not be made, then
      the
      next day thereafter on which the filing of such documents with the SEC may
      be
      made), Parent agrees to file a Registration Statement on Form S-3 or other
      applicable registration statement (the “Re-Sale
      Registration Statement”)
      to
      register the resale of any and all of the shares of Parent Common Stock issued
      or issuable pursuant to this Agreement (together, the “Shares”).
      Parent shall use its commercially reasonable efforts to cause the SEC to declare
      the Re-Sale Registration Statement effective no later than the 90th day after
      the Closing; provided,
      however,
      that
      not less than five days prior to the filing of the Re-Sale Registration
      Statement, Parent shall provide the Stockholders’
      Representative
      with a
      copy of the Re-Sale Registration Statement proposed to be filed and Parent
      agrees to consider all appropriate comments provided by the Stockholders’
Representative with respect to the Re-Sale Registration Statement for inclusion
      in the Re-Sale Registration Statement; provided,
      further,
      that
      Parent shall have no liability to the Stockholders’ Representative for the
      failure of the SEC to declare the Re-Sale Registration Statement effective
      no
      later than the 90th day after the Closing if such failure is a result, directly
      or indirectly, of the Stockholders’ Representative’s failure to cooperate with
      Parent pursuant to the terms of this Agreement. Parent shall thereafter maintain
      the effectiveness of the Re-Sale Registration Statement until the earlier of
      (a)
      the date on which all the Shares have been sold pursuant to the Re-Sale
      Registration Statement or Rule 144 promulgated under the Securities Act
      (“Rule
      144”),
      and
      (b) such time as Parent reasonably determines, based on an opinion of counsel,
      that the holders of the Shares will be eligible to sell under Rule 144 all
      of
      the Shares then owned by them within the volume limitations imposed by paragraph
      (e) of Rule 144 in the three-month period immediately following the termination
      of the effectiveness of the Re-Sale Registration Statement. Unless earlier
      terminated pursuant to the provisions of the preceding sentence, Parent’s
      obligations contained in this Section 6.01 shall terminate on the third
      anniversary of the Closing Date.

     

    
      
        
        

      

      
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    SECTION
      6.02. Registration
      Procedures.

     

    (a) In
      case
      of the Re-Sale Registration Statement effected by Parent subject to this Article
      VI, Parent shall keep the Seller advised in writing as to the initiation of
      such
      registration, and as to the completion thereof. In addition, subject to Section
      6.01 above, Parent shall, to the extent applicable to the Re-Sale Registration
      Statement:

     

    (i) prepare
      and file with the SEC such amendments and supplements to the Re-Sale
      Registration Statement as may be necessary to keep such registration
      continuously effective and free from any material misstatement or omission
      necessary to make the statements therein, in light of the circumstances, not
      misleading, and comply with provisions of the Securities Act with respect to
      the
      disposition of all securities covered thereby during the period referred to
      in
      Section 6.01;

     

    (ii) update,
      correct, amend and supplement the Re-Sale Registration Statement as
      necessary;

     

    (iii) notify
      the Stockholders’ Representative promptly when the Re-Sale Registration
      Statement is declared effective by the SEC, and furnish such number of
      prospectuses, including preliminary prospectuses, and other documents incident
      thereto as the Stockholders’ Representative may reasonably request from time to
      time;

     

    
      
        
        

      

      
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    (iv) use
      its
      commercially reasonable efforts to register or qualify the Shares under such
      other securities or blue sky laws of such jurisdictions of the United States
      where an exemption is not available and as the Stockholders’ Representative may
      reasonably request to enable it to consummate the disposition in such
      jurisdiction of the Shares (provided that
      Parent
      will not be required to (A) qualify generally to do business in any jurisdiction
      where it would not otherwise be required to qualify but for this provision,
      or
      (B) consent to general service of process in any such jurisdiction, or (C)
      subject itself to taxation in any jurisdiction where it is not already subject
      to taxation);

     

    (v) notify
      the Stockholders’ Representative at any time when a prospectus relating to the
      Shares is required to be delivered under the Securities Act, of the happening
      of
      any event as a result of which the prospectus included in the Re-Sale
      Registration Statement contains an untrue statement of a material fact or omits
      any fact necessary to make the statements therein not misleading, and subject
      to
      Section 6.02(d), Parent will promptly prepare a supplement or amendment to
      such
      prospectus, so that, as thereafter delivered to purchasers of such shares,
      such
      prospectus will not contain any untrue statements of a material fact or omit
      to
      state any fact necessary to make the statements therein, in light of the
      circumstances under which they were made, not misleading;

     

    (vi) cause
      all
      such Shares to be listed on each securities exchange or market on which similar
      securities issued by Parent are then listed and obtain all necessary approvals
      from such exchange or market for trading thereon;

     

    (vii) provide
      a
      transfer agent and registrar for all such Shares not later than the effective
      date of the Re-Sale Registration Statement; 

     

    (viii) upon
      the
      sale of any Shares pursuant to the Re-Sale Registration Statement, direct the
      transfer agent to remove the Securities Act legend from all certificates or
      other instruments evidencing the Shares;

     

    (ix) With
      a
      view to making available to the Stockholders’ Representative the benefits of
      certain rules and regulations of the SEC that at any time permit the sale of
      the
      Shares to the public without registration, so long as any Shares are
      outstanding, Parent shall use its commercially reasonable efforts for a period
      of three years following the Closing Date:

     

    
      	 	
              (a)

            	
              to
                make and keep public information available, as those terms are understood
                and defined in Rule 144(c) under the Securities
                Act;

            


    

     

    
      	 	
              (b)

            	
              to
                file with the SEC in a timely manner all reports and other documents
                required of Parent under the Exchange Act;
                and

            


    

     

    
      
        
        

      

      
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              (c)

            	
              to
                furnish to the Stockholders’ Representative upon any reasonable request a
                written statement by Parent as to its compliance with the public
                information requirements of Rule 144(c) under the Securities Act;
                and

            


    

     

    (x) To
      advise
      the Stockholders’ Representative promptly after it has received notice or
      obtained knowledge of the existence of any stop order by the SEC delaying or
      suspending the effectiveness of the Re-Sale Registration Statement or of the
      initiation or threat of any proceeding for that purpose, and to make every
      commercially reasonable effort to obtain the withdrawal of any order suspending
      the effectiveness of the Re-Sale Registration Statement at the earliest possible
      time.

     

    (b) Notwithstanding
      anything stated or implied to the contrary in Section 6.02(a) above, Parent
      shall not be required to consent to any underwritten offering of the Shares
      or
      to any specific underwriter participating in any underwritten public offering
      of
      the Shares.

