Exhibit 2.3

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                          AGREEMENT AND PLAN OF MERGER

                                      Among

                               LECROY CORPORATION,

                         COBALT ACQUISITION CORPORATION

                                       and

                     COMPUTER ACCESS TECHNOLOGY CORPORATION

                          Dated as of September 1, 2004

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      AGREEMENT  AND  PLAN OF  MERGER,  dated  as of  September  1,  2004  (this
"Agreement"),  among  LeCroy  Corporation,  a Delaware  corporation  ("Parent"),
Cobalt  Acquisition  Corporation,   a  Delaware  corporation  and  wholly  owned
subsidiary  of Parent  ("Merger  Subsidiary"),  and Computer  Access  Technology
Corporation, a Delaware corporation (the "Company").

      WHEREAS,  the respective Boards of Directors of Parent,  Merger Subsidiary
and the Company have  approved  and declared  advisable  this  Agreement,  which
contemplates the merger of Merger  Subsidiary with and into the Company,  as set
forth below (the "Merger"),  in accordance  with the General  Corporation Law of
the  State of  Delaware  (the  "DGCL")  and upon the terms  and  subject  to the
conditions set forth in this Agreement;

      WHEREAS,  upon the consummation of the Merger, each issued and outstanding
share (each a "Share" and,  collectively,  the "Shares") of the Company's common
stock, par value $0.001 per share (the "Common  Stock"),  will be converted into
the right to receive $6.00 per Share in cash (without  interest) (the "Per Share
Amount") upon the terms and subject to the  limitations  and  conditions of this
Agreement;

      WHEREAS,  the Board of Directors of the Company is  recommending  that the
Company's stockholders approve this Agreement and the Merger;

      WHEREAS, certain stockholders of the Company have entered into Stockholder
Voting Agreements  (each, a "Voting  Agreement" and,  collectively,  the "Voting
Agreements")  with  Parent and Merger  Subsidiary  providing  for,  among  other
things,  the agreement of such  stockholders to vote all Shares owned by them in
favor of the Merger  and this  Agreement,  subject  to the terms and  conditions
stated therein; and

      WHEREAS,  Parent, Merger Subsidiary and the Company desire to make certain
representations, warranties and agreements in connection with the Merger and the
other  transactions  contemplated  by this  Agreement  and to prescribe  various
conditions  to the  Merger  and  the  other  transactions  contemplated  by this
Agreement.

      NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, the receipt and sufficiency of which are hereby
acknowledged,   and  intending  to  be  legally  bound  hereby,  Parent,  Merger
Subsidiary and the Company hereby agree as follows:

                                    ARTICLE I

                                   THE MERGER

      SECTION 1.01. The Merger. Upon the terms and subject to the conditions set
forth herein, and in accordance with the DGCL, at the Effective Time (as defined
below), Merger Subsidiary shall be merged with and into the Company. As a result
of the Merger,

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the separate  corporate  existence  of Merger  Subsidiary  shall cease,  and the
Company  shall  continue  as  the  surviving  corporation  of  the  Merger  (the
"Surviving Corporation").

      SECTION 1.02.  Effective Time;  Closing.  As promptly as practicable after
the  satisfaction  or, if  permissible,  waiver of the  conditions  set forth in
Article VII hereof,  the parties hereto shall cause the Merger to be consummated
by filing a certificate of merger,  substantially in the form attached hereto as
Exhibit 1.02 (the  "Certificate of Merger"),  with the Secretary of State of the
State of Delaware,  in such form as is required  by, and executed in  accordance
with, the relevant  provisions of the DGCL. The term "Effective  Time" means the
date and time of the filing of the  Certificate  of Merger with the Secretary of
State of the State of  Delaware  (or such later time as may be agreed by each of
the parties  hereto and  specified in the  Certificate  of Merger).  Immediately
prior to the filing of the Certificate of Merger,  a closing will be held at the
offices of Fish & Richardson P.C. at 225 Franklin Street,  Boston, MA 02110-2804
(or at such other time and place as the parties may agree).

      SECTION 1.03.  Effect of the Merger.  At the Effective Time, the effect of
the  Merger  shall be as  provided  in the  applicable  provisions  of the DGCL.
Without limiting the generality of the foregoing,  and subject  thereto,  at the
Effective Time, all the property, rights,  privileges,  powers and franchises of
each  of  the  Company  and  Merger  Subsidiary  shall  vest  in  the  Surviving
Corporation,  and all debts, liabilities,  obligations and duties of each of the
Company and Merger Subsidiary shall become the debts,  liabilities,  obligations
and duties of the Surviving Corporation.

      SECTION 1.04. Certificate of Incorporation; By-laws.

      (a) At the Effective Time, the Certificate of Incorporation of the Company
as in effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving  Corporation and shall be amended and restated to
read substantially as set forth on Exhibit 1.04 hereto.

      (b) At the Effective  Time, the By-laws of Merger  Subsidiary as in effect
immediately  prior to the Effective Time,  shall be the By-laws of the Surviving
Corporation  unless and until thereafter  amended as provided by Law (as defined
in Section 3.05(a)  hereof),  the Certificate of  Incorporation of the Surviving
Corporation and/or such By-laws.

      SECTION 1.05.  Directors and Officers.  The directors of Merger Subsidiary
immediately  prior to the Effective  Time shall be the initial  directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation,  and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving  Corporation,  in each case until their respective  successors are
duly elected or appointed and qualified and/or additional persons are selected.

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                                   ARTICLE II

               CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

      SECTION 2.01.  Conversion Of Securities.  At the Effective Time, by virtue
of the Merger and  without any action on the part of Merger  Subsidiary,  Parent
the Company or the holders of any of the following securities:

      (a) Each Share issued and outstanding  immediately  prior to the Effective
Time (other than any Shares to be canceled  pursuant to Section  2.01(b)  hereof
and other than Dissenting  Shares (as defined in Section 2.01(e)  hereof)) shall
be  converted  into the right to receive the Per Share  Amount in cash,  without
interest (the aggregate cash amount paid pursuant to this Section  2.01(a) being
hereinafter referred to as the "Merger Consideration").

      (b) Each share of Common  Stock held in the  treasury  of the  Company and
each Share owned by Parent or any direct or indirect wholly owned  subsidiary of
Parent  or of the  Company  immediately  prior to the  Effective  Time  shall be
canceled and extinguished  without any conversion thereof,  and no payment shall
be made with respect thereto.

      (c) Each share of common stock of Merger Subsidiary issued and outstanding
immediately  prior to the  Effective  Time shall be  converted  into one validly
issued,  fully-paid  and  nonassessable  share of common stock of the  Surviving
Corporation.

      (d) The Shares outstanding  immediately prior to the Effective Time (other
than Shares to be canceled  pursuant to Section  2.01(b) hereof) shall no longer
be outstanding and shall automatically be canceled and shall cease to exist, and
each holder of a Certificate  (as defined in Section 2.02(b) hereof) shall cease
to have any rights with respect thereto,  except the right to receive,  for each
Share  represented  by such  Certificate,  a cash amount  equal to the Per Share
Amount,  without  interest,  or, if such holder is a Dissenting  Stockholder (as
defined in Section 2.01(e) hereof),  the rights, if any, afforded to such holder
under Section 262 of the DGCL.

      (e) Notwithstanding anything in this Agreement to the contrary, any Shares
held by a person who shall  have  properly  demanded  and  perfected  a right to
receive  payment of the fair value of such Shares (a  "Dissenting  Stockholder")
pursuant to Section 262 of the DGCL ("Dissenting Shares") shall not be converted
as described in Section 2.01(a) hereof,  unless such holder fails to comply with
the  provisions  of Section 262 of the DGCL or withdraws or otherwise  loses its
right to receive such fair value  payment.  If, after the Effective  Time,  such
Dissenting Stockholder fails to comply with the provisions of Section 262 of the
DGCL or  withdraws  or  otherwise  loses its right to  receive  such fair  value
payment,  such  Dissenting  Stockholder's  Shares shall no longer be  considered
Dissenting  Shares for the  purposes of this  Agreement  and shall  thereupon be
deemed to have been converted into and become exchangeable for, at the Effective
Time, the right to receive for

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each such Share,  in cash the Per Share Amount,  without  interest.  The Company
shall give Parent (i) prompt written notice of any demands to receive payment of
fair  value of  Shares  received  by the  Company  and (ii) the  opportunity  to
participate in and direct all  negotiations and proceedings with respect to such
demands.  The Company shall not,  without the prior  written  consent of Parent,
make any payment with respect to, settle, offer to settle or otherwise negotiate
any such demands.

      SECTION 2.02. Exchange of Certificates for Cash.

      (a) Exchange  Agent. As of the Effective  Time,  Parent shall deposit,  or
shall  cause to be  deposited,  with The Bank of New York or such  other bank or
trust  company as may be designated by Parent (the  "Exchange  Agent"),  for the
benefit of the holders of Shares,  for exchange in accordance  with this Article
II  through  the  Exchange  Agent,   the  Merger   Consideration   (such  Merger
Consideration,  together with any interest  earned  thereon,  being  hereinafter
referred to as the "Exchange  Fund") payable  pursuant to Section 2.01 hereof in
exchange  for  Shares.  The  Exchange  Agent  shall,   pursuant  to  irrevocable
instructions  given by Parent,  deliver the cash  (excluding any interest earned
thereon) out of the Exchange  Fund.  All  interest  earned on the Exchange  Fund
shall be payable to Parent.  Except as contemplated by this Section 2.02(a), the
Exchange Fund shall not be used for any other purpose.

      (b) Exchange Procedures. Parent shall cause the Exchange Agent to mail, as
promptly as  practicable  after the Effective  Time, to each holder of record of
(A) a certificate or certificates  which immediately prior to the Effective Time
represented Shares (the  "Certificates") or (B) uncertificated  shares of Common
Stock which  immediately  prior to the Effective  Time  represented  Shares (the
"Uncertificated  Shares") (i) a letter of transmittal  (which shall specify that
delivery  shall be  effected,  and risk of loss and title to such  Shares  shall
pass,  only  upon  proper  delivery  of  the  Certificates  or  transfer  of the
Uncertificated Shares to the Exchange Agent and shall be in customary form); and
(ii) instructions for effecting the surrender of the Certificates or transfer of
the Uncertificated  Shares in exchange for the appropriate portion of the Merger
Consideration.  Upon (x) surrender to the Exchange  Agent of a  Certificate  for
cancellation,  together with such letter of transmittal, duly executed, and such
other customary  documents as may be required  pursuant to such  instructions or
(y)  receipt  of an  "agent's  message"  by the  Exchange  Agent (or such  other
customary  evidence,  if any, of transfer the Exchange Agent may request) in the
case of a  book-entry  transfer  of  Uncertificated  Shares,  the holder of such
Certificate  or such  Uncertificated  Shares  shall be  entitled  to  receive in
exchange  therefor the amount in cash which such holder has the right to receive
pursuant to Section  2.01(a) hereof (after giving effect to any required Tax (as
defined in Section 9.03 hereof)  withholdings) in respect of the Shares formerly
represented by such Certificate or Uncertificated Shares, and the Certificate or
Uncertificated Shares so surrendered or transferred shall forthwith be canceled.
Parent shall use commercially  reasonable efforts to negotiate an agreement with
the Exchange  Agent which  provides that upon the holder of such  Certificate or
such Uncertificated  Shares becoming entitled to receive the payment referred to
in the previous sentence of this Section 2.02(b),  the Exchange Agent shall make
such payment to such holder within ten (10)

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business days thereafter.  No interest will be paid or will accrue on the amount
payable upon the surrender of any Certificate or transfer of any  Uncertificated
Shares.  In the  event  of a  transfer  of  ownership  of  Shares  which  is not
registered in the transfer records of the Company, the proper amount of cash may
be paid to a transferee if the Certificate representing such Shares is presented
to the Exchange  Agent,  accompanied  by all documents  required to evidence and
effect such transfer and by evidence that any  applicable  stock  transfer taxes
have been paid. Until surrendered or transferred as contemplated by this Section
2.02, each Certificate or Uncertificated Share shall be deemed at any time after
the Effective Time to represent only the right to receive,  upon such surrender,
the  appropriate  portion of the  Merger  Consideration  in respect of  Share(s)
formerly represented thereby.

      (c) No Further  Rights in Common Stock.  All cash paid upon  conversion of
the Shares in accordance with the terms hereof shall be deemed to have been paid
in full satisfaction of all rights pertaining to such Shares.

      (d)  Termination  of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the holders of Shares outstanding  immediately prior to
the Effective  Time for one (1) year after the Effective Time shall be delivered
to Parent,  upon demand, and any holders of such Shares who have not theretofore
complied with this Article II shall  thereafter  look only to Parent for payment
of any cash to  which  they are  entitled.  Any  portion  of the  Exchange  Fund
remaining  unclaimed by such holders as of a date that is  immediately  prior to
such date as such amounts would  otherwise  escheat to or become the property of
any  Governmental  Authority (as defined in Section 9.03 hereof)  shall,  to the
extent  permitted by  applicable  Law,  become the property of Parent,  free and
clear of any claims or interest of any person previously entitled thereto.

      (e)  No  Liability.   Neither  Parent,   the  Company  nor  the  Surviving
Corporation  shall be liable to any holder of Shares for any cash delivered to a
Governmental  Authority pursuant to any abandoned  property,  escheat or similar
Law.

      (f) Lost, Stolen or Destroyed  Certificates.  In the event any Certificate
shall have been lost,  stolen or  destroyed,  upon the making of an affidavit of
that  fact by the  person  claiming  such  Certificate  to be  lost,  stolen  or
destroyed, and, if required by Parent or the Exchange Agent, the posting by such
person of a bond, in such reasonable  amount as Parent or the Exchange Agent may
direct as  indemnity  against any claim that may be made against it with respect
to such Certificate,  the Exchange Agent will deliver in exchange for such lost,
stolen  or  destroyed   Certificate  the  appropriate   portion  of  the  Merger
Consideration in respect thereof pursuant to this Article II.

      SECTION 2.03.  Stock  Transfer  Books.  At the Effective  Time,  the stock
transfer  books of the  Company  shall be closed  and there  shall be no further
registration of transfers of Shares  thereafter on the records of the Company or
the Surviving  Corporation.  From and after the Effective  Time,  the holders of
Certificates  shall  cease  to  have  any  rights  with  respect  to the  Shares
represented  thereby except as otherwise  provided herein or by Law. On or after
the Effective  Time,  any  Certificates  duly presented to the Exchange Agent or
Parent

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for any reason shall be  converted  into the amount of cash to which the holders
thereof are entitled pursuant to this Article II.

      SECTION 2.04. Stock Options; ESPP.

      (a) Disposition of Options.  All options to purchase  Company Common Stock
issued under the Company's 2000 Stock  Option/Stock  Issuance Plan, Special 2000
Stock Option Plan and 2000 Stock Incentive Plan  (collectively,  the "2000 Stock
Option Plans"), or under the Company's 1994 Stock Option Plan (together with the
2000 Stock Option  Plans,  the "Company  Stock  Option  Plans"),  whether or not
exercisable, whether or not vested, and whether or not performance-based,  which
are  outstanding  at the  Effective  Time  (each a "Company  Option"),  shall be
cancelled in the Merger,  or assumed by Parent in  accordance  with this Section
2.04,  subject to and in accordance  with the terms of such Company Stock Option
Plans.

      (b) Vested  2000 Option  Shares.  Each  Company  Option  issued  under the
Director  Automatic  Stock Option Grant Program  within the Company's 2000 Stock
Incentive Plan and  outstanding as of the effective Time shall be cancelled with
respect  to all of the  remaining  shares  subject  to such  Company  Options in
consideration of payment to the holder thereof of an amount equal to the excess,
if any, of the Per Share Amount over the exercise price otherwise payable by the
holder to acquire each  remaining  share of Company Common Stock subject to such
Company Options. Each other Company Option issued under the Company's 2000 Stock
Option Plans, and outstanding as of the Effective Time, to the extent vested and
exercisable immediately prior to the Effective Time for shares of Company Common
Stock  (together with the Company Options  described in the preceding  sentence,
the "Vested 2000 Option  Shares"),  shall, to the extent of each remaining share
of Company  Common  Stock  subject to such  Company  Options,  be  cancelled  in
consideration of payment to the holder thereof of an amount equal to the excess,
if any, of the Per Share Amount over the exercise price otherwise payable by the
holder to acquire such share;  provided,  that for purposes of this sentence any
accelerated  vesting or  exercisability  which will or might  otherwise arise by
reason of the  Merger  shall not be taken into  account.  For the  avoidance  of
doubt,  except for the Company Options described in the initial sentence of this
Section 2.04(b), Company Options issued and outstanding under the Company's 2000
Stock Options Plans which would become vested and  exercisable  by reason of the
transactions  contemplated by this Agreement if not assumed by Parent, are to be
assumed by Parent  pursuant to subsection  2.04(d) below and therefore  will not
become vested and exercisable  immediately prior to the Effective Time by reason
of the transaction contemplated by this Agreement. Vested 2000 Option Shares for
which the exercise price is greater than the Per Share Amount shall be cancelled
as of the Effective Time without payment of any  consideration  whatsoever.  All
payments  under this Section  2.04(b)  shall be made as promptly as  practicable
after the Effective Time.

      (c) Vested  1994 Option  Shares.  Each  Company  Option  issued  under the
Company's 1994 Stock Option Plan and  outstanding  as of the Effective  Time, to
the extent vested and  exercisable  immediately  prior to the Effective Time for
shares of Company  Common Stock (the "Vested 1994 Option  Shares"),  may, if the
holder so consents, to the

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extent of each such Vested 1994 Option Share, be cancelled in  consideration  of
payment to the holder  thereof of an amount equal to the excess,  if any, of the
Per Share  Amount over the  exercise  price  otherwise  payable by the holder to
acquire each such Vested 1994 Option Share; provided,  that for purposes of this
sentence any accelerated vesting or exercisability which will or might otherwise
arise by reason of the Merger shall not be taken into account. For the avoidance
of doubt,  Company Options issued and outstanding under the Company's 1994 Stock
Option  Plan  which  would  become  vested  and  exercisable  by  reason  of the
transactions  contemplated by this Agreement if not assumed by Parent, are to be
assumed by Parent  pursuant to subsection  2.04(d) below and therefore  will not
become vested and exercisable  immediately prior to the Effective Time by reason
of the  transactions  contemplated  by this  Agreement.  All payments under this
Section  2.04(c)  shall be made as promptly as  practicable  after the Effective
Time.