     

    (c) The
      holders of the Shares agree that upon receipt of any notice from Parent of
      the
      happening of any event of the kind described in Section 6.02(a)(v), and subject
      to Section 6.02(d), such holders will forthwith discontinue their disposition
      of
      Shares pursuant to the registration statement relating to such Shares until
      the
      receipt by such holders of the copies of the supplemented or amended prospectus
      contemplated by Section 6.02(a)(v) (such interim period in which the holders
      of
      the Shares are unable to dispose of the Shares is hereinafter referred to as
      the
“Blocked
      Period”)
      and,
      if so directed by Parent, will deliver to Parent at Parent’s expense all copies,
      other than permanent file copies, then in such holders’ possession, of the
      prospectus relating to such Shares current at the time of receipt of such
      notice. However, if during the Blocked Period, Parent proposes to register
      on a
      registration statement (other than a resale registration statement on Form
      S-3
      or a registration statement on Form S-8 or Form S-4, or their successors, or
      any
      other form for a similar limited purpose, or any registration statement covering
      only securities proposed to be issued in exchange for securities or assets
      of
      another corporation) any of its stock or other securities in connection with
      the
      public offering of such stock or securities, then Parent shall use its best
      efforts to include such Shares as requested by the holders thereof in such
      registration statement filed by Parent with the SEC; provided, however, that
      in
      the case of an underwritten public offering, if the underwriters advise Parent
      that marketing factors require a limitation of the number of shares to be
      underwritten, Parent and its underwriters shall allocate the number of shares
      to
      be registered in such offering as follows: (i) first, to Parent; (ii)
      second, to the holders of the Shares; and (iii) thereafter, to the extent
      additional securities may be included in such offering, to any other holders
      of
      Parent securities other than the holders of the Shares. Parent’s obligation to
      maintain the effectiveness of the Re-Sale Registration Statement pursuant to
      Section 6.1 above shall be extended by the number of days during which a Blocked
      Period shall be in effect pursuant to the provisions of this Section
      6.2(c).

     

    
      
        
        

      

      
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    (d) In
      addition to any discontinuance of the disposition of Shares under Section
      6.02(c) above, Parent, upon the happening of any pending corporate development,
      public filing with the SEC or similar event, that, in the good faith judgment
      of
      Parent’s Board of Directors based on the advice of counsel, renders it advisable
      to suspend use of the prospectus, may, for no more than sixty (60) days in
      the
      aggregate per event (each a “Suspension
      Event”),
      suspend use of the prospectus, on written notice to the holders of the Shares
      (which notice will not disclose the content of any material non-public
      information and will indicate the date of the beginning and end of the intended
      period of suspension, if known), in which case the holders of the Shares shall
      discontinue disposition of Shares covered by the registration statement related
      to such Shares or prospectus until copies of a supplemented or amended
      prospectus are distributed to them or until they are advised in writing by
      Parent that sales of Shares under the applicable prospectus may be resumed
      and
      have received copies of any additional or supplemental filings that are
      incorporated or deemed incorporated by reference in any such prospectus. The
      suspension and notice thereof described in this Section 6.02(d) shall be subject
      to the confidentiality provisions of Section 5.03 herein and the Nondisclosure
      Agreement and shall not be disclosed by the Seller. Parent may not utilize
      the
      suspension described in this Section 6.02(d) for more than two (2) Suspension
      Events in any twelve-month period. Parent will use commercially reasonably
      efforts to ensure that the use of the Re-Sale Registration Statement and
      prospectus may be resumed as promptly as practicable.

     

    (e) Except
      as
      required by Law, all expenses incurred by Parent in complying with this Article
      VI, including but not limited to, all registration, qualification and filing
      fees, printing expenses, fees and disbursements of counsel and accountants
      for
      Parent, blue sky fees and expenses (including fees and disbursements of counsel
      related to all blue sky matters) incurred in connection with any registration,
      qualification or compliance pursuant to this Article VI shall be borne by
      Parent. All underwriting discounts and selling commissions applicable to a
      sale
      incurred in connection with any registration of Shares and the legal fees and
      other expenses of the holders of the Shares shall be borne by such
      holders.

     

    If
      Shares
      are included in any registration, the holders of such Shares shall furnish
      Parent such information regarding itself or themselves as Parent may reasonably
      request and as shall be required in connection with any registration (or
      amendment or supplement thereto), referred to in this Agreement, and the holders
      of such Shares shall indemnify Parent with respect thereto in accordance with
      Article VIII hereof. The holders of such Shares agree and acknowledge that
      Parent may rely on such information as being true and correct for purposes
      of
      preparing and filing the Re-Sale Registration Statement at the time of filing
      thereof and at the time it is declared effective, unless the holders of such
      Shares have notified Parent in writing to the contrary prior to such
      time.

     

    SECTION
      6.03. Transfer
      of Shares.
      A
      holder of the Shares may transfer all or any part of his or its Shares to any
      Affiliate of such holder; provided,
      that
      any such
      transfer shall be effected in full compliance with all applicable federal and
      state securities laws, including, but not limited to, the Securities Act, and
      further provided,
      that in
      any such case, it shall be a condition to any such transfer that the transferee
      execute an agreement stating that the transferee is receiving and holding the
      Shares subject to the provisions of this Agreement, and there shall be no
      further transfer of such Shares except in accordance with this Agreement. Parent
      will effect such transfer of restricted certificates and will promptly amend
      or
      supplement the Prospectus forming a part of the Re-Sale Registration Statement
      to add the transferee to the selling stockholders in the Re-Sale Registration
      Statement; provided that
      the
      transferor and transferee shall be required to provide Parent with the
      information requested by Parent in this Agreement, information reasonably
      necessary for Parent to determine that the transfer was effected in accordance
      with all applicable federal and state securities laws, including, but not
      limited to, the Securities Act, and all other information reasonably requested
      by Parent from time to time in connection with any transfer, registration,
      qualification or compliance referred to in this Article VI.

     

    
      
        
        

      

      
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    SECTION
      6.04. Restricted
      Securities, Stock Certificate Legend.
      The
      holders of the Shares acknowledge that the issuance by Parent of the shares
      of
      Common Stock to such holders hereunder has not and will not be registered under
      the Securities Act by reason of their contemplated issuance in transactions
      exempt from the registration and prospectus delivery requirements of the
      Securities Act pursuant to Section 4(2) thereof, and that such shares will
      be
      deemed “restricted securities” for purposes of the Securities Act. The holders
      of the Shares acknowledge that any certificate or certificates representing
      shares of Common Stock issued pursuant to this Agreement shall bear the
      following legend, in addition to any legend that may be required by any Law
      or
      any other provisions of this Agreement:

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
      HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (i) AN EFFECTIVE
      REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR (ii) AN OPINION
      OF
      COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
      UNDER
      SUCH ACT.”

     

    SECTION
      6.05. Reservation
      of Stock.
      Parent
      shall at all times reserve and keep available out of its authorized but unissued
      shares of Common Stock, solely for the purpose of issuance of the shares of
      Common Stock hereunder, a sufficient number of shares of Common Stock to issue
      such shares, and if at any time the number of authorized but unissued shares
      of
      Common Stock shall not be sufficient to issue the shares of Common Stock that
      Parent is required to issue pursuant to the terms of this Agreement, in addition
      to such other remedies as shall be available to the holders of the Shares,
      Parent will use its reasonable efforts to take such corporate action as may,
      in
      the opinion of its counsel, be necessary to increase its authorized but unissued
      shares of Common Stock to such number of shares as shall be sufficient for
      such
      purposes.

     

    SECTION
      6.06. No
      Stockholder Rights.
      Prior
      to the issuance of the shares of Common Stock pursuant to the terms of this
      Agreement, the holders of the Shares shall not be entitled, by virtue of this
      Agreement, to any rights of a stockholder of Parent, including (without
      limitation) the right to vote, receive dividends or other distributions or
      be
      notified of stockholder meetings, and except as otherwise provided herein,
      the
      holders of the Shares shall not be entitled to any notice or other communication
      concerning the business or affairs of the Buyer, except as required by
      Law.

     

    SECTION
      6.07. Compliance
      with Law or Stock Exchange.
      If at
      any time after Closing, any new Law, rule or regulation is enacted or
      promulgated by (i) any national securities exchange; or (ii) any federal or
      state securities authority having jurisdiction over Parent, which must be
      satisfied in the good faith determination of the Parent as a condition of the
      issuance of any shares of Common Stock pursuant to the terms of this Agreement,
      or if the consent or approval of a Governmental Entity to the issuance of any
      shares of Common Stock must be obtained as a condition to such issuance, in
      whole or in part, then Parent may delay such issuance until such condition
      has
      been satisfied. Parent and the holders of the Shares mutually agree to cooperate
      with one another to satisfy any such condition as promptly as possible and
      to
      provide any information, representations and agreements as are required for
      such
      purpose.

     

    
      
        
        

      

      
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    VII.

     

    CONDITIONS
      PRECEDENT

     

    SECTION
      7.01. Conditions
      Precedent to the Obligations of Each Party.
      The
      obligations of the parties hereto to consummate the transactions contemplated
      by
      this Agreement are subject to the satisfaction or, if permitted by applicable
      Law, waiver of the following conditions:

     

    (a) no
      court
      of competent jurisdiction shall have issued or entered any order, writ,
      injunction or decree, and no other Governmental Entity shall have issued any
      order, which is then in effect and has the effect of making the transactions
      contemplated hereby illegal or otherwise prohibiting its consummation;


     

    (b) all
      consents, approvals and authorizations legally required to be obtained to
      consummate the transactions contemplated hereby shall have been obtained from
      all Governmental Entities, except where the failure to obtain any such consent,
      approval or authorization would not reasonably be expected to result in a Parent
      Material Adverse Effect or a Company Material Adverse Effect; and

     

    (c) The
      stockholder consent approving this Agreement required under the DGCL and the
      Company’s Certificate of Incorporation (the “Required
      Stockholder Consent”)
      was
      obtained.

     

    SECTION
      7.02. Conditions
      Precedent to the Obligation of the Parent.
      The
      obligation of the Parent to consummate the transactions contemplated by this
      Agreement is subject, at the option of the Parent, to the satisfaction at or
      prior to the Closing Date of each of the following conditions:

     

    (a) Accuracy
      of Representations and Warranties.
      The
      representations and warranties of the Company contained in this Agreement or
      in
      any certificate or document delivered to the Parent pursuant hereto shall have
      been true and correct as of the date of this Agreement and as of the Closing
      Date as though made at and as of the Closing Date (or, in the case of those
      representations and warranties that are made as of a particular date or period,
      which shall have been true and correct at and as of such date or period), except
      for inaccuracies in such representations or warranties the circumstances giving
      rise to which, individually or in the aggregate, will not have a Company
      Material Adverse Effect (disregarding any materiality or Company Material
      Adverse Effect qualification contained in any such representation or warranty),
      and, if the Closing Date shall occur on a date other than the date hereof,
      the
      Company shall have so certified to the Parent in writing.

     

    
      
        
        

      

      
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    (b) Compliance
      with Covenants.
      The
      Company shall have performed and complied in all material respects with all
      terms, agreements, covenants and conditions of this Agreement to be performed
      or
      complied with by it at or prior to the Closing Date, and, if the Closing Date
      shall occur on a date other than the date hereof, the Company shall have so
      certified to the Parent in writing.

     

    (c) All
      Proceedings To Be Satisfactory.
      All
      proceedings to be taken by the Company in connection with the transactions
      contemplated hereby and all documents incident thereto shall be reasonably
      satisfactory in form and substance to the Parent and its counsel, and the Parent
      and said counsel shall have received all such counterpart originals or certified
      or other copies of such documents as they may reasonably request.

     

    (d) No
      Material Adverse Change.
      There
      shall not have occurred since December 31, 2006 any Company Material Adverse
      Effect, and, if the Closing Date shall occur on a date other than the date
      hereof, the Company shall have so certified to the Parent in
      writing.

     

    (e) Dissenters’
      Rights.
      Holders
      of not more than 5% of the shares of Company Capital Stock entitled to vote
      on
      the Merger shall have exercised and perfected, or be entitled to exercise or
      perfect, appraisal rights in accordance with Section 262 of the
      DGCL.

     

    (f) Opinion
      of U.S. Counsel.
      The
      Parent shall have received the opinion of Pepper Hamilton LLP, counsel to the
      Company, in substantially the form of Exhibit
      C
      hereto.

     

    (g) Opinion
      of Israeli Counsel.
      The
      Parent shall have received the opinion of Goldfarb, Levy, Eran, Meiri & Co.,
      Law Offices, Israeli counsel to the Company, in substantially the form of
Exhibit
      D
      hereto.

     

    (h) Consents
      and Approvals.
      The
      authorizations, consents, waivers and approvals set forth in Section
      7.02(h) of the Company Disclosure Schedule hereto
      shall
      have been duly obtained and shall be in form and substance reasonably
      satisfactory to counsel for the Parent.

     

    (i) SAS
      100.
      The
      Parent shall have received a review report, reasonably satisfactory in form
      and
      substance to the Parent, from the Company’s independent public accountants,
      pursuant to Statement of Accounting Standards No. 100.