      (d) Other Option  Shares.  Each Company Option issued under the 2000 Stock
Option Plans and  outstanding  as of the  Effective  Time to the extent that any
shares of Company  Common Stock  subject to such  Company  Option are not Vested
2000 Option  Shares,  and each Company  Option issued and  outstanding as of the
Effective  Time under the  Company's  1994 Stock  Option  Plan to the extent not
otherwise  cancelled in consideration of payment pursuant to paragraph (c) above
(together  with  unvested  Company  Options  issued  under the 2000 Stock Option
Plans,  the  "Other  Option  Shares"),  shall  be  assumed  by  Parent  with the
adjustments  described herein, each such assumed option referred to herein as an
"Assumed Option", subject to the following terms and conditions:

            (i) the number of shares of common  stock of the  Parent,  $0.01 par
      value per share  ("Parent  Common  Stock")  which shall be subject to such
      Assumed  Option shall be (A) the number of Other  Option  Shares under the
      applicable Company Option, multiplied by (B) the quotient (the "Conversion
      Ratio")  obtained by dividing the Per Share Amount by the average  closing
      price of Parent  Common  Stock on the last five (5)  trading  days  ending
      immediately  prior to the Effective  Time, with any fraction of a share of
      Parent Common Stock rounded down to the nearest whole share;

            (ii) the exercise  price,  per share,  at the Effective  Time of the
      Assumed  Option shall be equal to (A) the per share  exercise price of the
      Company Option immediately prior to the Effective Time, divided by (B) the
      Conversion  Ratio,  with any  fraction of a cent rounded up to the nearest
      whole cent; and

            (iii) except as required to reflect the adjustments made pursuant to
      (i) and (ii) above,  the Assumed  Option shall  otherwise  retain the same
      terms (i.e., with respect to vesting schedule and acceleration provisions)
      as the original Company Option.

At the Effective Time the Company Stock Option Plans shall be assumed by Parent.
The number of shares of Parent Common Stock  available  for issuance  under each
Company Stock Option Plan shall be the number of shares of Company  Common Stock
that remain

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available  for  issuance  under  the   applicable   Company  Stock  Option  Plan
immediately  prior to the Effective Time multiplied by the Conversion Ratio. All
Company Common Stock numbers that appear in the Company Stock Option Plans shall
be multiplied by the  Conversion  Ratio.  Following the  assumption of the Other
Option Shares and the Company Stock Option Plans,  all references to the Company
in the Company  Options and the Company  Stock  Option  Plans shall be deemed to
refer to the Parent.

      (e) Assumed  Options.  As soon as  practicable  after the Effective  Time,
Parent will issue to each person who,  immediately  prior to the Effective  Time
was a holder of a Company Option covering Other Option Shares a written document
evidencing the foregoing Assumed Option.  Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of Parent Common
Stock for delivery  upon exercise of Assumed  Options  pursuant to the terms set
forth in this Section 2.04.

      (f) Tax  Treatment  of  Replacement  Options.  It is the  intention of the
parties that,  insofar as consistent with the foregoing  conversion  procedures,
the Assumed  Options shall  continue to qualify  following the Effective Time as
incentive  stock options as defined in Section 422 of the Internal  Revenue Code
of 1986, as amended (the "Code"),  to the extent the Company Option was intended
to so qualify prior to the assumption of the Company Option.

      (g) Form S-8. Parent agrees to use commercially reasonable efforts to file
with the Securities  and Exchange  Commission  (the "SEC"),  within fifteen (15)
business days after the Effective Time, a registration  statement on Form S-8 or
other  appropriate  form under the Securities Act of 1933, as amended  (together
with the rules and regulations  thereunder,  the "Securities  Act"), to register
Parent Common Shares issuable upon exercise of the Parent  Exchange  Options and
to use its commercially  reasonable efforts to cause such registration statement
to remain  effective  until the exercise or  expiration  of the Parent  Exchange
Options.

      (h)  Section  16 of the  Securities  Exchange  Act of  1934.  Prior to the
Effective  Time,  the  boards of  directors  of Parent  and the  Company,  or an
appropriate  committee of non-employee  directors thereof,  shall each comply as
applicable  with the  provisions of the SEC's No Action Letter dated January 12,
1999 addressed to Skadden,  Arps,  Slate,  Meagher and Flom LLP relating to Rule
16b-3  of the  Securities  Exchange  Act of 1934 so that  any  disposition  of a
Company  Option or assumption of Other Option Shares  pursuant to this Agreement
shall be an exempt  transaction  for  purposes  of Section 16 of the  Securities
Exchange  Act of 1934 by any officer or director of the Company who may become a
covered person for purposes of Section 16.

      (i) ESPP.  The Company  shall take all actions  necessary  pursuant to the
terms of the Company's 2000 Employee  Stock  Purchase Plan (the "Employee  Stock
Purchase  Plan") in order to (i) preclude the  commencement  of any new offering
period or purchase  interval  subsequent to the date of this  Agreement and (ii)
shorten  the  offering  periods  and  purchase  intervals  under such plan which
includes the Effective Time (the "Current Offerings"), such

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that the Current  Offerings shall terminate  immediately  prior to the Effective
Time. Any purchase rights existing immediately prior to the Effective Time under
the  Employee  Stock  Purchase  Plan to acquire a share of Company  Common Stock
shall be  cancelled  in  consideration  of payment  to the holder  thereof of an
amount  equal to the excess,  if any, of the Per Share  Amount over the purchase
price otherwise payable by the holder to acquire such share.

      (j) Optionee  Acknowledgement  and Acceptance.  No payment in respect of a
Company  Option  issued  under the  Company's  2000  Stock  Option  Plans or the
Company's  1994 Stock Option Plan,  no payment in respect of any purchase  right
under the Employee  Stock  Purchase  Plan, and no assumption of a Company Option
issued  under the  Company's  2000 Stock Option Plans in respect of Other Option
Shares,  otherwise  required by this Section 2.04 shall be required  pursuant to
this Section 2.04 until the holder thereof shall have signed and returned to the
Parent an  acknowledgement  and  acceptance,  in such form as Parent  shall have
requested,  acceding to the foregoing  treatment of the holder's Company Options
so issued and purchase rights in their entirety.  Until, if ever, that condition
shall  have been  satisfied,  as of the  Effective  Time each  holder's  Company
Options issued under the Company's  2000 Stock Option Plans and purchase  rights
under the Employee  Stock Purchase  Plan, if any,  shall  constitute  solely the
right to receive payments and Assumed Options, as applicable, in accordance with
this Section 2.04, upon  satisfaction  of that condition.  The Company shall use
commercially  reasonable efforts to procure such executed  acknowledgements  and
acceptances  from each holder of Company  Options so issued and purchase  rights
under the Employee Stock Purchase Plan prior to the Effective Time.

      SECTION  2.05.  Withholding  Rights.  Each of the  Surviving  Corporation,
Parent and the Exchange  Agent shall be entitled to deduct and withhold from the
cash consideration otherwise payable pursuant to this Agreement to any holder of
Shares or Company  Options such amounts as it is required to deduct and withhold
with respect to the making of such payment  under the Code,  or any provision of
state,  local or  foreign  Tax Law,  including  any  amounts  required  to be so
deducted and withheld in respect of the exercise of Company Options prior to the
Effective  Time.  To the extent that  amounts  are so  withheld,  such  withheld
amounts shall be treated for all purposes of this  Agreement as having been paid
to the holder of such Shares in respect of which such deduction and  withholding
were made.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      Except as  disclosed  in a document of even date  herewith and attached to
this Agreement and delivered by the Company to Parent upon the execution of this
Agreement and referring by section number to the  representations and warranties
in this  Agreement  (the  "Company  Disclosure  Schedule"),  the Company  hereby
represents and warrants to Parent and Merger Subsidiary that:

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      SECTION 3.01.  Organization and Qualification;  Subsidiaries.  The Company
and each  subsidiary  of the  Company (a  "Subsidiary")  is a  corporation  duly
organized,  validly  existing  and  in  good  standing  under  the  Laws  of the
jurisdiction of its  incorporation  and has the requisite power and authority to
own,  lease and operate its properties and to carry on its business as it is now
being  conducted.  The Company and each Subsidiary is duly qualified or licensed
as a  foreign  corporation  to do  business,  and is in good  standing,  in each
jurisdiction where the character of the properties owned,  leased or operated by
it or  the  nature  of  its  business  makes  such  qualification  or  licensing
necessary,  except for any  failure(s) to be so qualified or licensed or in good
standing  that  would  not,  individually  or in the  aggregate,  have a Company
Material  Adverse Effect (as hereinafter  defined).  The term "Company  Material
Adverse Effect" means any change or effect that is or is reasonably likely to be
materially  adverse  to  the  business,   results  of  operations  or  condition
(financial or otherwise) of the Company and the Subsidiaries,  taken as a whole,
or  otherwise  materially  and  adversely  affects the ability of the Company to
consummate the transactions  contemplated hereby; provided,  however, that, none
of the following shall be deemed in themselves,  either alone or in combination,
to  constitute,  and  none of the  following  shall  be taken  into  account  in
determining  whether  there  has  been or will be, a  Company  Material  Adverse
Effect:  (a) any change in the market price or trading  volume of the  Company's
stock after the date hereof; (b) any adverse change, effect, event,  occurrence,
state of facts or development to the extent  attributable to the announcement or
pendency  of the Merger  (including  any  cancellation  of or delays in customer
orders, any reduction in sales, any disruption in supplier, distributor, partner
or similar  relationships  or any loss of  employees);  (c) any adverse  change,
effect,  event,  occurrence,  state  of  facts or  development  attributable  to
conditions   affecting   the   industries  as  a  whole  in  which  the  Company
participates, the U.S. economy as a whole or the foreign economies as a whole in
any  locations  where  the  Company  or  any of its  Subsidiaries  has  material
operations or sales; (d) any adverse change, effect, event, occurrence, state of
facts or development  arising from or relating to compliance  with the terms of,
or the taking of any action required by, this Agreement; or (e) any suit, claim,
action or other proceeding brought by any shareholder, Governmental Authority or
third-party  competitor  of the Company or Parent after the date hereof that (x)
is brought or threatened  against the Company or any of its  Subsidiaries or any
member  of  its  Board  of  Directors  in  respect  of  this  Agreement  or  the
transactions  contemplated hereby or (y) in the case of a third-party competitor
is brought or threatened  against the Company or any of its  Subsidiaries or any
member of its Board of Directors and is  reasonably  likely to have been brought
with the  intended  purpose  or  effect  of  preventing,  enjoining,  materially
altering or delaying or otherwise interfering with the transactions contemplated
by this Agreement.  A true and complete list of all the  Subsidiaries,  together
with the  jurisdiction of incorporation of each Subsidiary and the percentage of
the outstanding  capital stock of each Subsidiary  owned by the Company and each
other  Subsidiary,  is set forth on Schedule  3.01-1 of the  Company  Disclosure
Schedule.  A true and complete list of all the  Subsidiaries,  together with the
jurisdiction  of  incorporation  of each  Subsidiary  and the  percentage of the
outstanding capital stock of each Subsidiary owned by the Company and each other
Subsidiary,  is set forth on Schedule 3.01-1 of the Company Disclosure Schedule.
Except as set forth on Schedule 3.01-1 of the Company Disclosure  Schedule,  the
Company does not directly or indirectly  own any equity or similar  interest in,
or any interest convertible into or

                                       10
<PAGE>

exchangeable  or  exercisable  for,  any  equity or  similar  interest  in,  any
corporation,  partnership, joint venture or other business association or entity
and is not subject to any obligation or requirement to provide funds or make any
investment  (in the form of a loan,  capital  contribution  or otherwise) in any
such entity or any other person.

      SECTION 3.02.  Certificate of Incorporation  and By-laws.  The Company has
heretofore furnished to Parent a complete and correct copy of the Certificate of
Incorporation and the By-laws or equivalent  organizational  documents,  each as
amended  to  date,  of  the  Company  and  each  Subsidiary  (collectively,  the
"Organizational  Documents"). The Organizational Documents are in full force and
effect.  Neither the Company nor any Subsidiary is in violation of any provision
of its Organizational Documents.

      SECTION 3.03. Capitalization.  The authorized capital stock of the Company
consists solely of 100,000,000  shares of Common Stock and 25,000,000  shares of
preferred  stock. As of the close of business on August 30, 2004, (a) 19,650,329
Shares were issued and outstanding,  all of which were duly authorized,  validly
issued,  fully paid and nonassessable and none of which were issued in violation
of any  preemptive or similar  rights,  (b) 432,727  shares of Common Stock were
held in the treasury of the Company,  (c) no shares of Common Stock were held by
any of the Subsidiaries,  (d) no shares of preferred stock were outstanding, (e)
3,850,776  shares of Common Stock were reserved for future issuance  pursuant to
stock options granted and outstanding pursuant to the Company Stock Option Plans
and (f)  400,498  shares of Common  Stock  were  reserved  for  future  issuance
pursuant to the Employee  Stock Purchase Plan (the Employee Stock Purchase Plan,
together  with the Company  Stock Option Plans,  being  referred to  hereinafter
collectively as the "Stock Incentive Plans"). Since August 30, 2004, the Company
has not issued any shares of its capital stock,  other than any shares of Common
Stock issued upon the valid exercise of Company  Options in accordance  with the
terms thereof, or granted any stock options. Set forth on Schedule 3.03-1 of the
Company Disclosure Schedule is a complete and accurate  description of the grant
date, vesting schedule, number of shares of Common Stock available under, strike
or  exercise  price and holder of each  outstanding  grant of options to acquire
shares of Common  Stock  pursuant  to the  Company  Stock  Option  Plans and the
Company Stock Option Plan and related program,  if applicable,  under which such
options were granted. Each outstanding grant of options under any of the Company
Stock Option Plans is  evidenced  by a Stock Option  Agreement.  Parent has been
furnished  with a true and complete copy of each form of Stock Option  Agreement
evidencing an outstanding option grant. No outstanding grant of options has been
made which varies from such forms.  Each  election to purchase  shares of Common
Stock under the Employee Stock Purchase Plan is evidenced by an enrollment  form
as prescribed by the plan  administrator  of the Employee  Stock  Purchase Plan.
Except for the  options and rights to purchase  shares of Common  Stock  granted
under the Stock  Incentive Plans as expressly set forth in this Section 3.03 and
except as set forth on Schedule 3.03-2 of the Company Disclosure Schedule, there
are no outstanding options, warrants or other rights,  agreements,  arrangements
or commitments of any character relating to the issued or unissued capital stock
of the Company or any Subsidiary (provided that such representation with respect
to the issued  capital stock of the Company or any  Subsidiary  shall be made to
the Company's knowledge where neither the

                                       11
<PAGE>

Company nor any  Subsidiary  is party to such  option,  warrant or other  right,
agreement,   arrangement  or  commitment)  or  obligating  the  Company  or  any
Subsidiary  to issue or sell any  shares of  capital  stock of, or other  equity
interests in, the Company or any Subsidiary.  All shares of Common Stock subject
to issuance as aforesaid, upon issuance on the terms and conditions specified in
the  agreements  pursuant to which they are issuable,  will be duly  authorized,
validly issued,  fully paid and  nonassessable.  Except as set forth on Schedule
3.03-3 of the Company  Disclosure  Schedule,  there are no  contractual or other
obligations of the Company or any Subsidiary to  repurchase,  redeem,  otherwise
acquire or pay any amounts in  connection  with any Shares or any capital  stock
of, or any other equity interests in, any Subsidiary.  Each outstanding share of
capital stock of each Subsidiary is duly authorized,  validly issued, fully paid
and  nonassessable  and,  except as set forth on Schedule  3.03-4 of the Company
Disclosure  Schedule,  each such share owned by the Company or any Subsidiary is
free and clear of all security interests,  liens, claims, pledges,  options, tag
along rights, rights of first refusal, agreements,  limitations on the Company's
or such other Subsidiary's voting rights,  charges and other encumbrances of any
nature whatsoever.

      SECTION 3.04.  Authority  Relative to this Agreement.  The Company has all
necessary  corporate  power and authority to execute and deliver this Agreement,
to perform its obligations  hereunder and to consummate the Merger and the other
transactions  contemplated  hereby except that  consummation of the Merger shall
require the requisite  approval of the Company's  stockholders  as  contemplated
herein.  The  execution  and  delivery of this  Agreement by the Company and the
consummation   by  the  Company  of  the  Merger  and  the  other   transactions
contemplated  hereby  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 to  consummate  the Merger (other
than, with respect to the Merger, the approval and adoption of this Agreement by
the  holders of a  majority  of the then  outstanding  Shares and the filing and
recordation  of  appropriate  merger  documents as required by the DGCL) and the
other transactions contemplated hereby. This Agreement has been duly and validly
executed  and  delivered by the Company  and,  assuming  the due  authorization,
execution  and delivery by Parent and Merger  Subsidiary,  constitutes  a legal,
valid and binding obligation of the Company,  enforceable against the Company in
accordance with its terms,  except as may be limited by bankruptcy,  insolvency,
reorganization,  moratorium  and other  similar  laws and  equitable  principles
relating to or limiting creditors' rights generally and by general principles of
equity.

      SECTION 3.05. No Conflict; Required Filings and Consents.