     

    (j) Employment
      Agreements.
      Employment Agreements in substantially the form set forth in Exhibit B hereto
      and otherwise in form and substance satisfactory to the Parent and its counsel
      shall have been executed and delivered by the Company and each of the
      Founders.

     

    (k) Charter
      Amendment.
      The
      Charter Amendment shall have been accepted as filed with the Secretary of State
      of the State of Delaware.

     

    (l) Board
      Resignations.
      The
      Parent shall have received from each Person who is, immediately prior to the
      Closing Date, a director of the Company or any of its Subsidiaries, his or
      her
      written resignation, effective as of the Closing Date, from such position.
      

     

    
      
        
        

      

      
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    (m) Termination
      of Agreements.
      All
      agreements among the Stockholders relating to the Company shall have been
      terminated and of no further force or effect as of the Closing
      Date.

     

    (n) Exercise
      of Certain Outstanding Company Options.
      Each
      holder of outstanding options set forth on Schedule
      II
      hereto
      shall exercise all of their outstanding options to purchase Company Preferred
      Stock and/or Company Common Stock immediately prior to the Closing.

     

    (o) Lock-up
      Agreement of Founders.
      Each
      Founder shall have entered into a Lock-up Agreement with the Parent,
      substantially in the form of Exhibit F hereto.

     

    (p) Trading
      Restriction Agreements.
      The
      Trading Restriction Agreements shall have been executed by each of the Principal
      Stockholders in accordance with the provisions of, and subject to the exceptions
      set forth in, Section 2.14.

     

    (q) Escrow
      Agreement.
      The
      Stockholders’ Representative and the Escrow Agent shall have executed and
      delivered the Escrow Agreement, substantially in the form of Exhibit A
      hereto.

     

    (r) Paying
      Agent Agreement.
      The
      Stockholders’ Representative and the Paying Agent shall have executed and
      delivered a Paying Agent Agreement, on reasonable and customary terms,
      consistent with the terms and conditions described in this Agreement and in
      the
      Escrow Agreement, and otherwise on terms reasonably acceptable to both the
      Parent and the Stockholders’ Representative, including, without limitation, a
      provision that the Parent and the Stockholders will share equally the fees
      and
      expenses of such Paying Agent payable under the Agreement.

     

    (s) Supporting
      Documents.
      On or
      prior to the Closing Date, the Parent and its counsel shall have received copies
      of the following supporting documents:

     

    (i) (A)
      the
      Certificate of Incorporation of the Company certified as of a recent date by
      the
      Secretary of State of the state in which the Company is incorporated and (B)
      a
      certificate of the Secretary of State of the state in which the Company is
      incorporated as to the due incorporation and existence of the Company and
      listing all documents on file with said official;

     

    (ii) a
      certificate of the Secretary of the Company, dated the Closing Date and
      certifying (A) that attached thereto is a true and complete copy of the By-laws
      of the Company as in effect on the date of such certification; (B) that the
      Certificate of Incorporation of the Company have not been amended since the
      date
      of the last amendment referred to in the certificate delivered pursuant to
      clause (i)(B) above and (C) the resolutions of the board of directors of the
      Company approving the execution, delivery and performance of this Agreement
      and
      the consummation of the transactions contemplated hereby; and

     

    
      
        
        

      

      
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    (iii) such
      additional supporting documents and other information with respect to the
      operations and affairs of the Company as the Parent or its counsel may
      reasonably request.

     

    All
      such
      documents shall be reasonably satisfactory in form and substance to the Parent
      and its counsel.

     

    (t) Maximum
      Number of Holders of Parent Common Stock Who are Resident in
      Israel.
      Parent
      shall not be required to issue Parent Common Stock to more than thirty-five
      (35)
      Stockholders resident in Israel.

     

    (u) FIRPTA.
      The
      Parent shall have received a statement, in a form reasonably acceptable to
      the
      Parent and in compliance with Treasury Regulation § 1.1445-2(c)(3)(i) and
      Treasury Regulation § 1.897-2(h), from the Company certifying that the interests
      in the Company are not U.S. real property interests and evidence from the
      Company demonstrating that the Company has complied with the requirement to
      notify the Internal Revenue Service pursuant to Treasury Regulation §
1.897-2(h)(2).

     

    (v) Israeli
      Withholding Tax Ruling.
      The
      Israeli Withholding Tax Ruling shall have been received, satisfying all of
      the
      conditions described in Section 5.07 hereof; provided, however, this condition
      shall be deemed to be satisfied if a withholding tax ruling satisfying all
      of
      the conditions described in Section 5.07 hereof has been offered by the ITA
      on
      terms and subject to conditions which are customary and standard under the
      circumstances.

     

    (w) Israeli
      Escrow Tax Ruling.
      The
      Israeli Escrow Tax Ruling shall have been received, satisfying all of the
      conditions described in Section 5.07 hereof; provided, however, this condition
      shall be deemed to be satisfied if an escrow tax ruling satisfying all of the
      conditions described in Section 5.07 hereof has been offered by the ITA on
      terms
      and subject to conditions which are customary and standard under the
      circumstances.

     

    SECTION
      7.03. Conditions
      Precedent to the Obligations of the Company.
      The
      obligations of the Company to consummate the transactions contemplated by this
      Agreement are subject, at the option of the Company, to the satisfaction at
      or
      prior to the Closing Date of each of the following conditions: 

     

    (a) Accuracy
      of Representations and Warranties.
      The
      representations and warranties of the Parent contained in this Agreement or
      in
      any certificate or document delivered to the Company pursuant hereto shall
      have
      been true and correct as of the date of this Agreement and as of the Closing
      Date as though made at and as of the Closing Date (or, in the case of those
      representations and warranties that are made as of a particular date or period,
      which shall have been true and correct at and as of such date or period), except
      for inaccuracies in such representations or warranties the circumstances giving
      rise to which, individually or in the aggregate, will not have a Parent Material
      Adverse Effect (disregarding any materiality or Parent Material Adverse Effect
      qualification contained in any such representation or warranty), and, if the
      Closing Date shall occur on a date other than the date hereof, the Parent shall
      have so certified to the Company in writing.

     

    
      
        
        

      

      
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    (b) Compliance
      with Covenants.
      The
      Parent shall have performed and complied in all material respects with all
      terms, agreements, covenants and conditions of this Agreement to be performed
      or
      complied with by it at or prior to the Closing Date, and, if the Closing Date
      shall occur on a date other than the date hereof, the Parent shall have so
      certified to the Company and the Stockholders in writing.