      (a) The  execution  and delivery of this  Agreement by the Company do not,
and the performance of this Agreement by the Company will not, (i) conflict with
or violate the Organizational  Documents of the Company or any Subsidiary;  (ii)
conflict  with or violate in any material  respect any United  States  (federal,
state or local) or foreign law,  statute,  rule,  regulation,  order,  judgment,
writ, injunction or decree  (collectively,  "Laws") applicable to the Company or
any Subsidiary or by which any material  property or asset of the Company

                                       12
<PAGE>

or any Subsidiary is bound or affected; or (iii) except as set forth on Schedule
3.05(a) of the Company Disclosure  Schedule,  require a consent under,  violate,
conflict  with,  result in any breach of or  constitute  a default  (or an event
which with  notice or lapse of time or both would  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 property or
asset of the Company or any  Subsidiary  pursuant  to, any  material  promissory
note, bond, mortgage,  indenture,  contract,  agreement, lease, license, permit,
franchise  or other  instrument  or  obligation  to  which  the  Company  or any
Subsidiary is a party or by which the Company or any  Subsidiary or any property
or asset of the Company or any Subsidiary is otherwise bound or affected.

      (b) The  execution  and delivery of this  Agreement by the Company do not,
and the  performance of this Agreement,  the  consummation of the Merger and the
other  transactions  contemplated  hereby and compliance  with the provisions of
this  Agreement  by  the  Company  will  not,  require  any  consent,  approval,
authorization  or permit of, or filing with or notification to, any Governmental
Authority,  except:  (i)  registrations  or other actions  required under United
States federal and state  securities laws as are contemplated by this Agreement;
(ii) actions  required by the  Hart-Scott-Rodino  Antitrust  Improvements Act of
1976,  as amended,  and the rules and  regulations  thereunder  (the "HSR Act");
(iii) the filing and recordation of appropriate  merger documents as required by
the DGCL;  (iv) as set  forth on  Schedule  3.05(b)  of the  Company  Disclosure
Schedule;   and  (v)  where   failure  to  obtain  such   consents,   approvals,
authorizations or permits,  or to make such filings or notifications,  would not
prevent or materially delay  consummation of the Merger or any other transaction
contemplated  hereby,  or,  individually  or in the  aggregate,  have a  Company
Material Adverse Effect.

      SECTION  3.06.  Permits;  Compliance  with  Law.  Except  as set  forth on
Schedule  3.06-1  of the  Company  Disclosure  Schedule,  the  Company  and each
Subsidiary is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and
orders  necessary for the Company and each  Subsidiary to own, lease and operate
its  properties  or to carry on its business as it is now being  conducted  (the
"Company  Permits"),  and no  suspension or  cancellation  of any of the Company
Permits is pending or, to the knowledge of the Company, threatened, except where
the failure to have, or the  suspension or  cancellation  of, any of the Company
Permits would not,  individually  or in the aggregate,  have a Company  Material
Adverse Effect. Set forth on Schedule 3.06-2 of the Company Disclosure  Schedule
is a list of  those  Company  Permits,  the loss or  suspension  of any of which
would, individually or in the aggregate, have a Company Material Adverse Effect.
Neither  the  Company nor any  Subsidiary  is in conflict  with or in default or
violation of, and at all times since  January 1, 2000,  has not been in conflict
with or in default or violation  of, (i) any Laws  applicable  to the Company or
any  Subsidiary  or by  which  any  property  or  asset  of the  Company  or any
Subsidiary is bound or affected;  (ii) any of the Company Permits;  or (iii) any
promissory note, bond, mortgage, indenture, contract, agreement, lease, license,
permit,  franchise or other instrument or obligation to which the Company or any
Subsidiary is a party or by which the Company or any  Subsidiary or any property
or asset of the

                                       13
<PAGE>

Company or any Subsidiary is bound or affected,  except for any such  conflicts,
defaults or violations that would not, individually or in the aggregate,  have a
Company  Material  Adverse Effect.  Except as set forth on Schedule  3.06-3,  no
material  investigation or review by any Governmental  Authority with respect to
the Company or any  Subsidiary  is pending,  or to the knowledge of the Company,
threatened, nor has any Governmental Authority indicated in writing an intention
to conduct such an investigation or review.

      SECTION 3.07. SEC Filings; Financial Statements.

      (a) The  Company  has  timely  filed  with  the SEC  all  forms,  reports,
schedules,  statements  and  other  documents  required  to be filed by it since
November  13,  2000 (as  supplemented  and  amended  since  the time of  filing,
collectively, the "Company SEC Documents"). The Company SEC Documents, including
any financial statements or schedules included in the Company SEC Documents,  at
the  time  filed  (and,  in  the  case  of  registration  statements  and  proxy
statements,   on  the  dates  of   effectiveness   and  the  dates  of  mailing,
respectively, and, in the case of any Company SEC Document amended or superseded
by a  filing  prior  to the  date of this  Agreement,  then on the  date of such
amending or superseding  filing) (i) complied in all material  respects with the
applicable  requirements of the United States federal  securities Laws; and (ii)
did not  contain  any untrue  statement  of a  material  fact or omit to state a
material  fact  required to be stated  therein or necessary in order to make the
statements  made therein,  in light of the  circumstances  under which they were
made,  not  misleading.  No  Subsidiary  is  subject to the  periodic  reporting
requirements of the Securities  Exchange Act of 1934, as amended  (together with
the rules and regulations  thereunder,  the "Exchange Act"), or required to file
any form, report, schedule, statement or other document with the SEC, the Nasdaq
National Market, any stock exchange or, except as set forth on Schedule 3.07(a),
any other comparable Governmental Authority.

      (b) Each of the  consolidated  financial  statements  (including,  in each
case,  any notes  thereto)  contained  in the Company SEC  Documents at the time
filed (and, in the case of registration statements and proxy statements,  on the
dates of effectiveness and the dates of mailing, respectively,  and, in the case
of any Company SEC Document  amended or superseded by a filing prior to the date
of this Agreement,  then on the date of such amending or superseding filing) (i)
complied in all material  respects with applicable  accounting  requirements and
with the published rules and regulations of the SEC with respect  thereto,  (ii)
was prepared in accordance  with United  States  generally  accepted  accounting
principles  applied on a  consistent  basis  throughout  the  periods  indicated
(except as may be indicated in the notes thereto), and (iii) fairly presented in
all material respects (subject, in the case of unaudited  statements,  to normal
and recurring year-end adjustments) the consolidated financial position, results
of operations and cash flows of the Company and the consolidated Subsidiaries as
at the  respective  dates  thereof  and for  the  respective  periods  indicated
therein.

      (c) With  respect to each  Annual  Report on Form 10-K and each  Quarterly
Report on Form 10-Q (in each case as supplemented  and amended since the time of
filing as set forth on Schedule  3.07(c))  included in the Company SEC Documents
filed since  August 29,

                                       14
<PAGE>

2002, the financial statements and other financial  information included in such
reports fairly present (within the meaning of the Sarbanes-Oxley Act of 2002) in
all material  respects the financial  condition and results of operations of the
Company as of, and for, the periods presented in the Company SEC Documents.  The
Company's  principal  executive officer and its principal financial officer have
disclosed,  based on their most recent evaluation, to the Company's auditors and
the audit  committee of the  Company's  Board of Directors  (i) all  significant
deficiencies  in the  design  or  operation  of  internal  controls  that  could
adversely affect the Company's ability to record, process,  summarize and report
financial  data and have  identified  for the  Company's  auditors  any material
weaknesses  in internal  controls and (ii) any fraud,  whether or not  material,
that involves  management or other employees who have a significant  role in the
Company's  internal   controls.   The  Company  has  established  and  maintains
disclosure controls and procedures (as such term is defined in Rule 13a-14 under
the Exchange  Act);  such  disclosure  controls and  procedures  are designed to
ensure  that  material  information  relating  to  the  Company,  including  its
consolidated  Subsidiaries,  is made known to the Company's  principal executive
officer and its principal  financial  officer by others  within those  entities,
particularly during the periods in which the periodic reports required under the
Exchange Act are being  prepared;  and, to the  knowledge  of the Company,  such
disclosure  controls and procedures  are effective at the  reasonable  assurance
level in timely  alerting  the  Company's  principal  executive  officer and its
principal financial officer to material  information  required to be included in
the Company's  periodic  reports  required  under the Exchange Act. There are no
outstanding  loans  made  by the  Company  or any  of  its  Subsidiaries  to any
executive  officer (as defined in Rule 3b-7 under the Exchange  Act) or director
of the Company.  Since the enactment of the  Sarbanes-Oxley Act of 2002, neither
the  Company  nor any of its  Subsidiaries  has made any loans to any  executive
officer or director of the Company or any of its Subsidiaries.

      (d)  Except as and to the  extent  set forth on the  consolidated  balance
sheet of the Company and the consolidated  Subsidiaries as at December 31, 2003,
including the notes thereto, included in the Company SEC Documents (the "Company
2003 Balance  Sheet"),  neither the Company nor any Subsidiary has any liability
or obligation of any nature (whether accrued, absolute, contingent or otherwise)
that would be required to be disclosed on a balance sheet prepared in accordance
with  United  States  generally  accepted  accounting  principles,   except  for
liabilities and obligations (i) incurred since December 31, 2003 in the ordinary
course of business  consistent with past practice which would not,  individually
or in the aggregate,  have a Company Material Adverse Effect;  or (iii) incurred
pursuant to this Agreement.

      (e) The Company has  heretofore  furnished to Parent  complete and correct
copies of all material  amendments and modifications that have not been filed by
the Company with the SEC to all agreements, documents and other instruments that
previously had been filed by the Company with the SEC as exhibits to Company SEC
Documents  and  are  currently  in  effect.  A true  and  complete  list of such
amendments  and  modifications  is set forth on Schedule  3.07(e) of the Company
Disclosure Schedule.

                                       15
<PAGE>

      SECTION  3.08.  Disclosure  Documents.  The  preliminary  proxy  statement
relating to the meeting of the Company's  stockholders  in  connection  with the
Merger  (together  with any  amendments  thereof  or  supplements  thereto,  the
"Company Proxy Statement") will not, when filed with the SEC, at the date mailed
to the Company's stockholders and at the time of such meeting of stockholders to
be held in  connection  with the  Merger,  contain  any  untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or  necessary  in  order  to  make  the  statements  therein,  in  light  of the
circumstances  under which they are made, not misleading or necessary to correct
any statement in any earlier  communication  with respect to any solicitation of
proxies or otherwise. The Company Proxy Statement will, when filed with the SEC,
at the date mailed to the Company's stockholders and at the time of such meeting
of stockholders to be held in connection with the Merger, comply in all material
respects  with  the  applicable   requirements  of  the  United  States  federal
securities   Laws.   Notwithstanding   the  foregoing,   the  Company  makes  no
representation or warranty with respect to any information supplied by Parent or
Merger  Subsidiary  or  any  of  their  respective  representatives  in  writing
specifically for inclusion in the Company Proxy Statement.

      SECTION 3.09.  Absence of Certain  Changes or Events.  Since  December 31,
2003,  except as contemplated by this Agreement or as set forth on Schedule 3.09
of the  Company  Disclosure  Schedule,  the Company  and the  Subsidiaries  have
conducted  their  businesses in the ordinary  course and in a manner  consistent
with past  practice,  and  there  has not been (a) any event or events  having a
Company Material Adverse Effect, (b) any change by the Company in its accounting
methods,  principles or  practices,  (c) any  revaluation  by the Company of any
material asset (including,  without limitation, any writing down of the value of
inventory  or writing  off of notes or accounts  receivable),  other than in the
ordinary course of business consistent with past practice,  (d) any entry by the
Company or any Subsidiary  into any  commitment or  transaction  material to the
Company and the Subsidiaries taken as a whole,  except in the ordinary course of
business and consistent with past practice,  (e) any declaration,  setting aside
or payment of any dividend or  distribution  in respect of any capital  stock of
the  Company or any  redemption,  purchase  or other  acquisition  of any of its
securities,  (f) any material damage,  destruction or loss to material property,
whether or not covered by  insurance,  (g) any  settlement  or compromise of any
material  litigation,  action  or  claim,  or (h)  other  than  pursuant  to the
contracts and Plans expressly  referred to in Section 3.11 hereof,  any increase
in,  establishment  or material  amendment 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 officers or key  employees of
the Company or any Subsidiary,  except for salary increases and benefit accruals
in the ordinary course of business consistent with past practice.

      SECTION  3.10.  Absence  of  Litigation.  Except as set forth on  Schedule
3.10-1 of the Company  Disclosure  Schedule,  there is no suit,  claim,  action,
proceeding,  compliance review or investigation  pending or, to the knowledge of
the Company,  threatened against the Company or any Subsidiary,  or any property
or asset of the  Company or any  Subsidiary,

                                       16
<PAGE>

before any court, arbitrator or Governmental  Authority,  which (a) individually
or in the aggregate,  would have a Company Material Adverse Effect, or (b) seeks
to delay or prevent  the  consummation  of the Merger or the other  transactions
contemplated  hereby.  Except as set  forth on  Section  3.10-2  of the  Company
Disclosure Schedule,  neither the Company nor any Subsidiary nor any property or
asset of the Company or any Subsidiary is subject to any order, writ,  judgment,
injunction,  decree, determination or award which would have, individually or in
the aggregate, a Company Material Adverse Effect.

      SECTION  3.11.  Employee  Benefit  Plans.  Schedule  3.11  of the  Company
Disclosure  Schedule sets forth a true and complete list of (i) all the employee
benefit plans and programs  maintained  and currently in effect or for which the
Company or any  Subsidiary  may have any  responsibility  or  liability  for the
benefit of any current or former employee, officer or director of the Company or
any  Subsidiary,  as amended to date (the  "Plans");  and (ii) all contracts and
agreements  relating to  employment  which  provide for annual  compensation  in
excess of $150,000 and all severance or change of control  agreements,  with any
of the  directors,  officers or  employees  of the  Company or its  Subsidiaries
(other than, in each case,  any such contract or agreement that is terminable at
any time by the Company or a  Subsidiary  at will and  without  penalty or other
adverse  consequence)  (the "Employment  Contracts").  Parent has been furnished
with a true and complete  copy of each Plan,  and with respect to each such Plan
true,  correct  and  complete  copies of (a) any  associated  trust,  custodial,
insurance or service  agreements,  (b) any annual report,  actuarial  report, or
disclosure  materials  (including  specifically  any summary plan  descriptions)
submitted  to  any  governmental   agency  or  distributed  to  participants  or
beneficiaries  thereunder  in the  current  or any of the  three  (3)  preceding
calendar years and (c) the most recently received IRS determination  letters and
any governmental  advisory opinions,  rulings,  compliance  statements,  closing
agreements,  or  similar  materials  specific  to such Plan and each  Employment
Contract.  Except  as set  forth  in  Schedule  3.11 of the  Company  Disclosure
Schedule:  (i) none of the Plans is a  multiemployer  plan within the meaning of
Section  4001(a)(3) of the Employee  Retirement  Income Security Act of 1974, as
amended  ("ERISA");  (ii) none of the Plans or Employment  Contracts promises or
provides  retiree  medical or life  insurance  benefits to any person  except as
required by Part 6 of Title I of ERISA, Section 4980B of the Code or any similar
state Law relating to the continuation of health insurance coverage;  (iii) each
Plan intended to be qualified  under  Section  401(a) of the Code has received a
favorable  determination  letter from the Internal Revenue Service that it is so
qualified  and  nothing  has  occurred  since the date of such letter that could
reasonably be expected to adversely  affect the  qualified  status of such Plan;
(iv) none of the Plans or Employment  Contracts  promises or provides  severance
benefits or benefits contingent upon a change in ownership or control within the
meaning  of Section  280G of the Code;  (v) each Plan has been  operated  in all
material  respects  in  accordance  with  its  terms  and  the  requirements  of
applicable  Law;  (vi) none of the Plans is subject to Title IV of ERISA;  (vii)
neither the  Company  nor any  Subsidiary  has  incurred  any direct or indirect
liability  under,  arising  out of,  or by  operation  of  Title  IV of ERISA in
connection  with,  the  termination  of, or withdrawal  from,  any Plan or other
retirement plan or arrangement; and (viii) the Company and the Subsidiaries have
not incurred any liability  under,  and have  complied in all material  respects
with,  the Worker  Adjustment  Retraining  Notification  Act.

                                       17
<PAGE>

Other than routine  claims for benefits  under the Plans,  no claim with respect
to,  or legal  proceeding  involving,  any Plan or a  breach  of any  Employment
Contract is pending or, to the knowledge of the Company, threatened.

      SECTION 3.12.  Labor Matters.  Neither the Company nor any Subsidiary is a
party to any  collective  bargaining  agreement  or other labor  union  contract
applicable  to persons  employed  by the  Company or any  Subsidiary,  and since
January  1, 2001 there has not  occurred  any  strike,  work  stoppage  or union
organizing  effort  and,  to the  knowledge  of the  Company,  no such action is
threatened or contemplated. Neither the Company nor any Subsidiary is engaged in
any material  unfair labor practice (as defined in the National Labor  Relations
Act).

      SECTION 3.13. Personal Property, Real Property and Leases.

      (a) The Company has never owned any real property.  Schedule 3.13-1 of the
Company  Disclosure  Schedule  sets forth a true and  complete  list of all real
property  leased by the Company or any  Subsidiary  since 1991,  and  separately
identifies  that  which is,  or was  previously,  leased.  The  Company  and the
Subsidiaries  have valid leasehold  interests to or in all of the properties and
assets necessary to conduct their respective  businesses as currently  conducted
and, except as set forth on Schedule 3.13-2 of the Company Disclosure  Schedule,
there  are  no  material  security  interests  or  encumbrances  on  such  owned
properties and assets.  The owned properties and assets and, to the knowledge of
the Company, the leased properties and assets, necessary to conduct the business
of the Company and the  Subsidiaries  as currently  conducted  are  structurally
sound in all material  respects,  are in good  operating  condition  and repair,
normal wear and tear  excepted,  and are adequate for the uses to which they are
being put, and none of such  properties or assets is in need of  maintenance  or
repairs,  except for  ordinary,  routine  maintenance  and repairs  that are not
material in nature or cost.