     

    (c) All
      Proceedings to Be Satisfactory.
      All
      proceedings to be taken by the Parent in connection with the transactions
      contemplated hereby and all documents incident thereto shall be reasonably
      satisfactory in form and substance to the Company and the Stockholders and
      their
      respective counsel, and the Company and the Stockholders and said counsel shall
      have received all such counterpart originals or certified or other copies of
      such documents as they may reasonably request.

     

    (d) Escrow
      Agreement.
      The
      Parent and the Escrow Agent shall have executed and delivered the Escrow
      Agreement, substantially in the form of Exhibit A hereto.

     

    (e) Paying
      Agent Agreement.
      The
      Parent and the Paying Agent shall have executed and delivered a Paying Agent
      Agreement, on reasonable and customary terms, consistent with the terms and
      conditions described in this Agreement and in the Escrow Agreement, and
      otherwise on terms reasonably acceptable to both the Parent and the
      Stockholders’ Representative, including,
      without limitation, a provision that the Parent and the Stockholders will share
      equally the fees and expenses of such Paying Agent payable under the
      Agreement.

     

    (f) Israeli
      Withholding Tax Ruling.
      The
      Stockholders shall have received the Israeli Withholding Tax Ruling, satisfying
      all of the conditions described in Section 5.07 hereof; provided, however,
      this
      condition shall be deemed to be satisfied even if such ruling does not satisfy
      the requirements specified in clauses (i) or (ii) of the last sentence of
      Section 5.07 hereof; provided, that such ruling (A) satisfies all of the other
      conditions described in Section 5.07 and (B) has been offered by the ITA on
      terms and subject to conditions which are customary and standard under the
      circumstances.

     

    (g) Israeli
      Escrow Tax Ruling.
      The
      Stockholders shall have received the Israeli Escrow Tax Ruling, satisfying
      all
      of the conditions described in Section 5.07 hereof; provided, however, this
      condition shall be deemed to be satisfied even if such ruling does not satisfy
      the requirements specified in clauses (i) or (ii) of the last sentence of
      Section 5.07 hereof; provided, that such ruling (A) satisfies all of the other
      conditions described in Section 5.07 and (B) has been offered by the ITA on
      terms and subject to conditions which are customary and standard under the
      circumstances.

     

    VIII.

     

    INDEMNIFICATION

     

    SECTION
      8.01. Survival
      of Representations and Warranties.
      The
      representations and warranties set forth in Articles III and IV will survive
      until the 18-month anniversary of the Closing Date. This Section 8.01 shall
      not
      limit any covenants or agreements of the parties hereto that by their terms
      contemplate performance after the Closing Date. 

     

    
      
        
        

      

      
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    SECTION
      8.02. [Reserved.] 

     

    SECTION
      8.03. General
      Indemnity.

     

    (a) Subject
      to the terms and conditions of this Article VIII and of the last sentence of
      this Section 8.03(a), the Stockholders agree to and will indemnify, defend
      and
      hold the Parent, the Company and the Company Subsidiary, and their respective
      officers, directors, advisors, Affiliates, agents, employees and each Person,
      if
      any, who controls or may control the Parent within the meaning of the Securities
      Act (the “Parent
      Indemnified Group”)
      harmless from and against all demands or claims, actions or causes of action,
      assessments, losses, damages, liabilities, costs and expenses, including,
      without limitation, Taxes, interest, penalties, and reasonable fees and expenses
      of attorneys, accountants or consultants (hereinafter collectively called
“Damages”),
      asserted against, resulting to, imposed upon or incurred by the
      Company,
      the
      Company Subsidiary
      or the
      Parent, by reason of, resulting from or arising out of:

     

    (i) a
      breach
      of any representation or warranty of the Company, the Company Subsidiary or
      any
      Stockholder contained in or made pursuant to this Agreement, or any facts or
      circumstances constituting such a breach; 

     

    (ii) any
      breach of any covenant or agreement of the Company, the Company Subsidiary
      or
      any Stockholder contained in or made pursuant to this Agreement or the Escrow
      Agreement;

     

    (iii) any
      Taxes, including without limitation, any Taxes described in Section 5.06(b),
      but
      not including any U.S. Withholding Liability, for any Taxable period (or portion
      thereof) ending on or before the Closing Date due and payable by the Company
      or
      the Company Subsidiary, in each case only to the extent such Taxes are not
      reflected in the reserve for Tax liability (rather than any reserve for deferred
      Taxes established to reflect timing differences between book and Tax income)
      on
      the Final Closing Balance Sheet (as finally determined); 

     

    (iv) any
      U.S.
      Withholding Liability; and

     

    (v) any
      liability incurred by members of the Parent Indemnified Group due to making
      the
      bonus payments described in Section 2.05(a)(ii) and in the paragraph following
      Section 2.05(a)(ii) of this Agreement, whether such liability derives from
      the
      recipients of such bonuses or from other Persons.

     

    In
      addition, all fees and expenses of attorneys, accountants or consultants
      relating to the resolution of the U.S. Withholding Liability shall be reimbursed
      in accordance with the provisions of Section 3(l) of the Escrow Agreement.
      For
      the avoidance of doubt, the threshold set forth in Section 8.05 shall not apply
      to reimbursements under Section 3(l) of the Escrow Agreement. 

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

    Subject
      to the terms and conditions of this Article VIII, the Parent agrees to and
      will
      indemnify, defend and hold the Company (prior to the Closing Date) and the
      Stockholders (following the Closing Date) harmless from and against all Damages
      asserted against, resulting to, imposed upon or incurred by them by reason
      of or
      resulting from or arising out of (i) a breach of any representation or warranty
      of the Parent contained in or made pursuant to this Agreement, or any facts
      or
      circumstances constituting such a breach, or (ii) any breach of any covenant
      or
      agreement of the Parent contained in or made pursuant to this Agreement or
      the
      Escrow Agreement.

     

    SECTION
      8.04. Conditions
      of Indemnification.
      Except
      with respect to any claim for Taxes which shall be governed by Section 5.06,
      the
      respective obligations and liabilities of the Stockholders, on the one hand,
      and
      the Parent, on the other hand (herein sometimes called the “indemnifying
      party”),
      to
      the other (herein sometimes called the “party
      to be indemnified”
or
      the
“indemnified
      party”)
      with
      respect to claims resulting from the assertion of liability by third parties
      shall be subject to the following terms and conditions:

     

    (a) within
      30
      days after receipt of notice of commencement of any action or the assertion
      of
      any claim by a third party, the party to be indemnified shall give the
      indemnifying party written notice thereof together with a copy of such claim,
      process or other legal pleading (provided that failure so to notify the
      indemnifying party of the assertion of a claim within such period shall not
      affect its indemnity obligation hereunder except as and to the extent that
      such
      failure shall adversely affect the defense of such claim), and the indemnifying
      party shall have the right to undertake the defense thereof by representatives
      of its own choosing; 

     

    (b) in
      the
      event that the indemnifying party, by the 30th
      day
      after receipt of notice of any such claim (or, if earlier, by the tenth day
      preceding the day on which an answer or other pleading must be served in order
      to prevent judgment by default in favor of the Person asserting such claim),
      does not elect to defend against such claim, the party to be indemnified will
      (upon further notice to the indemnifying party) have the right to undertake
      the
      defense, compromise or settlement of such claim on behalf of and for the account
      and risk of the indemnifying party, subject to the right of the indemnifying
      party to assume the defense of such claim at any time prior to settlement,
      compromise or final determination thereof;

     

    (c) anything
      in this Section 8.04 to the contrary notwithstanding, (i) if there is a
      reasonable probability that a claim may materially and adversely affect the
      indemnified party other than as a result of money damages or other money
      payments, the indemnified party shall have the right, at its own cost and
      expense, to compromise or settle such claim, but (ii) the indemnified party
      shall not, without the prior written consent of the indemnifying party, settle
      or compromise any claim or consent to the entry of any judgment which does
      not
      include as an unconditional term thereof the giving by the claimant or the
      plaintiff to the indemnifying party a release from all liability in respect
      of
      such claim; 

     

    (d) any
      rights of the indemnified party under this Article VIII based on the breach
      of a
      representation, warranty or covenant or based on the failure of such
      representation or warranty to be true as of the date hereof or the Closing
      Date
      shall not be diminished or otherwise affected in any way as a result of the
      existence of such indemnified party’s Knowledge of such breach or untruth as of
      the date hereof or as of the Closing Date, regardless of whether such Knowledge
      exists as a result of the indemnified party’s investigation or as a result of
      disclosure by the Company (or any other Person), unless such disclosures were
      set forth in this Agreement or in any applicable schedules hereto;
      and

     

    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

    (e) in
      connection with any such indemnification, the indemnified party will cooperate
      in all reasonable requests of the indemnifying party.

     

    In
      the
      event that the “indemnifying party” or the “party to be indemnified” as
      described in this Section 8.04 is the Stockholders as a group, then any notices
      required to be given to or by, and all other actions or decisions required
      to be
      taken or made by, such “indemnifying party” or the “party to be indemnified” as
      provided in this Section 8.04, may be given to or by, or may be taken or made
      by, the Stockholders’ Representative.

     

    SECTION
      8.05. Threshold
      for Damages.
      Except
in
      the
      case of Damages in respect of fraud, and the indemnities set forth in Section
      8.03(a)(iii) or 8.03(a)(iv),
      an
      Indemnified Person may not make a claim for Damages until the aggregate amount
      of claims by Indemnified Persons exceeds $100,000; provided,
      however,
      that
      once the aggregate amount of Damages of Indemnified Persons exceed such
      threshold amount, then the Indemnified Persons shall have the right to recover
      the full amounts due without regard to the threshold. In determining the amount
      of any Damage attributable to a breach, any materiality standard contained
      in a
      representation, warranty or covenant of the Stockholders or the Company shall
      be
      disregarded.

     

    SECTION
      8.06. Escrow
      Funds. 
      On the
      Closing Date, the Parent shall deliver to the Escrow Agent the Cash
      Escrow Amount and the Stock Escrow
      Amount.
      The Cash Escrow Amount and the Stock Escrow Amount shall be held by the Escrow
      Agent in separate accounts under the Escrow Agreement pursuant to the terms
      set
      forth therein. The Cash Escrow Amount shall be available solely to satisfy
      the
      indemnification obligations of the Company pursuant to Sections 8.03(a)(iii)
      and
      (iv) and to cover amounts (if any) owing to Parent pursuant to the provisions
      of
      Section 2.13(c) hereof. The Stock Escrow Amount shall be available solely to
      satisfy the indemnification obligations of the Company pursuant to Sections
      8.03(a)(i), (ii) and (iii); provided, however, that to the extent the Cash
      Escrow Amount is insufficient or unavailable to satisfy the obligations to
      which
      the Cash Escrow relates, the Parent may seek to recover any remaining Damages
      from the Stock Escrow Amount (it being understood that the Cash Escrow Account
      shall not be available to satisfy the obligations to which the Stock Escrow
      relates). Notwithstanding anything to the contrary in this Agreement or in
      any
      Transaction Document, except
      in
      the case of
      fraud,
      criminal activity, intentional misrepresentation or intentional misconduct,
      the
      parties hereby understand and agree that Parent’s sole recourse to obtain
      satisfaction of any indemnity claim made under this Article VIII shall be by
      way
      of set-off against the Cash Escrow Amount and/or the Stock Escrow Amount, as
      applicable, pursuant to the provisions of this Article VIII and the Escrow
      Agreement.

     

    SECTION
      8.07. Exclusive
      Remedy.
      Except
      in the case of fraud, criminal activity, intentional misrepresentation or
      intentional misconduct, the sole and exclusive monetary remedy for any breach
      or
      alleged breach of any representation, warranty, covenant or agreement in this
      Agreement or any Transaction Document shall be indemnification in accordance
      with this Article VIII. Except as set forth above, and in furtherance of the
      foregoing, each party hereby waives, to the fullest extent permitted by
      applicable Law, any and all other rights, claims and causes of action (including
      rights of contribution, if any) known or unknown, foreseen or unforeseen, which
      exist or may arise in the future, that it may have against the Stockholders
      or
      the Parent, as the case may be, arising under or based upon any federal, state
      or local Law.

     

    
      
        
        

      

      
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    IX.

     

    TERMINATION
      AND ABANDONMENT

     

    SECTION
      9.01. Termination.
      This
      Agreement may be terminated at any time prior to the Closing or on the Closing
      Date:

     

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

     

    (b) by
      the
      Parent, on the one hand, or the Company, on the other hand, if the Closing
      shall
      not have occurred on or before September 30, 2007, or such later date as may
      be
      agreed upon by the parties hereto, provided,
      however,
      that (X)
      if the only closing conditions that have not been satisfied are the receipt
      of
      the Israeli Withholding Tax Ruling and/or the Israeli Escrow Tax Ruling, then
      this date shall be extended to October 31, 2007, and (Y) the right to terminate
      this Agreement under this clause (b) shall not be available to any party (a
      “Defaulting
      Party”)
      whose
      failure to fulfill any obligation under this Agreement has been the cause of,
      or
      resulted in the failure of the Closing to occur on or before such
      date;

     