      (b) All  leases of real  property  leased  for the use or  benefit  of the
Company or any  Subsidiary  to which the  Company or any  Subsidiary  is a party
requiring  rental  payments in excess of $50,000 during the period of the lease,
and all amendments and modifications  thereto,  are in full force and effect and
have not been  modified or amended,  and there exists no material  default under
any such lease by the  Company,  any  Subsidiary,  or, to the  knowledge  of the
Company, by any other party thereto, nor any event which with notice or lapse of
time or both would  constitute a material  default  thereunder by the Company or
any Subsidiary or, to the knowledge of the Company, by any other party thereto.

      SECTION 3.14. Intellectual Property. "Company Intellectual Property" means
all  trademarks,  trademark  rights,  trade names,  trade name rights,  patents,
patent rights, industrial models, inventions,  copyrights,  servicemarks,  trade
secrets,  know-how,  computer software programs and other proprietary rights and
information  used or held for use in connection with the business of the Company
and the  Subsidiaries  as currently  conducted,  together with all  applications
currently pending for any of the foregoing.  Except as (i) set forth in Schedule
3.14-1 of the Company Disclosure Schedule; or (ii) would not have,  individually
or in the aggregate,  a Company  Material  Adverse  Effect,  the Company and the

                                       18
<PAGE>

Subsidiaries  own or have legally  enforceable  rights to use all of the Company
Intellectual Property, and no assertion or claim in writing has been received by
the Company or any Subsidiary (or, to the knowledge of the Company, is there any
basis therefor)  challenging  the validity of the Company's or any  Subsidiary's
ownership of, or right to use, any Company Intellectual Property.  Except as set
forth on Schedule 3.14-2 of the Company Disclosure Schedule, neither the Company
nor any Subsidiary is party to any material license or other agreement  pursuant
to which it has the right to use any Company  Intellectual  Property utilized in
connection   with  any  product  or  process  of  the  Company  or  any  of  its
Subsidiaries.  Except as set forth on Schedule 3.14-3 of the Company  Disclosure
Schedule, there are no pending, or to the knowledge of the Company,  threatened,
interferences,  re-examinations, oppositions or nullities involving any patents,
patent rights or  applications  therefor of the Company or any Subsidiary  that,
individually or in the aggregate,  would have a Company Material Adverse Effect.
Except as set forth on Schedule  3.14-4,  all  employees  of the Company and the
Subsidiaries since January 1, 2000 have executed  confidentiality  and invention
assignment agreements in the forms previously delivered to the Parent. Except as
set forth in Schedule 3.14-5 of the Company Disclosure Schedule, there have been
no notices  received by the Company  from, or claims made against the Company or
any  Subsidiary  by, or to the  knowledge  of the  Company,  claims  against the
Company or any  Subsidiary  threatened  by, third  parties  regarding  actual or
potential  infringements  of  any  Company  Intellectual  Property.   Except  as
disclosed in Schedule 3.14-6 of the Company  Disclosure  Schedule,  there are no
infringements  by third  parties of any  Company  Intellectual  Property  which,
individually or in the aggregate,  would have a Company Material Adverse Effect.
Except  as set forth on  Schedule  3.14-7 of the  Company  Disclosure  Schedule,
neither the Company nor any Subsidiary  has licensed or otherwise  permitted the
use by any third party of any Company Intellectual Property (other than end-user
licenses to customers in the ordinary  course of business  consistent  with past
practice).

      SECTION 3.15.  Taxes.  Except as set forth on Schedule 3.15 of the Company
Disclosure  Schedule,  (i) the  Company  and the  Subsidiaries  have  filed  all
federal,  state,  local and foreign Tax returns and reports required to be filed
by them on or prior to the date  hereof,  and all  such Tax  returns  are  true,
correct, and complete in all material respects; (ii) each of the Company and the
Subsidiaries  have  paid on a timely  basis  all  Taxes  when  and as due  under
applicable  Law,  other than such  payments as are  immaterial  in amount or are
being  contested  in good  faith by  appropriate  proceedings  (each of which is
described on Schedule 3.15 of the Company  Disclosure  Schedule);  (iii) neither
the Company nor any of the  Subsidiaries has ever been subject to any Tax audit;
(iv)  neither the  Internal  Revenue  Service  (the "IRS") nor any other  Taxing
authority or agency,  domestic or foreign, is now asserting or, to the knowledge
of the Company,  threatening to assert against the Company or any Subsidiary any
deficiency  or claim for  additional  Taxes;  (v) none of the Tax returns of the
Company and its  Subsidiaries  contains or will contain a  disclosure  statement
under Code Section 6662 of the Code or any similar provision of state, local, or
foreign Law; (vi) neither the Company nor any  Subsidiary has granted any waiver
of any statute of limitations  with respect to, or any extension of a period for
the assessment of, any federal,  state, county,  municipal or foreign Tax, which
waiver or extension remains in effect; (vii) the accruals and reserves for Taxes
reflected  in the  Company  2003  Balance  Sheet and the  Company's  most

                                       19
<PAGE>

recent  quarterly  financial  statements,  adjusted  to  reflect  additions  and
deletions  thereto  since the date  thereof  arising in the  ordinary  course of
business  and  consistent  with past  practice,  are adequate to cover all Taxes
accruable  in  accordance  with  United  States  generally  accepted  accounting
principles  through the Effective Time;  (viii) the Company and the Subsidiaries
have  withheld  or  collected  and  paid  over to the  appropriate  Governmental
Authorities  or are properly  holding for such payment all Taxes required by Law
to be withheld or collected,  and the Company and the Subsidiaries have complied
in all material respects with all information  reporting and backup  withholding
requirements, including maintenance of required records with respect thereto, in
connection  with amounts paid or owing to any  employee,  creditor,  independent
contractor,  or other  third  party;  (ix) there are no liens for Taxes upon the
assets of the  Company or the  Subsidiaries,  other than liens for Taxes not yet
due or  owing  or  that  are  being  contested  in  good  faith  by  appropriate
proceedings  (each  of  which  is  described  on  Schedule  3.15 of the  Company
Disclosure  Schedule);  (x) neither the Company nor any of its  Subsidiaries  is
party to or bound by (nor will the Company or any of its Subsidiaries,  prior to
the Effective Time, become a party to or become bound by) any Tax indemnity, Tax
sharing  or Tax  allocation  agreement;  (xi)  except for the group of which the
Company is presently the common  parent,  the Company has never been a member of
an affiliated group of  corporations,  within the meaning of Section 1504 of the
Code, other than as a common parent corporation, and none of the Subsidiaries of
the  Company  has ever been a member  of an  affiliated  group of  corporations,
within the meaning of Section 1504 of the Code, except where the Company was the
common parent corporation of such affiliated group; (xii) all material elections
with respect to Taxes affecting the Company and the  Subsidiaries as of the date
of this  Agreement  are  reflected on the Tax returns made  available to Parent;
(xiii)  neither the Company nor any  Subsidiary  is currently  nor has ever been
subject to the reporting  requirements of Code Section 6038A;  (xiv) none of the
assets of the Company nor of any Subsidiary is property which the Company or any
such Subsidiary is required to treat as being owned by any other person pursuant
to the so-called "safe harbor lease"  provisions of former Section 168(f) of the
Code;  (xv) none of the assets of the Company or of any  Subsidiary  directly or
indirectly  secures any debt the interest on which is tax exempt  under  Section
103(a) of the Code; (xvi) none of the assets of the Company or of any Subsidiary
is "tax exempt use property"  within the meaning of Section  168(h) of the Code;
(xvii) neither the Company nor any Subsidiary has  participated  in, nor will it
participate  in, an  international  boycott within the meaning of Section 999 of
the Code;  (xviii)  neither  the Company  nor any  Subsidiary  is a party to any
Employment Contract or Plan that has resulted or would result,  separately or in
the  aggregate,  in the payment of any "excess  parachute  payments"  within the
meaning  of  Section  280G  of the  Code;  (xix)  neither  the  Company  nor any
Subsidiary  is, nor has it ever been,  a United  States  real  property  holding
corporation (as defined in Section  897(c)(2) of the Code) during the applicable
period  specified  in Section  897(c)(1)(A)(ii)of  the Code;  (xx)  neither  the
Company nor any Subsidiary  has, nor has it ever had, a permanent  establishment
in any foreign  country,  as defined in any  applicable Tax treaty or convention
between  the United  States of America  and such  foreign  country  nor,  in the
absence  of such  Treaty,  in the  manner  contemplated  under  the Laws of such
foreign  country;  (xxi)  the  Company  is not a  party  to any  joint  venture,
partnership  or other  arrangement  or  contract  which  could be  treated  as a
partnership for federal income tax purposes;  and (xxii) neither the Company nor
any

                                       20
<PAGE>

Subsidiary  has taken any action  that would  have the effect of  deferring  any
material  liability  for Taxes from any taxable  period  ending on or before the
Closing Date to any taxable period ending thereafter.

      SECTION 3.16. Environmental Matters.

      (a) For purposes of this  Agreement,  the  following  terms shall have the
following  meanings:  (i)  "Hazardous  Substances"  means (A)  those  substances
defined in or regulated under any of the following U.S.  federal statutes and/or
their state or foreign  counterparts,  as each may be amended from time to time,
and all regulations thereunder:  the Hazardous Materials Transportation Act, the
Resource   Conservation  and  Recovery  Act,  the  Comprehensive   Environmental
Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking
Water Act, the Toxic Substances  Control Act, the Atomic Energy Act, the Federal
Insecticide,  Fungicide, and Rodenticide Act, the Occupational Health and Safety
Act and the Clean Air Act; (B) petroleum and petroleum  products including crude
oil and any fractions thereof;  (C) natural gas, synthetic gas, and any mixtures
thereof;  (D) radon; (E) asbestos;  (F) any other pollutant or contaminant;  and
(G) any  substance  with  respect  to which a  federal,  state  or local  agency
requires environmental investigation,  monitoring, reporting or remediation; and
(ii) "Environmental Laws" means any U.S. federal, state or local or foreign law,
including,  without limitation,  any code or rule of common law, relating to (A)
releases or threatened releases of Hazardous  Substances or materials containing
Hazardous Substances; (B) the manufacture,  handling, transport, use, treatment,
management,  storage or disposal of, or exposure  to,  Hazardous  Substances  or
materials  containing  Hazardous  Substances;   or  (C)  otherwise  relating  to
pollution of the  environment  or the  protection of natural  resources or human
health.

      (b)  Except  as set  forth  on  Schedule  3.16 of the  Company  Disclosure
Schedule (which description shall include an estimate of the Company's potential
financial  liability  with respect to each matter so described) or as would not,
individually or in the aggregate,  have a Company Material  Adverse Effect:  (i)
neither the Company nor any of its  Subsidiaries has violated or is in violation
of any  Environmental  Law;  (ii) there is and has been no  release,  threatened
release,  contamination,  disposal, spilling, dumping, incineration,  discharge,
storage or treatment of any  Hazardous  Substance,  at, on, under or from any of
the properties owned or, to the knowledge of the Company,  leased by the Company
or any of its Subsidiaries (including, without limitation, soils and surface and
ground waters);  (iii) to the knowledge of the Company,  neither the Company nor
any of its Subsidiaries is liable for any  contamination,  release or threatened
release of  Hazardous  Substances  at any  location  off of the  properties  and
facilities owned or operated by the Company or any Subsidiary;  (iv) neither the
Company nor any  Subsidiary  is liable with  respect to any pending  claims that
have been or, to the Company's  knowledge,  are  threatened to be asserted under
any  Environmental  Law;  (v) the Company and each of its  Subsidiaries  has all
permits,  licenses  and  other  authorizations  and has made all  registrations,
notifications,  reports and  submissions  required under any  Environmental  Law
("Environmental  Permits");  (vi) each of the Company and its  Subsidiaries  has
been and is in compliance  with its  Environmental  Permits;  (vii) there are no
pending,  or, to the  knowledge of the Company,  threatened  claims

                                       21
<PAGE>

against  the  Company  or  any  Subsidiary  arising  under  or  relating  to any
Environmental Law or Hazardous Substance;  (viii) neither the Company nor any of
its Subsidiaries is subject to or has entered into any order, consent, decree or
other  agreement  under  or  relating  to any  Environmental  Law  or  Hazardous
Substance;  and (ix) neither the Company nor any of its Subsidiaries has entered
into any written or unwritten  agreement pursuant to which the Company or any of
the  Subsidiaries  are obligated to assume,  indemnify,  defend,  hold harmless,
release or perform  any  liabilities,  claims or  obligations  arising  under or
related to any Environmental Law or Hazardous Substance.

      SECTION 3.17. Material Contracts and Government Contracts.

      (a)  Subsections  (i) through  (viii) of  Schedule  3.17(a) of the Company
Disclosure  Schedule set forth a true and complete  list of all of the following
contracts and agreements  (including,  without  limitation,  oral agreements) to
which the  Company or any  Subsidiary  is a party  (each of such  contracts  and
agreements and each other contract or agreement of the Company or any Subsidiary
entered into after the date of this  Agreement  that would have been required to
be set forth on Schedule 3.17(a) of the Company  Disclosure  Schedule,  had such
contract or agreement  been  entered  into prior to the date of this  Agreement,
collectively, the "Material Contracts"):

            (i) each  contract and  agreement  (other than any routine  purchase
      order or pricing quote made in the ordinary  course of business  involving
      less than  $50,000) for the  purchase of  inventory,  spare  parts,  other
      materials or personal  property with any supplier or for the furnishing of
      services  to the  Company or any  Subsidiary  under the terms of which the
      Company or any  Subsidiary:  (A) paid or otherwise gave  consideration  of
      more than  $100,000  in the  aggregate  during  the  calendar  year  ended
      December 31, 2003, (B) is likely to pay or otherwise give consideration of
      more than  $100,000  in the  aggregate  during the  calendar  year  ending
      December 31, 2004, (C) is likely to pay or otherwise give consideration of
      more  than  $100,000  in the  aggregate  over  the  remaining  term of the
      contract  or  agreement  or (D) cannot be  canceled by the Company or such
      Subsidiary on thirty (30) or fewer days notice without  penalty or further
      payment of less than $25,000;

            (ii) each  customer  contract  and  agreement  (other  than  routine
      purchase  orders or pricing quotes made in the ordinary course of business
      involving  less than  $20,000  individually)  to which the  Company or any
      Subsidiary  is a party  which:  (A)  involved  consideration  of more than
      $20,000 in the aggregate during the calendar year ended December 31, 2003,
      (B) is  likely  to  involve  consideration  of more  than  $20,000  in the
      aggregate during the calendar year ending December 31, 2004, (C) is likely
      to involve  consideration  of more than $20,000 in the aggregate  over the
      remaining term of the contract or (D) cannot be canceled by the Company or
      such  Subsidiary  on thirty (30) or fewer days notice  without  penalty or
      further payment of less than $20,000;

                                       22
<PAGE>

            (iii) each management contract and each contract with an independent
      contractor or consultant (or similar  arrangement) to which the Company or
      any Subsidiary is a party and which:  (A) involved  consideration  of more
      than $10,000 in the aggregate  during the calendar year ended December 31,
      2003, (B) is likely to involve  consideration  of more than $10,000 in the
      aggregate during the calendar year ending December 31, 2004, (C) is likely
      to involve  consideration  of more than $10,000 in the aggregate  over the
      remaining  term of the contract,  or (D) cannot be canceled by the Company
      or such  Subsidiary on thirty (30) or fewer days notice without penalty or
      further payment of less than $10,000;

            (iv)  all  contracts  and  agreements  (excluding  routine  checking
      account overdraft agreements involving petty cash amounts) under which the
      Company  or any  Subsidiary  has  created,  incurred,  assumed,  agreed to
      indemnify against or guaranteed (or may so create, incur, assume, agree to
      indemnify against or guarantee) indebtedness involving an amount in excess
      of $25,000 in any  individual  case or  $50,000in  the  aggregate or under
      which the Company or any  Subsidiary has granted or incurred (or may grant
      or incur) a security  interest or lien on any of their respective  assets,
      whether  tangible or intangible,  to secure  indebtedness  of an amount in
      excess of $25,000 in any  individual  case or $50,000 in the  aggregate or
      under which the Company or any Subsidiary has agreed to indemnify  against
      or guarantee obligations (other than indebtedness)  involving an amount in
      excess of $25,000 in any individual case or $50,000 in the aggregate;

            (v) each  contract  and  agreement  that  limits the  ability of the
      Company or and Subsidiary or, after the Effective  Time,  Parent or any of
      its  affiliates,  to compete in any line of business or with any person or
      in any  geographic  area or during any period of time,  or to solicit  any
      customer or client;

            (vi) each contract and agreement between or among the Company or any
      Subsidiary,  on the one hand,  and any  affiliate  (as  defined in Section
      9.03(a) hereof) of the Company, including without limitation,  present and
      former  officers or directors of the Company or any  Subsidiary  or any of
      their  respective  associates,  on  the  other  hand,  including,  without
      limitation, any agreement to indemnify, advance expenses and/or defend any
      of the foregoing in respect of any matter;

            (vii)  each  contract  and  agreement  to which the  Company  or any
      Subsidiary  is a party under  which it has agreed to supply  products to a
      customer  at  specified  prices,  whether  directly  or through a specific
      distributor,  manufacturer's  representative  or  dealer,  which  contract
      involves  products or sales of at least $100,000 and extends for more than
      one year; and

            (viii) each other  contract and  agreement (A) the absence or breach
      of which would have a Company Material  Adverse Effect,  or (B) that would
      be deemed to be material  pursuant to Item 601 of Regulation S-K under the
      Securities Act.

                                       23
<PAGE>

      (b) Each Material Contract is a legal,  valid and binding agreement of the
Company  or a  Subsidiary,  as the  case may be,  except  as may be  limited  by
bankruptcy,  insolvency,  reorganization,  moratorium and other similar laws and
equitable  principles relating to or limiting creditors' rights generally and by
general principles of equity, and none of the Company, any Subsidiary or, to the
knowledge of the Company,  any other party thereto, is in material default under
any Material  Contract;  neither the Company nor any Subsidiary is in receipt of
any notice of default  under any Material  Contract;  and none of the Company or
any of the Subsidiaries  anticipates any termination or change to, or receipt of
a proposal  with  respect to, any of the  Material  Contracts as a result of the
Merger or  otherwise.  Except as set forth on  Schedule  3.17(b) of the  Company
Disclosure  Schedule,  the Company has  furnished  Parent with true and complete
copies of all Material  Contracts,  together with all  amendments,  waivers,  or
other changes thereto.

      (c) For purposes of this Section  3.17,  (i) the term  "Government"  shall
mean  any  entity  within  the  U.S.  federal  government;  and  (ii)  the  term
"Government  Contract"  shall mean any Government  prime  contract,  cooperative
research and development agreement,  "other transaction",  or any subcontract at
any tier under a Government  prime  contract,  or any basic ordering  agreement,
letter contract, purchase order or delivery order of any kind, including without
limitation,  as to all of  the  foregoing,  all  amendments,  modifications  and
options thereunder or relating thereto.

      (d) Schedule 3.17(d) of the Company Disclosure  Schedule sets forth a true
and complete list of: (i) all  Government  Contracts  currently in force between
the Company or any  Subsidiary  and the  Government  or any prime  contractor or
subcontractor;  (ii) all outstanding quotations, bids and proposals submitted by
the Company or any Subsidiary,  which the Company  believes are still subject to
acceptance,  to the  Government or any prime  contractor or  subcontractor;  and
(iii) any Government Contract that by its terms remains subject to audit.

      (e)  Except as set forth on  Schedule  3.17(e) of the  Company  Disclosure
Schedule,  with respect to Government Contracts,  there is no pending or, to the
knowledge  of the  Company,  threatened,  (i) civil  fraud or  criminal  action,
proceeding or investigation by any  Governmental  Authority,  (ii) suspension or
debarment  action or  proceeding  against the Company or any  Subsidiary,  (iii)
request by the  Government for a contract  price  adjustment  based on a claimed
disallowance  by the Government in excess of $25,000,  (iv) dispute  between the
Company or any of its  Subsidiaries  and the Government  which has resulted in a
government contracting officer's  determination and finding final decision where
the amount in controversy exceeds, or is reasonably likely to exceed, $25,000 or
(v) claim or  equitable  adjustment  by the  Company or any of its  Subsidiaries
against the Government in excess of $25,000.

      SECTION  3.18.  Opinion  of  Financial  Advisor.  The  Company's  Board of
Directors has received the opinion of Needham & Company, Inc. ("Needham") to the
effect  that,  as of the date of this  Agreement,  the Per  Share  Amount  to be
received by the holders of Common  Stock  pursuant to the Merger is fair to such
holders from a financial  point of view.

                                       24
<PAGE>

The  Company  has  provided a copy of such  opinion to Parent.  The  Company has
received  the consent of Needham to include  such  opinion in the Company  Proxy
Statement.

      SECTION 3.19.  Board  Approval;  Vote  Required.  The  Company's  Board of
Directors,  at a meeting duly called and held on September 1, 2004, at which all
directors were present, duly and unanimously adopted resolutions:  (i) approving
this Agreement and the transactions  contemplated hereby,  including the Merger;
(ii)  declaring that this Agreement is advisable;  (iii)  determining  that this
Agreement and the transactions  contemplated  hereby,  including the Merger, are
fair to, and in the best interests of, the Company and its stockholders and that
the consideration to be paid for each Share in the Merger is fair to the holders
of Shares;  and (iv)  recommending that the Company's  stockholders  approve and
adopt this Agreement and the  transactions  contemplated  hereby,  including the
Merger.  None of the aforesaid  resolutions by the Company's  Board of Directors
has been amended,  rescinded or modified. The affirmative vote of the holders of
a majority  of the Shares  outstanding  as of the  record  date for the  Company
Stockholders'  Meeting is the only vote of the holders of any class or series of
capital stock of the Company  necessary to adopt this  Agreement and approve the
transactions contemplated by this Agreement, including the Merger.

      SECTION  3.20.  Brokers.  No broker,  finder,  investment  banker or other
person  (other  than  Needham)  is  entitled  to or will be paid any  brokerage,
finder's  or similar  fee or  commission  in  connection  with the  transactions
contemplated by this Agreement based upon  arrangements  made by or on behalf of
the Company or any Subsidiary.  The Company has heretofore furnished to Parent a
complete  and  correct  copy of all  agreements  between the Company and Needham
pursuant to which such firm would be  entitled  to any  payment  relating to the
transactions  contemplated  by this  Agreement.  Schedule  3.20  of the  Company
Disclosure  Schedule  discloses the maximum  aggregate amount of all costs, fees
and  expenses  that  will be paid or will  be  payable  by the  Company  and its
Subsidiaries  to all attorneys,  accountants  and  investment  bankers and other
experts and consultants and all printing and advertising  expenses in connection
with the Merger and the transactions contemplated by this Agreement.

      SECTION 3.21. Customers.  Schedule 3.21 of the Company Disclosure Schedule
sets forth the twenty-five (25) largest customers of the Company, each ranked by
revenue,  for the most recent fiscal year.  Except as set forth on Schedule 3.21
of the Company Disclosure Schedule,  since January 1, 2003, no customer named on
Schedule 3.21 has canceled, otherwise terminated or materially curtailed, or, to
the  knowledge  of the Company,  threatened  to cancel,  otherwise  terminate or
materially  curtail  its  relationship  with the  Company,  except as would not,
individually or in the aggregate, have a Company Material Adverse Effect.

      SECTION  3.22.  Suppliers.  Except  as set forth on  Schedule  3.22 of the
Company  Disclosure  Schedule,  since December 31, 2003 no material  supplier or
service  provider of the Company or any Subsidiary has indicated it will stop or
materially decrease the supply or materials, products or services to the Company
or such  Subsidiary  or is

                                       25
<PAGE>

otherwise  involved in or, to the  knowledge of the Company,  is  threatening  a
material dispute with the Company or such Subsidiary.

      SECTION 3.23. Certain Payments.  Neither the Company nor any Subsidiary or
any director,  officer,  agent or employee of the Company or any Subsidiary,  or
any other  person  associated  with or acting for or on behalf of the Company or
any  Subsidiary,  has directly or indirectly  (a) made any  contribution,  gift,
bribe,  rebate,  payoff,  influence  payment,  kickback or other  payment to any
person or Governmental Authority, regardless of form, whether in money, property
or services (i) to obtain favorable treatment in securing business,  (ii) to pay
for  favorable   treatment  for  business  secured,   (iii)  to  obtain  special
concessions or for special  concessions  already obtained,  for or in respect of
the Company, any Subsidiary or any affiliate of the Company or any Subsidiary or
(iv) in violation of any federal,  state,  territorial,  local or foreign Law or
(b)  established  or maintained  any fund or asset that has not been recorded in
the books and records of the Company or any Subsidiary.

      SECTION 3.24. Section 203 of the DGCL. No state  anti-takeover  statute or
similar charter or bylaw provisions of the Company are applicable to the Merger,
this Agreement or the transactions contemplated hereby.

      SECTION  3.25.  Insurance.  Schedule  3.25-1  of  the  Company  Disclosure
Schedule  contains a true and complete list of all material  insurance  policies
and binders,  insurance policies which have retrospective premium mechanisms and
programs of self-insurance  owned, held or maintained by the Company on the date
of this  Agreement or at any time during the previous  three calendar years that
afford or afforded,  as the case may be, coverage to the Company,  its assets or
businesses.  The  Company's  insurance  policies are in full force and effect in
accordance with their terms, no notice of  cancellation  has been received,  and
there is no existing  material  default or event that, with the giving of notice
or lapse of time or both, would constitute a default thereunder. All premiums to
date have been paid in full. The Company and any of its covered  Subsidiaries is
a "named insured" or an "insured" under such insurance policies. The Company and
its  Subsidiaries  have not been refused any insurance,  nor has the coverage of
the Company or any of its Subsidiaries been limited, by any insurance carrier to
which it has applied for insurance or with which it has carried insurance during
the past three (3) years.  Except as set forth on Schedule 3.25-2 of the Company
Disclosure Schedule,  the policies of fire, theft, liability and other insurance
maintained  with  respect to the assets or  businesses  of the  Company  and its
Subsidiaries  may be  continued  by the  Company  and its  Subsidiaries  without
modification  or premium  increase after the Effective Time and for the duration
of their current  terms,  which terms expire as set forth on Schedule  3.25-3 of
the Company  Disclosure  Schedule.  Set forth on Schedule  3.25-4 of the Company
Disclosure  Schedule is the amount of the annual  premium  currently paid by the
Company for its directors' and officers' liability insurance.

                                       26
<PAGE>

                                   ARTICLE IV

                    REPRESENTATIONS AND WARRANTIES OF PARENT
                              AND MERGER SUBSIDIARY

      Parent and Merger Subsidiary hereby, jointly and severally,  represent and
warrant to the Company that:

      SECTION 4.01. Organization and Qualification; Subsidiaries. Each of Parent
and Merger  Subsidiary is a corporation duly organized,  validly existing and in
good standing under the Laws of the  jurisdiction of its  incorporation  and has
the requisite  power and authority to own,  lease and operate its properties and
to carry on its business as it is now being conducted. Each of Parent and Merger
Subsidiary  is  duly  qualified  or  licensed  as a  foreign  corporation  to do
business,  and is in good standing,  in each jurisdiction where the character of
the  properties  owned,  leased or operated by it or the nature of its  business
makes such qualification or licensing necessary, except for any failure(s) to be
so qualified or licensed or in good standing that would not,  individually or in
the aggregate,  have a Parent Material Adverse Effect (as hereinafter  defined).
The term "Parent  Material Adverse Effect" means any change or effect that is or
is  reasonably  likely to be  materially  adverse  to the  business,  results of
operations or condition (financial or otherwise) of Parent and its subsidiaries,
taken as a whole, or otherwise  materially and adversely  affects the ability of
the Parent and Merger  Subsidiary to consummate  the  transactions  contemplated
hereby.

      SECTION  4.02.  Certificate  of  Incorporation  and  By-laws.  Parent  has
heretofore  furnished  to  the  Company  a  complete  and  correct  copy  of the
Certificate of Incorporation and the By-laws, each as amended to date, of Parent
and Merger  Subsidiary.  Such  Certificates of Incorporation  and By-laws are in
full force and effect.  Neither Parent nor Merger  Subsidiary is in violation of
any provision of its Certificate of Incorporation or By-laws.

      SECTION 4.03.  Authority  Relative to this  Agreement.  Each of Parent and
Merger Subsidiary has all necessary corporate power and authority to execute and
deliver this Agreement,  to perform its obligations  hereunder and to consummate
the Merger and the other  transactions  contemplated  hereby.  The execution and
delivery of this Agreement by Parent and Merger  Subsidiary and the consummation
by Parent  and  Merger  Subsidiary  of the  Merger  and the  other  transactions
contemplated  hereby  have been duly and  validly  authorized  by all  necessary
corporate  action,  and no other corporate  proceedings on the part of Parent or
Merger Subsidiary are necessary to authorize this Agreement or to consummate the
Merger and the other transactions  contemplated  hereby. This Agreement has been
duly and validly  executed and  delivered by Parent and Merger  Subsidiary  and,
assuming due authorization, execution and delivery by the Company, constitutes a
legal,  valid and  binding  obligation  of each of Parent and Merger  Subsidiary
enforceable  against each of Parent and Merger Subsidiary in accordance with its
terms,  except as may be  limited  by  bankruptcy,

                                       27
<PAGE>

insolvency,  reorganization,  moratorium  and other  similar laws and  equitable
principles  relating to or limiting  creditors'  rights generally and by general
principles of equity.

      SECTION 4.04. No Conflict; Required Filings and Consents.

      (a) The  execution  and  delivery of this  Agreement  by Parent and Merger
Subsidiary do not, and the  performance  of this  Agreement by Parent and Merger
Subsidiary   will  not,  (i)  conflict  with  or  violate  the   Certificate  of
Incorporation or By-laws of Parent or Merger  Subsidiary;  (ii) conflict with or
violate  in any  material  respect  any Laws  applicable  to  Parent  or  Merger
Subsidiary  or by which  any  property  or asset of  either  of them is bound or
affected;  or (iii)  except as  specified  in Schedule  4.04(a) of the  separate
Disclosure Schedule  previously  delivered by Parent to the Company (the "Parent
Disclosure Schedule"),  require a consent under, violate,  conflict with, result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would  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  property or asset of Parent or
Merger  Subsidiary  pursuant to, any material  promissory note, bond,  mortgage,
indenture,  contract,  agreement,  lease,  license,  permit,  franchise or other
instrument or  obligation to which Parent or Merger  Subsidiary is a party or by
which Parent or Merger  Subsidiary or any property or asset of either of them is
otherwise bound or affected.

      (b) The  execution  and  delivery of this  Agreement  by Parent and Merger
Subsidiary do not, and the  performance of this Agreement,  the  consummation of
the Merger and the other  transactions  contemplated  hereby and compliance with
the  provisions  of this  Agreement  by Parent and Merger  Subsidiary  will not,
require any  consent,  approval,  authorization  or permit of, or filing with or
notification  to, any  Governmental  Entity,  except (i)  registrations or other
actions  required under United States federal and state  securities  laws as are
contemplated by this Agreement;  (ii) actions required by the HSR Act; (iii) the
filing and recordation of appropriate  merger documents as required by the DGCL;
(iv) as set forth on Schedule 4.04(b) of the Parent Disclosure Schedule; and (v)
where failure to obtain such consents, approvals,  authorizations or permits, or
to make such filings or  notifications,  would not prevent or  materially  delay
consummation of the Merger or any other  transaction  contemplated  hereby,  and
would not,  individually  or in the aggregate,  have a Parent  Material  Adverse
Effect.

      SECTION 4.05. Absence of Litigation. There is no claim, action, proceeding
or investigation pending or, to the knowledge of the Parent,  threatened against
the Parent before any court, arbitrator or Governmental  Authority,  which seeks
to delay or prevent the consummation of the Merger and or any other  transaction
contemplated hereby.

      SECTION 4.06 Disclosure Documents.  None of the information supplied or to
be supplied by Parent or Merger Subsidiary in writing specifically for inclusion
or  incorporation  by reference in the Company Proxy  Statement will, when filed
with the SEC, at the date mailed to the Company's  stockholders  and at the time
of the meeting of the Company's  stockholders  to be held in connection with the
Merger,  contain any untrue

                                       28
<PAGE>

statement of a material  fact or omit to state any material  fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.

      SECTION 4.07 Brokers.  No broker,  finder or investment banker (other than
BNY  Capital  Markets,  Inc.) is entitled to any  brokerage  or finder's  fee or
commission in connection with the Merger based upon  arrangements  made by or on
behalf of Parent or Merger Subsidiary.

      SECTION 4.08 Board Approval. The Board of Directors of Parent has approved
this Agreement and the Merger and has determined  that the Merger is in the best
interests of Parent.  No action is necessary on the part of the  stockholders of
Parent in connection with this Agreement or the Merger.

      SECTION 4.09  Investigation  by Parent;  Company's  Liability.  Parent and
Merger Subsidiary acknowledge and agree that, except for the representations and
warranties  of the Company  contained in this  Agreement,  the Company  makes no
representation  or warranty.  Notwithstanding  Parent's  investigation  into the
affairs of the Company,  or any knowledge of facts  determined  or  determinable
pursuant to such  investigation,  the Parent  shall have the right to rely fully
upon  the  representations  and  warranties  of the  Company  set  forth in this
Agreement.

      SECTION 4.10 Third-Party Financing.  Parent has obtained a firm commitment
financing arrangement from a nationally recognized third-party lender to finance
Parent's payment of the Merger Consideration.