    (c) by
      the
      Parent, upon a breach of any representation, warranty, covenant or agreement
      on
      the part of the Company or any Stockholder set forth in this Agreement, or
      if
      any representation or warranty of the Company shall have become untrue,
      incomplete or incorrect, in either case such that the conditions set forth
      in
      Section 7.02 would not be satisfied (a “Terminating
      Company Breach”);
      provided,
      however,
      that if
      such Terminating Company Breach is curable by the Company through the exercise
      of its reasonable efforts within twenty (20) days and for so long as the Company
      continues to exercise such reasonable efforts, the Parent may not terminate
      this
      Agreement under this Section 9.01(c);

     

    (d) by
      the
      Company or the Stockholders, upon breach of any representation, warranty,
      covenant or agreement on the part of the Parent set forth in this Agreement,
      or
      if any representation or warranty of the Parent shall have become untrue,
      incomplete or incorrect, in either case such that the conditions set forth
      in
      Section 7.03 would not be satisfied (a “Terminating
      Parent Breach”);
      provided,
      however,
      that if
      such Terminating Parent Breach is curable by the Parent through the exercise
      of
      its reasonable efforts within twenty (20) days and for so long as the Parent
      continues to exercise such reasonable efforts, the Company may not terminate
      this Agreement under this Section 9.01(d); or

     

    (e) by
      either
      the Parent, on the one hand, or the Company, on the other hand, by written
      notice to such other Party(ies) if the
      Trailing Closing Average Price is
      less
      than $4.00, and the parties are not able to reach an agreement as to the number
      of shares that will comprise the Stock Merger Consideration within seven
      calendar days of the day that would have been the Closing Date if this provision
      had not been triggered.

     

    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    

    (f) by
      Parent, if the Required Stockholder Consent is not obtained within an hour
      of
      execution of this Agreement.

     

    If
      the
      Closing shall not have occurred, or this Agreement shall not have been
      terminated in accordance with this Section 9.01, by December 31, 2007, this
      Agreement shall automatically terminate on said date, provided,
      however,
      that
      such termination shall not affect the liability hereunder of any Defaulting
      Party.

     

    SECTION
      9.02. Procedure
      and Effect of Termination.
      In the
      event of termination of this Agreement and abandonment of the transactions
      contemplated hereby by any or all of the parties pursuant to Section 9.01 above,
      written notice thereof shall forthwith be given to the other parties to this
      Agreement (other than in the event of an automatic termination as provided
      in
      such Section) and this Agreement (except for this Section and Sections 9.01
      and
      10.01, which shall continue) shall terminate and the transactions contemplated
      hereby shall be abandoned, without further action by any of the parties hereto.
      If this Agreement is terminated as provided in this Agreement:

     

    (a) the
      parties hereto will promptly redeliver all documents, work papers and other
      material of any other party relating to the transactions contemplated hereby,
      whether obtained before or after the execution hereof, to the party furnishing
      the same; and

     

    (b) no
      party
      shall have any liability or further obligation to any other party to this
      Agreement pursuant to this Agreement except as provided in this Article
      IX.

     

    X.

     

    MISCELLANEOUS

     

    SECTION
      10.01. Expenses,
      Etc.

     

    (a) All
      Expenses shall be paid by the party incurring such Expenses.

     

    (b) The
      Stockholders, on the one hand, and the Parent, on the other hand, will indemnify
      the other and hold it or them harmless from and against any claims for finders’
fees or brokerage commissions in relation to or in connection with this
      Agreement as a result of any agreement or understanding between such
      indemnifying party and any third party.

     

    SECTION
      10.02. Notices.
      All
      notices which are required or may be given pursuant to the terms of this
      Agreement shall be in writing and shall be sufficient and deemed to be received
      if (i) on the date of delivery, if delivered personally, (ii) 3 days after
      mailing, if mailed by registered or certified mail, return receipt requested
      and
      postage prepaid, (iii) the day after mailing, if sent via a nationally
      recognized overnight courier service or (iv) the day after transmission, if
      sent
      via facsimile or e-mail confirmed in writing to the recipient, in each case
      as
      follows:

     

    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

    

    if
      to the
      Parent, to:

     

    LivePerson,
      Inc.

    462
      Seventh Avenue, 3rd
      Floor

    New
      York,
      New York 10018

    Attention:
      Timothy E. Bixby

    Telephone:
      (212) 609-4210 

    
      	 	 	
              Facsimile:
                (212) 695-2105

            


    

    E-mail:
      bixby@liveperson.com

    


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

     

    Wilmer
      Cutler Pickering Hale and Dorr LLP

    399
      Park
      Avenue

    New
      York,
      New York 10022

    Attention:
      Brian B. Margolis, Esq.

    
      	 	 	
              Telephone:
                (212) 230-8800

            


    

    
      	 	 	
              Facsimile:
                (212) 230-8888

            


    

    E-mail:
      brian.margolis@wilmerhale.com

     

     

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

     

    Yigal
      Arnon & Co.

    22
      Rivlin
      Street

    Jerusalem
      94263 Israel

    Attention:
      Barry Levenfeld, Adv.

    Telephone:
      011-972-2-623-9220 

    Facsimile:
      011-972-2-623-9236

    E-mail:
      barry@arnon.co.il

     

    if
      to the
      Company, to:

     

    Kasamba,
      Inc.

    4
      Hachilazon Street

    Ramat
      Gan, 52522

    Israel

    Attention:
      Shmuel Huppert, Chief Financial Officer

    Telephone:
      011-972-3-613-4710 (x.134)

    Facsimile:
      011-972-3-613-4710

    E-mail:
      shmuelh@kasamba.com

    


    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

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

    


    Goldfarb,
      Levy, Eran, Meiri & Co., Law Offices

    2
      Weizmann Street

    Tel
      Aviv,
      64236

    Israel

    Attention:
      Michael A. Heller, Esq.

    Telephone:
      011-972-3-608-9948 

    Facsimile:
      011-972-3-521-2218

    E-mail:
      michael.heller@goldfarb.com

     

    if
      to any
      Stockholder, to the Stockholder c/o the Stockholders’
Representative:

     

    Yoav
      Leibovich

    8th
      Kalisher St. 

    Rehovot
      76302

    Israel

    Telephone:
      011-972-54-7777399

    Facsimile:
      011-972-8-9363534

    E-mail:
      yoav@gilat.com

     

    or
      such
      other address or addresses as any party shall have designated by notice in
      writing to the other parties.