                                    ARTICLE V

                 CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME

      SECTION  5.01.  Conduct of Business by the Company  Pending the  Effective
Time. The Company covenants and agrees that,  between the date of this Agreement
and the earlier of the termination of this Agreement pursuant to Article VIII or
the  Effective  Time,  except  as set  forth  on  Schedule  5.01 of the  Company
Disclosure  Schedule or unless Parent shall otherwise consent in writing,  which
consent shall not be  unreasonably  withheld,  the businesses of the Company and
the  Subsidiaries   shall  be  conducted  only  in,  and  the  Company  and  the
Subsidiaries  shall  not take any  action  except  in,  the  ordinary  course of
business and in a manner  consistent with past practice or in furtherance of the
transactions  contemplated  by this  Agreement;  and the  Company  shall use all
commercially reasonable efforts to preserve intact its business organization, to
keep available the services of the current  officers,  employees and consultants
of the Company and the Subsidiaries and to preserve the current relationships of
the Company and the  Subsidiaries  with  customers,  suppliers and other persons
with which the  Company or any  Subsidiary  has  business  relations.  By way of
amplification and not limitation, except as contemplated by this Agreement or as
expressly set forth on Schedule 5.01 of the Company Disclosure Schedule,

                                       29
<PAGE>

neither the Company nor any of the Subsidiaries shall,  between the date of this
Agreement  and the  earlier of the  termination  of this  Agreement  pursuant to
Article VIII or the Effective Time, directly or indirectly do, propose or commit
to do, or authorize any of the following,  without the prior written  consent of
Parent, which consent shall not be unreasonably withheld:

      (a)  amend,  repeal  or  otherwise  change  the  Company's  or  any of its
Subsidiary's Organizational Documents;

      (b) issue, sell, pledge,  dispose of, grant or encumber,  or authorize the
issuance, sale, pledge, disposition,  grant or encumbrance of, any Shares or any
shares of any class of capital stock of the Company or the Subsidiaries,  or any
options, warrants, convertible securities or other rights of any kind to acquire
any Shares or shares of such  capital  stock,  or any other  ownership  interest
(including,  without  limitation,  any phantom interest),  of the Company or any
Subsidiary  (except,  subject to Section 2.04 hereof, for the issuance of shares
of Common Stock pursuant to the exercise or purchase,  in accordance  with their
respective  terms, of employee stock options or other awards  outstanding on the
date hereof as set forth on Schedule 3.03-1 to the Company Disclosure  Schedule,
provided that if any payment is required in connection  therewith,  such payment
shall be in cash or by net exercise,  if permitted under the terms of such stock
options);

      (c)  transfer,  lease,  license,  sell,  mortgage,  pledge,  dispose of or
encumber  any  assets of the  Company  or any  Subsidiary,  except  for sales of
finished  goods in the ordinary  course of business  and in a manner  consistent
with past practice;

      (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,  except  that a wholly  owned  Subsidiary  may declare and pay a
dividend to its parent;

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

      (f) (i) acquire (including,  without limitation, by merger,  consolidation
or  acquisition  of capital stock or assets) (A) any  corporation,  partnership,
other business  organization  or any division  thereof or (B) any assets outside
the ordinary course of business;  (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, or make any
loans or advances,  except in the ordinary  course of business to vendors and/or
employees and consistent with past practice;  (iii) authorize any single capital
expenditure  which is in excess  of  $25,000  or  capital  expenditures,  in the
aggregate, in excess of $200,000 for the Company and the Subsidiaries taken as a
whole; or (iv) enter into or amend in any respect any Material Contract or enter
into or amend in any respect any contract, agreement,  commitment or arrangement
with respect to any matter set forth in this subsection (f);

                                       30
<PAGE>

      (g) hire  any  employees  or  increase  (except  salary  increases  in the
ordinary course of business and consistent with past practice) the  compensation
payable or to become  payable to its officers or  employees  generally or to any
employee  with an  annual  salary in excess  of  $150,000,  or grant any  bonus,
severance  or  termination  pay to, or enter into any  employment  or  severance
agreement  with any  director,  officer or other  employee of the Company or any
Subsidiary, or 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 or employee;

      (h) take any  action,  other  than  reasonable  and usual  actions  in the
ordinary course of business and consistent  with past practice,  with respect to
accounting policies or procedures  (including,  without  limitation,  procedures
with  respect to the payment of  accounts  payable  and  collection  of accounts
receivable);

      (i) pay, discharge or otherwise satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment,  discharge or satisfaction,  in the ordinary course of business and
consistent with past practice,  of liabilities  reflected or reserved against in
the Company 2003 Balance Sheet, or subsequently  incurred in the ordinary course
of business and consistent with past practice;

      (j) fail to comply in all material respects with applicable Laws;

      (k) fail to pay and  discharge  any  Taxes on the  Company  (or any of its
Subsidiaries)  or against any of its  properties or assets before the same shall
become delinquent and before penalties accrue thereon,  except to the extent and
so long as the  same  are  being  contested  in good  faith  and by  appropriate
proceedings;

      (l) fail to  perform  any of its  obligations  under  any of the  Material
Contracts, or modify or terminate any of the Material Contracts; or

      (m) settle or compromise any material claims or litigation.

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

      SECTION 6.01.  Company Proxy Statement.  As promptly as practicable  after
the date of this  Agreement,  and, in any event,  within ten (10)  business days
thereafter,  the Company  shall  prepare and file with the SEC the Company Proxy
Statement  and  shall  cause the  Company  Proxy  Statement  to be mailed to the
Company's stockholders as promptly as practicable and, in any event, within five
(5)  business  days after the  Company  Proxy  Statement  is cleared by the SEC.
Notwithstanding   the   foregoing,   any  delay   caused  by   Parent's  or  its
representative's review of the Company Proxy Statement shall toll the

                                       31
<PAGE>

applicable  periods set forth above.  The Company will notify Parent promptly of
the receipt of, and will respond  promptly to, any comments  from the SEC or its
staff and any request by the SEC or its staff for  amendments or  supplements to
the Company  Proxy  Statement  or for  additional  information,  and will supply
Parent  with  copies of all  correspondence  between  the  Company or any of its
representatives,  on the one hand, and the SEC or its staff,  on the other hand,
with respect to the Company Proxy Statement or the Merger.  If at any time prior
to the approval of this  Agreement  by the  Company's  stockholders  there shall
occur any event that is required to be set forth in an amendment  or  supplement
to the Company Proxy Statement,  the Company will promptly notify Parent thereof
and prepare and mail to its  stockholders  such  amendment  or  supplement.  The
Company  shall  give  Parent  and its  counsel a  reasonable  opportunity  to be
involved  in the  drafting  of and review and  comment  upon any  Company  Proxy
Statement and any amendment or  supplement  thereto and any such  correspondence
prior to its filing with the SEC or dissemination to the Company's  stockholders
and the Company shall not mail any Company Proxy Statement,  or any amendment or
supplement  thereto,  to which Parent reasonably  objects.  Unless and until the
Board of Directors of the Company shall withdraw its approval or  recommendation
of this  Agreement  or the  Merger if and to the  extent  permitted  by,  and in
accordance with,  Section 6.05 hereof,  the Company shall include in the Company
Proxy  Statement the  recommendation  set forth in Section 3.19 hereof and shall
use  commercially  reasonable  efforts to solicit  from  holders of Common Stock
proxies  in favor of the Merger and this  Agreement  and take all other  actions
reasonably  necessary  or, in the  reasonable  opinion of Parent,  advisable  to
secure  the  approval  of  stockholders  required  by the  DGCL,  the  Company's
Certificate of  Incorporation  and By-Laws and any other applicable Law in order
to effect the Merger.

      SECTION  6.02.  Company  Stockholders'  Meeting.  The  Company  shall,  in
accordance with applicable Law and its Organizational Documents (as in effect on
the date of this  Agreement),  duly call,  give  notice of,  convene  and hold a
special meeting of its stockholders  (the "Company  Stockholders'  Meeting") for
the purpose of  considering  and voting upon  approval  of this  Agreement,  the
Merger and related matters as promptly as practicable after the date hereof. The
Company  shall,  through  its Board of  Directors,  recommend  (and  continue to
recommend) to its stockholders their approval and adoption of this Agreement and
approval of the Merger,  unless and until the Board of  Directors of the Company
shall withdraw its approval or recommendation of this Agreement or the Merger if
and to the extent permitted by, and in accordance with, Section 6.05 hereof. The
obligations of the Company  contained in the first sentence of this Section 6.02
shall  apply and  remain in full  force and effect  regardless  of  whether  the
Company shall have withdrawn its approval or recommendation of this Agreement or
the Merger or taken any other actions described in Section 6.05 hereof.

      SECTION 6.03. Appropriate Action; Consents; Filings.

      (a) The  Company  and  Parent  shall  use  their  respective  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

                                       32
<PAGE>

make  effective  the Merger and the other  transactions  contemplated  hereby as
promptly  as  practicable;  (ii)  obtain in a timely  manner  from  Governmental
Authorities any consents, licenses, permits, waivers, approvals,  authorizations
or orders  required  to be  obtained  or made by Parent or the Company or any of
their respective  subsidiaries in connection with the  authorization,  execution
and delivery of this Agreement and the  consummation of the Merger and the other
transactions  contemplated hereby; and (iii) as promptly as practicable make all
necessary  filings,  and thereafter  make any other required  submissions,  with
respect to this  Agreement,  the Merger or the other  transactions  contemplated
hereby that are required  under (A) the Exchange  Act, and any other  applicable
federal or state securities  Laws, (B) the HSR Act and any related  governmental
request(s)  thereunder,  and (C) any other applicable Law;  provided that Parent
and the Company shall cooperate with each other in connection with the making of
all such  filings,  including  providing  copies  of all such  documents  to the
non-filing  party and its advisors prior to filing and, if requested,  to accept
all  reasonable   additions,   deletions  or  changes  suggested  in  connection
therewith.  Each of the  Company  and  Parent  shall  furnish  to each other all
information  required  from it for any  application  or other  filing to be made
pursuant  to any  applicable  Law  (including  all  information  required  to be
included in the Company Proxy  Statement) in  connection  with the  transactions
contemplated by this Agreement.

      (b)  Without  limiting  the  generality  of its  undertakings  pursuant to
Section  6.03(a)  hereof,  each  party  hereto  shall  (i) use its  commercially
reasonable  efforts  to  prevent  the entry,  in a  judicial  or  administrative
proceeding  brought under any antitrust Law by any  Governmental  Authority with
jurisdiction  over  enforcement  of any  applicable  antitrust Laws or any other
party of any permanent or preliminary  injunction or other order that would make
consummation  of the  Merger or any  other  transaction  contemplated  hereby in
accordance  with the terms of this Agreement  unlawful or would prevent or delay
it and (ii) take  promptly,  in the event that such an  injunction  or order has
been issued in such a proceeding,  all steps necessary to take an appeal of such
injunction  or order;  provided,  however,  that  Parent and Merger  Subsidiary,
together, shall not be required to undertake more than one such appeal.

      (c)  Notwithstanding  anything  to the  contrary in this  Section  6.03 or
elsewhere in this  Agreement,  the parties agree that, in response to any action
taken or threatened to be taken by any court or Governmental  Authority,  Parent
shall not be required to (i) take any action or agree to the  imposition  of any
order  that  would  compel  Parent or the  Company  (or any of their  respective
subsidiaries)  to sell,  license or  otherwise  dispose  of,  hold  separate  or
otherwise divest itself of any portion of its respective business, operations or
assets in order to consummate the Merger or any other  transaction  contemplated
hereby or (ii) impose any  limitation(s)  on Parent's  ability to own or operate
the business and operations of the Company and its Subsidiaries.

      (d) Each of  Parent  and the  Company  shall  give  (or  shall  cause  its
respective  subsidiaries to give) any notices to applicable  third parties,  and
use, and cause its respective subsidiaries to use, their commercially reasonable
efforts  to obtain  any  third  party  consents  or  waivers,  (A)  required  in
connection with the transactions  contemplated in this Agreement,

                                       33
<PAGE>

(B)  disclosed or required to be  disclosed  in Schedule  3.05(a) of the Company
Disclosure Schedule or Schedule 4.04(a) of the Parent Disclosure Schedule or (C)
required to prevent a Company Material Adverse Effect from occurring prior to or
after the Effective  Time or a Parent  Material  Adverse  Effect from  occurring
after the Effective Time; provided,  however,  that, without the written consent
of Parent, the Company and its Subsidiaries shall not incur fees and expenses in
excess of $10,000.00  in the aggregate in order to obtain,  and/or in seeking to
obtain, any such third party consents or waivers.

      (e)  From the  date of this  Agreement  until  the  Effective  Time or the
earlier  termination  of this  Agreement  pursuant to Article VIII hereof,  each
party  shall  promptly  notify  the other  party in  writing  of any  pending or
threatened action,  proceeding or investigation by any Governmental Authority or
any other  person known to it (i)  challenging  or seeking  material  damages in
connection with the Merger or any other transaction contemplated hereby; or (ii)
seeking to delay,  restrain or prohibit  the  consummation  of the Merger or any
other transaction  contemplated hereby or otherwise limit the right of Parent or
Parent's  subsidiaries to own or operate all or any portion of the businesses or
assets of the  Company or its  Subsidiaries,  which in either  case would  have,
individually or in the aggregate,  a Company Material Adverse Effect prior to or
after  the  Effective  Time,  or a Parent  Material  Adverse  Effect  after  the
Effective Time.

      SECTION 6.04. Access to Information; Confidentiality.

      (a)  From  the date  hereof  to the  earlier  of the  termination  of this
Agreement  pursuant  to  Article  VIII  hereof  and  the  Effective  Time,  upon
reasonable  notice and  subject to  restrictions  contained  in  confidentiality
agreements  to which the Company is subject  (from  which the Company  shall use
reasonable efforts to be released),  the Company will provide to Parent (and its
representatives)  full access to all  information and documents which Parent may
reasonably  request  regarding  the  financial  condition,   business,   assets,
liabilities,  employees and other aspects of the Company, other than information
and documents that in the opinion of the Company's  counsel may not be disclosed
under  applicable  Law.  Parent  shall  keep such  information  confidential  in
accordance  with  the  terms  of  the  Confidentiality   and   Non-Circumvention
Agreement,  effective  as of May 12,  2004  (the  "Confidentiality  Agreement"),
between Parent and the Company.  The  Confidentiality  Agreement shall remain in
full force and effect.

      (b) No  investigation  pursuant  to this  Section  6.04  shall  affect any
representation  or  warranty  in  this  Agreement  of any  party  hereto  or any
condition to the obligations of the parties hereto.

      SECTION  6.05.  No  Solicitation  of Competing  Transactions.  Neither the
Company nor any Subsidiary shall, directly or indirectly,  including through any
officer, director, employee, stockholder,  investment banker, financial advisor,
agent or attorney, initiate, solicit or knowingly encourage (including by way of
furnishing  non-public  information  or  assistance),  or take any other  action
knowingly to facilitate,  any inquiries about or the making of any proposal that
the Company enter into any Competing  Transaction

                                       34
<PAGE>

(as defined  below),  or enter into,  maintain or have  discussions or negotiate
with any person in  furtherance of such inquiries or to obtain or seek to obtain
a  Competing  Transaction,  or agree to,  recommend  or  endorse  any  Competing
Transaction  or withdraw or modify,  or propose  publicly to withdraw or modify,
its  recommendation set forth in Section 3.19 hereof, or authorize or permit any
person to take any such  action,  and the Company  shall  notify  Parent  orally
(within one (1) calendar day) and in writing (as promptly as practicable)  after
receipt by any  officer or  director  of the  Company or any  Subsidiary  or any
investment banker,  financial advisor, agent or attorney retained by the Company
or any  Subsidiary,  of any inquiry  concerning,  or  proposal  for, a Competing
Transaction,  or of any  request  for  non-public  information  relating  to the
Company or any of its Subsidiaries  either in connection with such an inquiry or
proposal or when such request for  non-public  information  could  reasonably be
expected to lead to such a proposal,  provided,  however, that nothing contained
in this Section 6.05 or any other  provision  hereof shall prohibit the Board of
Directors  of the  Company  from (i) at any time  prior to the  Effective  Time,
furnishing  information to, or entering into  discussions or negotiations  with,
any  person  that  makes an  unsolicited,  bona fide  proposal  for a  Competing
Transaction,  if, and only to the extent that, (A) the Board of Directors of the
Company,  after  consultation  with  independent  legal  counsel (who may be the
Company's regularly engaged independent legal counsel), determines in good faith
that  failure to take such action  would  constitute  a breach of the  fiduciary
duties of the Board of  Directors of the Company to the  Company's  stockholders
under applicable Law, and, solely with respect to entering into such discussions
or negotiations, the Board of Directors of the Company determines in good faith,
based on the advice of its financial advisors,  that such Competing  Transaction
is or is reasonably  likely to be more favorable to the Company's  stockholders,
from a  financial  point of view,  than the  Merger  and the other  transactions
contemplated hereby and (B) prior to furnishing such information to, or entering
into discussions or negotiations  with, such person, the Company (x) provides at
least two (2) business days prior written notice to Parent to the effect that it
is furnishing information to, or entering into discussions or negotiations with,
such person and provides in such notice, in reasonable  detail,  the identity of
the person making such proposal and the terms and  conditions of such  proposal,
(y)  provides  Parent with all  information  to be provided to such person which
Parent has not previously  been  provided,  and (z) receives from such person an
executed confidentiality agreement in reasonably customary form and having terms
no less  favorable  to the Company than those  contained in the  Confidentiality
Agreement;  (ii) complying with Rule 14e-2 (and any associated  obligation under
Rule  14D-9)  promulgated  under the  Exchange  Act with regard to a third party
tender or exchange offer, provided,  however, that the Board of Directors of the
Company shall not recommend  acceptance of such tender or exchange offer unless,
the Board of Directors of the Company, after consultation with independent legal
counsel (who may be the Company's  regularly engaged independent legal counsel),
determines  in good faith that  failure to take such action  would  constitute a
breach of the  fiduciary  duties of the Board of Directors of the Company to the
Company's  stockholders under applicable Law; (iii) referring any third party to
this Section  6.05 or making a copy of this Section 6.05  available to any third
party; or (iv) failing to make or withdrawing or modifying its recommendation in
Section 3.19 hereof  following the making of an unsolicited,  bona fide proposal
relating to a Competing  Transaction  if the Board of  Directors of the Company,
after  consultation  with  independent  legal  counsel (who

                                       35
<PAGE>

may be the Company's  regularly engaged independent legal counsel) determines in
good faith that  failure to take such action  would  constitute  a breach of the
fiduciary  duties of the Board of  Directors  of the  Company  to the  Company's
stockholders  under  applicable  Law and the Board of  Directors  of the Company
determines in good faith,  based on the advice of its financial  advisors,  that
such  Competing  Transaction  is reasonably  likely to be more  favorable to the
Company's stockholders,  from a financial point of view, than the Merger and the
other  transactions  contemplated  hereby. The Company agrees not to release any
third party from, or waive any provision of, any  confidentiality  or standstill
agreement  to which the  Company is a party.  For  purposes  of this  Agreement,
"Competing Transaction" shall mean: (i) any merger, consolidation,  liquidation,
share  exchange,   business  combination,   recapitalization  or  other  similar
transaction  involving  the  Company or any  Subsidiary;  (ii) any sale,  lease,
exchange,  mortgage,  pledge,  transfer or other  disposition of fifteen percent
(15%) or more of the  assets of the  Company  and the  Subsidiaries,  taken as a
whole, in a single transaction or series of transactions; (iii) any tender offer
or  exchange  offer for fifteen  (15%) or more of the Shares  (other than by the
Company or any  affiliate  thereof)  or the filing of a  registration  statement
under  the  Securities  Act in  connection  therewith;  (iv) 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
and the rules and regulations  promulgated  thereunder) having been formed which
beneficially owns or has the right to acquire  beneficial  ownership of, fifteen
(15%) or more of the Shares or any other class of capital  stock of the Company;
or (v) 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.  For a Competing
Transaction  to be more  favorable to the Company's  stockholders,  it must be a
bona fide proposal made by a third party to acquire for consideration consisting
solely of cash and/or  equity  securities,  more than fifty percent (50%) of the
voting  power of the  outstanding  Shares or all, or  substantially  all, of the
assets of the Company and for which financing,  to the extent required,  is then
committed,  or which in the good  faith,  reasonable  judgment  of the  Board of
Directors of the Company is capable of being obtained by such third party.

      SECTION 6.06. Directors' and Officers' Indemnification and Insurance.

      (a) No later than thirty (30) days after the Effective Time, Parent shall,
or shall cause the Surviving Corporation to, purchase tail coverage,  covering a
period of six (6) years from the Effective  Time,  under the current  directors'
and officers'  liability  insurance policies  maintained by the Company covering
only those persons  covered under such policies and at coverage levels in effect
as of the date of this Agreement, with respect to acts or omissions occurring on
or prior to the Effective Time.

      (b) From and after the Effective Time, to the fullest extent  permitted by
Law,  Parent shall cause the Surviving  Corporation to indemnify,  hold harmless
and advance expenses to the present and former officers, directors and employees
of the  Company  (the  "Indemnified  Parties")  in respect of acts or  omissions
occurring prior to the Effective Time to the extent provided under the Company's
Organizational  Documents and each indemnification  agreement with the Company's
officers  and  directors  to which the Company

                                       36
<PAGE>

is a party and listed on Schedule 6.06(b) to the Company Disclosure Schedule, in
each case as in effect on the date of this Agreement.

      (c) Parent shall pay all expenses,  including reasonable  attorneys' fees,
that may be incurred by any  Indemnified  Party in enforcing  the  indemnity and
other  obligations  provided  for in this  Section  6.06 to the extent that such
Indemnified  Party  is  finally  determined  by a court  or  other  tribunal  of
competent  jurisdiction  to be entitled to  indemnification  under this  Section
6.06.

      (d) This Section 6.06 shall  survive the  consummation  of the Merger,  is
intended to benefit the Surviving  Corporation and the directors and officers of
the  Company  in  office  immediately  prior  to  the  Effective  Time  and  the
Indemnified Parties (the "Insured Parties"), shall be binding, on all successors
and  assigns  of  the  Surviving  Corporation  and  the  Parent,  and  shall  be
enforceable by the Insured Parties.

      SECTION 6.07.  Notification of Certain Matters. From and after the date of
this  Agreement  until the  Effective  Time or the earlier  termination  of this
Agreement  pursuant to Article  VIII hereof,  each party  hereto shall  promptly
notify the other party hereto of (a) the occurrence,  or  nonoccurrence,  of any
event the occurrence,  or  non-occurrence of which would be likely to cause: (i)
any  representation  or warranty  made in this  Agreement by such party,  or any
information   furnished  in  the  Parent  Disclosure  Schedule  or  the  Company
Disclosure  Schedule by such party, as the case may be, to be inaccurate  either
at the time such  representation  or warranty was made, or such  information  is
furnished,  or at the time of the occurrence or non-occurrence of such event; or
(ii) any failure by such party to comply with or satisfy  any  condition  to the
obligations  of such  party to effect  the  Merger  and the  other  transactions
contemplated by this Agreement,  or (b) the failure of the Company or Parent, as
the case may be, to comply with or satisfy any covenant,  condition or agreement
to be complied with or satisfied by it pursuant to this Agreement which would be
likely to result in any of the  conditions  to the  obligations  of any party to
effect the Merger and the other transactions  contemplated by this Agreement not
to be satisfied;  provided, however, that the delivery of any notice pursuant to
this Section  6.07 shall not be deemed to be an  amendment of this  Agreement or
any  schedule  in the  Parent  Disclosure  Schedule  or the  Company  Disclosure
Schedule  and  shall  not cure any  breach  of any  representation  or  warranty
requiring  disclosure of such matter on the date of this Agreement.  No delivery
of any notice  pursuant to this  Section 6.07 shall limit or affect the remedies
available hereunder to the party receiving such notice.

      SECTION 6.08. Public  Announcements.  Parent and the Company shall consult
with each other before issuing any press release or otherwise  making any public
statement with respect to this Agreement,  the Merger and the other transactions
contemplated  hereby and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by Law or
any listing  agreement  with the Nasdaq  National  Market or any other  national
securities  exchange to which Parent or the Company may be a party.  The parties
have agreed on the text of a joint press release by which Parent and the Company
will announce the execution of this Agreement.

                                       37
<PAGE>

      SECTION 6.09. Stockholder Litigation. The Company shall use its reasonable
best efforts to defend any stockholder  litigation or claims against the Company
and its directors (and/or  officers)  relating to the Merger or any of the other
transactions  contemplated by this Agreement  (including any derivative  claims)
and shall give Parent the opportunity to participate,  at Parent's expense,  in,
and shall actively  cooperate with Parent in, the defense or (subject to Section
5.01(m) hereof) settlement of any such litigation or claims.

      SECTION 6.10. Additional Company SEC Documents; Financial Statements. From
and after the date of this Agreement  until the Effective  Time: (i) the Company
shall timely file all forms,  reports and  documents  required to be filed by it
with the SEC; (ii) each of such forms, reports and documents shall comply in all
material respects with the applicable  requirements of the United States federal
securities Laws; and (iii) each of such forms, reports and documents will not at
the time it is filed contain any untrue  statement of a material fact or omit to
state a material  fact  required to be stated  therein or  necessary in order to
make the statements made therein, in light of the circumstances under which they
are  made,  not  misleading.  Each  of  the  consolidated  financial  statements
(including, in each case, the notes thereto) contained in the SEC forms, reports
and  documents  referred  to in the  previous  sentence  shall  be  prepared  in
accordance with United States generally accepted  accounting  principles applied
on a  consistent  basis  throughout  the  periods  indicated  (except  as may be
indicated  in the notes  thereto)  and each will fairly  present in all material
respects (subject, in the case of unaudited statements,  to normal and recurring
year-end adjustments) the consolidated financial position, results of operations
and cash flows of the Company and its  Subsidiaries  as at the respective  dates
thereof and for the respective periods indicated therein

      SECTION 6.11.  Limitation on Expenses.  The Company shall not incur Actual
Transaction Expenses, other than in connection with litigation, in excess of the
amount set forth on Schedule 3.20 of the Company  Disclosure  Schedule,  without
the prior written consent of Parent.

      SECTION  6.12.  Company  Actions  with  Respect  to  Plans.  Prior  to the
Effective  Time, the Company shall take all actions  necessary or appropriate in
the reasonable opinion of Parent, and permissible under the Company Stock Option
Plans, the related stock option  agreements and applicable law, and as would not
require approval of the Company's stockholders,  to amend each of the 2000 Stock
Option  Plans and the 1994  Stock  Option  Plan (1) to  transfer  all rights and
responsibilities  of the  Company  thereunder  to  Parent,  for the  purpose  of
administering  the  Assumed  Options  and such  other  purposes  as  Parent  may
thereafter,  consistent  with the terms of said  Plans as  amended  from time to
time,  deem  appropriate  from time to time  (including  but not  limited to the
granting of further options and other permissible  awards),  (2) to provide that
further  awards  under said Plans,  if any,  shall only be granted in respect of
Parent Common Stock,  and (3) to adjust any share number appearing in said Plans
on the basis of the Conversion  Ratio.  Prior to the Effective Time, the Company
shall take all actions  necessary or appropriate  in the  reasonable  opinion of
Parent,  and  permissible  under the Company  Employee

                                       38
<PAGE>

Stock Purchase Plan and Company Stock Option Plans,  the related  agreements and
applicable law, and as would not require approval of the Company's stockholders,
to terminate its ESPP,  and each stock option plan of the Company other than the
2000 Stock Option Plans and the 1994 Stock Option Plan.  All such actions  shall
be effective only as of the Effective Time, and then only upon the occurrence of
the Merger.

      SECTION 6.13.  Employment  Agreements,  Etc. Parent and Carmine Napolitano
shall enter into an  Employment  Agreement as of the date of this  Agreement and
attached  hereto  as  Exhibit  6.13(e)-1  and such  Employment  Agreement  shall
automatically  become  effective at the Effective  Time.  Parent and the Company
shall use their respective  commercially  reasonable  efforts to have Parent and
each of Kevin Fitzgerald and Jason LeBeck, Al Lee, Frederick Rastgar,  and James
Wright enter into an  Employment  Agreement  substantially  in the form attached
hereto as Exhibit  6.13(e)-2 on or prior to the  Effective  Date,  and each such
Employment Agreement shall automatically become effective at the Effective Time.
Each of Dan Wilnai and Peretz Tzarnotzki shall have entered into agreements with
the Company as of the date of this  Agreement  and  attached  hereto as Exhibits
6.13(e)-3  and 6.13(e)-4 and the  non-compete  provision of each such  agreement
shall automatically become effective at the Effective Time.

                                   ARTICLE VII

                                   CONDITIONS

      SECTION 7.01.  Conditions to the Obligations of Each Party. The obligation
of each of the Company, Parent and Merger Subsidiary to consummate the Merger is
subject to the satisfaction of each of the following conditions:

      (a) This  Agreement  and the Merger  contemplated  hereby  shall have been
approved and adopted by the requisite  affirmative  vote of the  stockholders of
the  Company  in  accordance  with  the DGCL and the  Company's  Certificate  of
Incorporation and By-Laws; and

      (b) All applicable waiting periods (and any extensions  thereof) under the
HSR Act shall have expired or otherwise  been  terminated and all other required
authorizations,  consents and approvals of any Governmental Authority shall have
been obtained.

      SECTION  7.02.   Conditions  to  the  Obligations  of  Parent  and  Merger
Subsidiary.  The  obligations of Parent and Merger  Subsidiary to consummate the
Merger are subject to the satisfaction of the following further conditions:

      (a) Each of the representations and warranties of the Company set forth in
this Agreement  which is qualified as to  materiality  shall be true and correct
and each such representation and warranty that is not so qualified shall be true
and correct in all material respects,  in each case as of the date hereof and at
and as of the  Effective  Time as if made at and as of such time,  except to the
extent  such  representations  and  warranties  are  specifically

                                       39
<PAGE>

made as of a particular date (in which case such  representations and warranties
shall be true and correct as of such date);

      (b) The Company  shall have  performed  or complied  with in all  material
respects its  covenants  and  obligations  under this  Agreement  required to be
performed or complied with by it at or prior to the Effective Time;

      (c) The Company  shall have  delivered  to Parent and Merger  Subsidiary a
certificate,  dated as of the Effective  Time, to the effect that the conditions
in Sections 7.02(a) and 7.02(b) hereof have been satisfied;

      (d) A Company Material Adverse Effect shall not have occurred;

      (e) the Company  shall have  obtained  the  consents set forth on Schedule
3.05(a) of the Company Disclosure Schedule;

      (f)  Consummation  of the  Merger  shall not be  restrained,  enjoined  or
prohibited by any order,  judgment,  decree,  injunction or ruling of a court of
competent  jurisdiction or any  Governmental  Authority and there shall not have
been any statute,  rule or regulation enacted,  promulgated or deemed applicable
to the Merger by an Governmental  Authority  which prevents  consummation of the
Merger or has the effect of making the Merger illegal or substantially  deprives
Parent of any of the anticipated benefits of the Merger; provided, however, that
with respect to any order, judgment,  decree, injunction or ruling issued at the
behest of any court of competent  jurisdiction  or Governmental  Authority,  the
Parent shall have  performed  its  obligations  under  Sections  6.03(a) and (b)
hereof, subject to the terms of Section 6.03(c) hereof; and

      (g) There shall not have been instituted by any Governmental Authority and
be pending,  or threatened in writing by any Governmental  Authority,  any suit,
action or proceeding (i) seeking to restrain or prohibit the consummation of the
Merger or to substantially  deprive Parent of any of its anticipated benefits of
the Merger,  (ii)  seeking to  prohibit or  materially  limit the  ownership  or
operation by the Company,  Parent or any of their respective subsidiaries of any
material  portion of the  business  or assets of the  Company,  Parent or any of
their respective subsidiaries,  or to compel the Company, Parent or any of their
respective  subsidiaries to dispose of or hold separate any material  portion of
the  business  or  assets  of the  Company,  Parent  or any of their  respective
subsidiaries,  as a result of the  Merger,  (iii)  seeking  to  impose  material
limitations on the ability of Parent or Merger Subsidiary to acquire or hold, or
exercise full rights of ownership of, any shares of capital stock of the Company
or the Surviving  Corporation  or (iv) seeking to prohibit  Parent or any of its
subsidiaries  from effectively  controlling in any material respect the business
or operations of the Company or its Subsidiaries.

      SECTION 7.03. Conditions to the Obligations of the Company. The obligation
of the Company to consummate  the Merger is subject to the  satisfaction  of the
following further conditions:

                                       40
<PAGE>

      (a) Each of the  representations and warranties of the Parent set forth in
this Agreement  which is qualified as to  materiality  shall be true and correct
and each such representation and warranty that is not so qualified shall be true
and correct in all material respects,  in each case as of the date hereof and at
and as of the  Effective  Time as if made at and as of such time,  except to the
extent  such  representations  and  warranties  are  specifically  made  as of a
particular date (in which case such representations and warranties shall be true
and correct as of such date);

      (b) Parent and Merger  Subsidiary shall have performed or complied with in
all  material  respects  all  of  their  respective  covenants  and  obligations
hereunder  required to be performed or complied  with by them at or prior to the
Effective Time;

      (c) Parent and Merger  Subsidiary  shall have  delivered  to the Company a
certificate,  dated as of the Effective  Time, to the effect that the conditions
in Sections 7.03(a) and 7.03(b) hereof have been satisfied; and

      (d)  Consummation  of the  Merger  shall not be  restrained,  enjoined  or
prohibited by any order,  judgment,  decree,  injunction or ruling of a court of
competent  jurisdiction or any  Governmental  Authority and there shall not have
been any statute,  rule or regulation enacted,  promulgated or deemed applicable
to the Merger by an Governmental  Authority  which prevents  consummation of the
Merger or has the effect of making the Merger illegal;  provided,  however, that
with respect to any order, judgment,  decree, injunction or ruling issued at the
behest of any court of competent  jurisdiction  or Governmental  Authority,  the
Company shall have  performed its  obligations  under  Sections  6.03(a) and (b)
hereof, subject to the terms of Section 6.03(c) hereof.

                                  ARTICLE VIII

                        TERMINATION, AMENDMENT AND WAIVER

      SECTION 8.01. Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective  Time,  notwithstanding  any
requisite   approval  and  adoption  of  this  Agreement  and  the  transactions
contemplated hereby by the stockholders of the Company:

      (a) by mutual written  consent duly  authorized by the Boards of Directors
of each of Parent, Merger Subsidiary and the Company; or

      (b) by  Parent,  Merger  Subsidiary  or the  Company  if  either  (i)  the
Effective  Time shall not have  occurred  on or before  December  31,  2004 (the
"Termination  Date");  provided,  however,  that  the  right to  terminate  this
Agreement  under this  Section  8.01(b)(i)  shall not be  available to any party
whose failure to fulfill any of its  obligations  under this  Agreement has been
the  cause of the  failure  of the  Effective  Time to occur on or  before  such
Termination  Date and such failure  constitutes a breach of this Agreement;  and
provided,  further,  that, if a

                                       41
<PAGE>

Request for Additional  Information  is received from a  Governmental  Authority
pursuant to the HSR Act, such  Termination Date shall be extended up to the 90th
day following  acknowledgment by such Governmental Authority that Parent and the
Company have complied  with such Request,  but in any event not later than March
31, 2005; or (ii) there shall be any Law that makes  consummation  of the Merger
illegal or otherwise  prohibited  or if any court of competent  jurisdiction  or
other  Governmental  Authority  shall have  issued an order,  judgment,  decree,
ruling, injunction or taken any other action restraining, enjoining or otherwise
prohibiting  or  materially  altering  the terms of the Merger  and such  order,
judgment, decree, ruling, injunction or other action shall have become final and
nonappealable (any such order, judgment,  decree,  ruling,  injunction or action
shall be deemed  final and  nonappealable  if  Parent  or Merger  Subsidiary  is
exercising its right to terminate  under this Section  8.01(b)(ii) and Parent or
Merger  Subsidiary  has  unsuccessfully  appealed  the same on at least  one (1)
occasion),  except  that  no  party  may  terminate  pursuant  to  this  Section
8.01(b)(ii)  unless such party shall have  complied with its  obligations  under
Section 6.03(a) and (b) hereof,  subject to the terms of Section 6.03(c) hereof,
and Section 6.10 hereof, as applicable; or

      (c) by  Parent,  if (i)  the  Company's  Board  of  Directors  shall  have
withdrawn,  modified,  or changed its approval or  recommendation  in respect of
this  Agreement or the Merger in a manner  adverse to the Merger,  or adverse to
Parent or Merger  Subsidiary,  (ii) the Company's  Board of Directors shall have
approved or recommended any Competing Transaction,  (iii) the Company shall have
violated or breached any of its  obligations  under  Section 6.05 hereof or (iv)
the Board of  Directors  of the Company  shall have  resolved to take any of the
foregoing actions; or

      (d) by the Company,  if the Board of  Directors of the Company,  after its
compliance  with  its  obligations   under  Section  6.05  hereof,   shall  have
recommended  or  resolved  to  recommend  to the  stockholders  of the Company a
proposal for a Competing  Transaction  in  accordance  with Section 6.05 hereof;
provided, that any termination of this Agreement by the Company pursuant to this
Section  8.01(d)  shall  not be  effective  unless  and  until  (A) the Board of
Directors  of the  Company has  provided  Parent  with  written  notice that the
Company  intends to enter into a binding  written  agreement  in respect of such
Competing  Transaction,  (B) the Company  shall have  attached  thereto the most
current,  written  version of such  Competing  Transaction,  (C) Parent does not
make,  within two (2)  business  days after  receipt  of the  Company's  written
notice, a written offer (which,  upon execution by the Company,  will constitute
an agreement  between Parent and the Company) that the Board of Directors of the
Company  (which  shall be  obligated  to timely  review  in good  faith any such
revised or new offer) shall have  determined  in good faith (after  consultation
with its  aforementioned  outside legal and  financial  advisors) is at least as
favorable to the stockholders of the Company, from a financial point of view, as
such  Competing  Transaction  and (D) the Company  has made  payment of the full
Termination Fee required by Section 8.03(a) hereof as a condition to its ability
to terminate  under this  subsection (d);  provided,  further,  that the parties
hereto acknowledge and agree that,  notwithstanding  any other provision of this
Agreement, a Competing Transaction may not be deemed to be more favorable to the
Company's  stockholders  unless it is a bona fide proposal made by a third