     

    SECTION
      10.03. Waivers.
      Either
      the Stockholders’ Representative, on the one hand, or the Parent, on the other
      hand, may, by written notice to the other, (i) extend the time for the
      performance of any of the obligations or other actions of the other under this
      Agreement, (ii) waive any inaccuracies in the representations or warranties
      of
      the other contained in this Agreement or in any document delivered pursuant
      to
      this Agreement, (iii) waive compliance with any of the conditions or covenants
      of the other contained in this Agreement, or (iv) waive performance of any
      of
      the obligations of the other under this Agreement. Except as provided in the
      preceding sentence, no action taken pursuant to this Agreement, including,
      without limitation, any investigation by or on behalf of any party, shall be
      deemed to constitute a waiver by the party taking such action of compliance
      with
      any representations, warranties, covenants or agreements contained in this
      Agreement. The waiver by any party hereto of a breach of any provision of this
      Agreement shall not operate or be construed as a waiver of any subsequent
      breach.

     

    SECTION
      10.04. Amendments,
      Supplements, Etc.
      At any
      time this Agreement may be amended or supplemented by such additional
      agreements, articles or certificates, as may be determined by the parties hereto
      to be necessary, desirable or expedient to further the purposes of this
      Agreement, or to clarify the intention of the parties hereto, or to add to
      or
      modify the covenants, terms or conditions hereof or to effect or facilitate
      any
      governmental approval or acceptance of this Agreement or to effect or facilitate
      the filing or recording of this Agreement or the consummation of any of the
      transactions contemplated hereby. Any such instrument must be in writing and
      signed by the Parent, the Company and the Stockholders’
Representative.

     

    
      
        
        

      

      
        70

        
          

        

      

      
        
        

      

    

    SECTION
      10.05. Governing
      Law; Submission to Jurisdiction.
      This
      Agreement shall be governed by, and construed and enforced in accordance with,
      the laws of the State of New York other than conflict of laws principles thereof
      directing the application of any law other than that of New York. Courts within
      the State of New York, County of New York or the United States District Court
      for the Southern District of New York will have jurisdiction over all disputes
      between the parties hereto arising out of or relating to this Agreement and
      the
      agreements, instruments and documents contemplated hereby. The parties hereby
      consent to and agree to submit to the jurisdiction of such courts. Each of
      the
      parties hereto waives, and agrees not to assert in any such dispute, to the
      fullest extent permitted by applicable law, any claim that (i) such party
      is not personally subject to the jurisdiction of such courts, (ii) such
      party and such party’s property is immune from any legal process issued by such
      courts or (iii) any litigation commenced in such courts is brought in an
      inconvenient forum.

     

    SECTION
      10.06. Waiver
      of Jury Trial.
      Each
      party hereto hereby irrevocably waives all right to trial by jury in any
      proceeding (whether based on contract, tort or otherwise) arising out of or
      relating to this Agreement or any transaction or agreement contemplated hereby
      or the actions of any party hereto in the negotiation, administration,
      performance or enforcement hereof.

     

    SECTION
      10.07. Headings;
      Interpretation.
      The
      descriptive headings contained in this Agreement are included for convenience
      of
      reference only and shall not affect in any way the meaning or interpretation
      of
      this Agreement. The parties have participated jointly in the negotiation and
      drafting of this Agreement. In the event an ambiguity or question of intent
      or
      interpretation arises, this Agreement shall be construed as if drafted jointly
      by the parties, and no presumption or burden of proof shall arise favoring
      or
      disfavoring any party by virtue of the authorship of any provisions of this
      Agreement.

     

    SECTION
      10.08. Counterparts.
      This
      Agreement may be executed and delivered (including by facsimile transmission)
      in
      one or more counterparts, and by the different parties hereto in separate
      counterparts, each of which when executed and delivered shall be deemed to
      be an
      original but all of which taken together shall constitute one and the same
      agreement.

     

    SECTION
      10.09. Entire
      Agreement.
      This
      Agreement (including the Exhibits and the Company Disclosure Schedule), the
      Transaction Documents and the Confidentiality Agreement constitute the entire
      agreement among the parties with respect to the subject matter hereof and
      supersede all prior agreements and understandings among the parties with respect
      thereto. No addition to or modification of any provision of this Agreement
      shall
      be binding upon any party hereto unless made in writing and signed by all
      parties hereto.

     

    SECTION
      10.10. Binding
      Effect; Benefits.
      This
      Agreement shall inure to the benefit of and be binding upon the parties hereto
      and their respective successors and permitted assigns. Notwithstanding anything
      contained in this Agreement to the contrary, nothing in this Agreement,
      expressed or implied, is intended to confer on any Person other than the parties
      hereto or their respective successors and assigns, any rights, remedies,
      obligations or liabilities under or by reason of this Agreement.

     

    
      
        
        

      

      
        71

        
          

        

      

      
        
        

      

    

    SECTION
      10.11. Assignability.
      Neither
      this Agreement nor any of the parties’ rights hereunder shall be assignable by
      any party hereto without the prior written consent of the other parties hereto,
      except (i) in the case of the Parent, to any Person who shall acquire
      substantially all of the assets of the Parent or a majority of the voting
      securities of the Parent, whether pursuant to a merger, consolidation, sale
      of
      stock or otherwise, and (ii) in the case of an individual Stockholder, in
      accordance with Section 6.03 or to the estate of such Stockholder upon
      death.

     

    SECTION
      10.12. Severability.
      If any
      term or other provision of this Agreement is invalid, illegal, or incapable
      of
      being enforced by any law or public policy, all other terms or provisions of
      this Agreement shall nevertheless remain in full force and effect so long as
      the
      economic or legal substance of the transactions contemplated hereby is not
      affected in any manner materially adverse to any party. Upon such determination
      that any term or other provision is invalid, illegal, or incapable of being
      enforced, the parties hereto shall negotiate in good faith to modify this
      Agreement so as to effect the original intent of the parties as closely as
      possible in an acceptable manner in order that the transactions contemplated
      hereby are consummated as originally contemplated to the greatest extent
      possible.

     

    


     

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    IN
      WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
      parties hereto as of the day and year first above written.

     

    
      	 	
              LIVEPERSON,
                INC.

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Robert LoCascio

            
	 	 	
              Name:
                Robert LoCascio

            
	 	 	
              Title:
                Chairman and Chief Executive Officer

            
	 	 
	 	 
	 	
              KATO
                MERGERCO, INC. 

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Timothy Bixby

            
	 	 	
              Name:
                Timothy Bixby

            
	 	 	
              Title:
                Director

            
	 	 	 
	 	 	 
	 	
              KASAMBA,
                INC. 

            
	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Arthur Fuhrer

            
	 	 	
              Name:
                Arthur Fuhrer

            
	 	 	
              Title:
                President

            
	 	 
	 	 


    

    
      	 	
              STOCKHOLDERS’
                REPRESENTATIVE

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Yoav Leibovich

            
	 	 	
              Name:
                Yoav Leibovich