                                       42
<PAGE>

party to acquire,  for  consideration  consisting  solely of cash and/or  equity
securities, more than fifty (50%) percent of the voting power of the outstanding
Shares or all, or substantially  all, of the assets of the Company and for which
financing, to the extent required, is then committed or which in the good faith,
reasonable  judgment of the Board of  Directors  of the  Company,  is capable of
being obtained by such third party; or

      (e) By Parent,  (i) if the  Company  shall  have  failed to perform in any
material respect any of its covenants or agreements  contained in this Agreement
or (ii) if any of the representations and warranties of the Company set forth in
this Agreement  shall fail to be true and correct  (without giving effect to any
materiality  qualifications  or references to Company  Material  Adverse  Effect
contained in any specific representation or warranty) as if such representations
and  warranties  were made at the time of any such  determination  except to the
extent any such  representation  and warranty  speaks as of a specific  date (in
which case as of such date),  except for any such  failures or breaches  that do
not have,  individually or in the aggregate,  a Company Material Adverse Effect;
provided,  that such  failure or breach is  incapable  of being cured or has not
been cured within twenty (20) calendar days after written  notice from Parent to
the Company of such failure or breach; and provided,  further, that the right to
terminate  this  Agreement  by Parent under this  Section  8.01(e)  shall not be
available  to Parent  where  Parent is at that time in  material  breach of this
Agreement; or

      (f) By the Company,  if Parent or Merger Subsidiary shall have breached or
failed  to  perform  in  any  material  respect  any  of  its   representations,
warranties, covenants or agreements contained in this Agreement, which breach or
failure to perform is  incapable  of being cured or, with respect to a breach or
failure that is curable,  has not been cured  within  twenty (20) days after the
giving of written  notice  thereof by the  Company  to Parent or  Purchaser,  as
applicable,  except in any case under this  subsection  (f) for such breaches or
failures  which are not reasonably  likely to have a material  adverse effect on
Parent's or Merger Subsidiary's ability to complete the Merger;  provided,  that
the right to terminate this Agreement by the Company under this Section  8.01(f)
shall not be  available  to the  Company  where the  Company  is at that time in
material breach of this Agreement.

      SECTION 8.02.  Effects of Termination.  Except as provided in Section 9.01
hereof  and  Section  6.04  hereof,  in the  event  of the  termination  of this
Agreement pursuant to Section 8.01 hereof, this Agreement shall forthwith become
void,  there shall be no liability  under this  Agreement on the part of Parent,
Merger  Subsidiary  or the  Company  or  any of  their  respective  officers  or
directors  and all rights  and  obligations  of any party  hereto  shall  cease,
subject to the sole and  exclusive  remedies of the parties set forth in Section
8.03 hereof. The payment of any termination fee under Section 8.03 hereof by the
Company shall  constitute  liquidated  damages in  consideration of the time and
opportunity  and related costs of Parent and Merger  Subsidiary and upon receipt
of such  termination  fee  Parent and  Merger  Subsidiary  shall have no further
recourse in law or equity against the Company.

                                       43
<PAGE>

      SECTION 8.03. Fees and Expenses.

      (a) The Company shall pay Parent a cash fee of $4,500,000.00 plus Expenses
(as  hereinafter  defined) upon the  termination of this  Agreement  pursuant to
Sections  8.01(c) or 8.01(d)  hereof.  In the event that Parent  terminates this
Agreement pursuant to Section 8.01(e) hereof, the Company shall pay the Expenses
of Parent in accordance  with Section  8.03(d)  hereof and (ii) in the event the
Company  enters  into  a  definitive  agreement  with  respect  to  a  Competing
Transaction  or  consummates  a  Competing   Transaction  (provided  that  if  a
transaction is a Competing  Transaction by reason of subparts (iii), (iv) or (v)
of the definition thereof,  and, with respect to subpart (v), only to the extent
of an announcement of a transaction referred to in such (iii) or (iv), that such
Competing  Transaction  has been  authorized,  recommended,  or  approved by the
Company's  Board of  Directors)  within  six (6)  months  after the date of such
termination, a cash fee of $4,500,000.00.

      (b) In the event that the Company  terminates  this Agreement  pursuant to
Section  8.01(f)  hereof,  Parent  shall  pay the  Expenses  of the  Company  in
accordance with Section 8.03(d).  In the event that this Agreement is terminated
pursuant to Section  8.01(f) and any person or "group"  shall have made an offer
for a Parent  Competing  Transaction  (as defined  below),  Parent shall pay the
Company a fee of  $4,500,000.00  plus Expenses  within five (5) business days of
the  consummation of a Parent  Competing  Transaction that occurs within six (6)
months of such  termination.  For  purposes  of this  Section  8.03(b),  "Parent
Competing Transaction" shall mean: (i) any merger,  consolidation,  liquidation,
share  exchange,   business  combination,   recapitalization  or  other  similar
transaction involving Parent; (ii) any sale, lease, exchange,  mortgage, pledge,
transfer or other  disposition of fifteen percent (15%) or more of the assets of
Parent and its subsidiaries, taken as a whole, in a single transaction or series
of  transactions;  (iii) any tender offer or exchange offer for fifteen (15%) or
more of the  outstanding  capital  stock of Parent  (other than by Parent or any
affiliate  thereof)  or  the  filing  of  a  registration  statement  under  the
Securities  Act in  connection  therewith;  or (iv) any person  having  acquired
beneficial  ownership or the right to acquire  beneficial  ownership  of, or any
"group" having been formed which  beneficially  owns or has the right to acquire
beneficial  ownership of, fifteen (15%) or more of any class of capital stock of
the Company. In the event that the Company terminates this Agreement pursuant to
Section  8.01(f)  as a  result  of  Parent's  failure  to  obtain  the  funds to
consummate  the Merger  (except for any such failure  arising as a result of (a)
any change in the market  price or trading  volume of  Parent's  stock after the
date hereof; (b) any adverse change, effect, event,  occurrence,  state of facts
or development to the extent attributable to the announcement or pendency of the
Merger  (including  any  cancellation  of or  delays  in  customer  orders,  any
reduction in sales, any disruption in supplier, distributor,  partner or similar
relationships or any loss of employees);  (c) any adverse change, effect, event,
occurrence,  state of facts or development  attributable to conditions affecting
the industries as a whole in which Parent  participates,  the U.S.  economy as a
whole or the foreign  economies as a whole in any locations  where the Parent or
any of its  subsidiaries  has material  operations or sales;  or (d) any adverse
change, effect, event, occurrence, state of facts or development arising from or
relating to compliance  with the terms of, or the taking of any action  required
by, this Agreement;  or (e) any suit, claim,

                                       44
<PAGE>

action or other proceeding brought by any shareholder, Governmental Authority or
third-party  competitor  of the Company or Parent after the date hereof that (x)
is  brought  or  threatened  against  Parent  or the  Company  or  any of  their
subsidiaries  or any  member of their  Board of  Directors  in  respect  of this
Agreement  or the  transactions  contemplated  hereby  or (y) in the  case  of a
third-party  competitor  is  brought  or  threatened  against  the Parent or the
Company or any of their  subsidiaries  or any member of their Board of Directors
and is  reasonably  likely to have been  brought  with the  intended  purpose or
effect of preventing,  enjoining,  materially  altering or delaying or otherwise
interfering with the transactions contemplated by this Agreement),  Parent shall
pay the Company a fee of  $4,500,000.00  plus Expenses  within five (5) business
days after the date of such termination.

      (c) Notwithstanding any other provision of this Agreement, as used in this
Article 8, "Expenses" means all reasonable and documented out-of-pocket expenses
and  fees  incurred  by a party  prior  to the  termination  of  this  Agreement
(including,  without  limitation,  all fees and  expenses of counsel,  financial
advisors,  accountants,  environmental and other experts and consultants to such
party,  and its affiliates and all commitment  fees and printing and advertising
expenses)  actually  incurred or accrued by either of them or on their behalf in
connection with the Merger or any other  transaction  contemplated  hereby,  and
actually incurred or accrued by any of the foregoing persons and assumed by such
party  or its  affiliates  in  connection  with  the  negotiation,  preparation,
execution, performance and termination of this Agreement, the structuring of the
Merger or any other transaction  contemplated hereby and any agreements relating
thereto.

      (d) Any payment required to be made pursuant to this Section 8.03 shall be
made as promptly as practicable  but not later than five (5) business days after
the final determination by the party entitled to such payment of such amount and
shall be made by wire  transfer  of  immediately  available  funds to an account
designated by the party entitled to such payment.

      (e) Except as  otherwise  provided  in this  Section  8.03,  all costs and
expenses  incurred in connection with this Agreement and the Merger or any other
transaction  contemplated  hereby  shall  be paid by the  party  incurring  such
expenses, whether or not the Merger or any other transaction contemplated hereby
is consummated.

      (f) In the event  that any party  shall  fail to pay the  Termination  Fee
and/or any Expenses when due, the term "Expenses" shall be deemed to include the
costs and expenses actually incurred or accrued by such party and its affiliates
(including, without limitation, fees and expenses of counsel) in connection with
the  collection  under and  enforcement  of this  Section  8.03,  together  with
interest on such unpaid Termination Fee and/or Expenses,  commencing on the date
that such  Termination  Fee and/or such Expenses  became due, at a rate equal to
the rate of interest  publicly  announced by The Bank of New York,  from time to
time, in the City of New York, as such bank's Base Rate plus two percent (2%).

      SECTION  8.04.  Amendment.  This  Agreement  may be amended by the parties
hereto by action taken by or on behalf of their  respective  Boards of Directors
at any time

                                       45
<PAGE>

prior to the Effective Time;  provided,  however,  that,  after the approval and
adoption  of this  Agreement  and the  transactions  contemplated  hereby by the
stockholders of the Company,  if required,  no amendment may be made which would
reduce the Per Share Amount or change the type of consideration  into which each
Share shall be converted upon consummation of the Merger. This Agreement may not
be amended except by an instrument in writing signed by the parties hereto.

      SECTION 8.05.  Waiver.  At any time prior to the Effective Time, any party
hereto may, to the extent  legally  permitted by applicable  Law, (a) extend the
time for the  performance  of any  obligation  or other act of any  other  party
hereto, (b) waive any inaccuracy in the representations and warranties contained
herein or in any document  delivered  pursuant  hereto and (c) waive  compliance
with any agreement or condition  contained herein.  Any such extension or waiver
shall be valid if set forth in an instrument  in writing  signed by the party or
parties to be bound thereby.

                                   ARTICLE IX

                               GENERAL PROVISIONS

      SECTION 9.01. Non-Survival of Representations,  Warranties and Agreements.
The  representations,  warranties  and  agreements  in  this  Agreement  and any
certificate  delivered  pursuant  hereto by any person  shall  terminate  at the
Effective Time or upon the  termination  of this  Agreement  pursuant to Section
8.01  hereof,  as the  case may be,  except  that the  agreements  set  forth in
Articles I and II and Section 6.06 hereof shall  survive the  Effective  Time in
accordance  with  their  respective  terms  and  those  agreements  set forth in
Sections  6.08,  8.02,  8.03  hereof and in this  Article IX shall  survive  the
termination of this Agreement indefinitely.

      SECTION 9.02. Notices. All notices,  requests,  claims,  demands and other
communications  hereunder  shall be in writing  and shall be given (and shall be
deemed to have been duly given upon  receipt) by  delivery in person,  by cable,
facsimile,  telegram  or telex  or by  registered  or  certified  mail  (postage
prepaid,  return receipt  requested) to the respective  parties at the following
addresses  (or at such  other  address  for a party as shall be  specified  in a
notice given in accordance with this Section 9.02):

      if to Parent or Merger Subsidiary:

            Chief Executive Officer
            LeCroy Corporation
            700 Chestnut Ridge Road
            Chestnut Ridge, NY 10977
            Facsimile: (845) 578-5985

                                       46
<PAGE>

      with a copy to:

            Roger D. Feldman, Esq.
            Fish & Richardson P.C.
            225 Franklin Street
            Boston, MA  02110
            Facsimile: (617) 542-8906

      if to the Company:

            Chief Executive Officer
            Computer Access Technology Corporation
            3385 Scott Boulevard
            Santa Clara, CA 95054
            Facsimile:   (408) 727-6622

      with a copy to:

            Richard Scudellari, Esq.
            Morrison & Foerster LLP
            755 Page Mill Road
            Palo Alto, CA  94304-1018
            Facsimile: (650) 494-0792

      SECTION 9.03.  Certain  Definitions.  For purposes of this Agreement,  the
term:

      (a)  "affiliate"  of a specified  person  means a person who,  directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such specified person;

      (b)  "associate"  shall have the meaning  ascribed  thereto under Rule 405
promulgated under the Securities Act;

      (c) "beneficial owner", with respect to any shares of capital stock, means
a person who shall be deemed to be the beneficial owner of such shares (i) which
such person or any of its affiliates or associates  beneficially owns,  directly
or  indirectly;  (ii) which such person or any of its  affiliates  or associates
has,  directly or  indirectly,  (A) the right to acquire  (whether such right is
exercisable immediately or subject only to the passage of time), pursuant to any
agreement,  arrangement or  understanding  or upon the exercise of consideration
rights,  exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding; or (iii) which are
beneficially owned, directly or indirectly,  by any other persons with whom such
person or any of its  affiliates  or  associates  or any  person  with whom such
person or any of its affiliates or associates has any agreement,  arrangement or
understanding for the purpose of acquiring,  holding, voting or disposing of any
such shares;

                                       47
<PAGE>

      (d) "business day" means any day on which the principal offices of the SEC
in Washington,  DC are open to accept filings,  or, in the case of determining a
date  when any  payment  is due,  any day on which  banks  are not  required  or
authorized to close in the City of New York, New York;

      (e)  "control"  (including  the terms  "controlled  by" and "under  common
control with") means the  possession,  directly or  indirectly,  of the power to
direct  or cause the  direction  of the  management  and  policies  of a person,
whether through the ownership of voting securities,  as trustee or executor,  by
contract or credit arrangement or otherwise;

      (f)  "Governmental  Authority" means any United States (federal,  state or
local) or foreign  government,  or  governmental,  regulatory or  administrative
authority, agency, instrumentality or commission;

      (g)  "knowledge of the Company"  means the actual  knowledge of any of the
following  individuals,  after their making reasonable  inquiries of appropriate
persons  within  the  Company:  Dan  Wilnai,   Carmine  J.  Napolitano,   Peretz
Tzarnotzky,  Albert Lee, Kevin Fitzgerald,  Jason LeBeck, Howard Borchew,  James
Wright and Fred Rastgar.

      (h) "person" means a natural  person,  corporation,  partnership,  limited
partnership,  syndicate,  person (including,  without limitation,  a "person" as
defined in Section 13(d)(3) of the Exchange Act), trust, association or entity;

      (i)  "subsidiary" or  "subsidiaries"  of any person means any corporation,
partnership,  joint  venture or other legal entity of which such person  (either
alone or through or  together  with any other  subsidiary),  owns,  directly  or
indirectly, more than 50% of the stock or other equity interests, the holders of
which are generally  entitled to vote for the election of the board of directors
or other governing body of such corporation or other legal entity; and

      (j) "Tax" means any U.S. federal,  state,  local or foreign income,  gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer,  registration,  value added,  excise,  natural  resources,  severance,
stamp, occupation,  premium,  windfall profit,  environmental,  customs, duties,
real property,  personal property, capital stock, intangibles,  social security,
unemployment,  disability,  payroll, license, employee, or other tax or levy, of
any kind whatsoever,  including any interest,  penalties, or additions to tax in
respect of the foregoing.

      SECTION  9.04.  Severability.  If any  term  or  other  provision  of this
Agreement is invalid,  illegal or incapable of being enforced  under  applicable
Law, or public policy,  all other terms and  provisions of this Agreement  shall
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the Merger and the other transactions  contemplated  hereby are 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

                                       48
<PAGE>

effect the  original  intent of the parties as closely as possible in order that
the Merger and the other  transactions  contemplated  hereby be  consummated  as
originally contemplated to the fullest extent possible.

      SECTION 9.05. Entire Agreement; Assignment. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements and  undertakings,  both written and oral, among
the parties,  or any of them,  with respect to the subject matter  hereof.  This
Agreement  shall not be assigned by operation of law or  otherwise,  except that
Parent  and  Merger  Subsidiary  may  assign  all  or any of  their  rights  and
obligations  hereunder  to  any  affiliate  of  Parent  provided  that  no  such
assignment  shall relieve the assigning  party of its  obligations  hereunder if
such assignee does not perform such obligations.

      SECTION 9.06.  Parties in Interest.  This Agreement  shall be binding upon
and inure  solely to the  benefit of the  parties  hereto  and their  respective
successors  and permitted  assigns,  and nothing in this  Agreement,  express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature  whatsoever under or by reason of this Agreement,  other
than  Section  6.06(a)  hereof  (which is  intended to be for the benefit of the
persons covered thereby and may be enforced by such persons).

      SECTION  9.07.  Specific  Performance.   The  parties  hereto  agree  that
irreparable  damage would occur in the event any provision of this Agreement was
not performed in accordance  with the terms hereof and that the parties shall be
entitled to specific  performance of the terms hereof,  in addition to any other
remedy at law or in equity.

      SECTION  9.08.  Governing  Law. This  Agreement  shall be governed by, and
construed in  accordance  with the laws of the State of Delaware  applicable  to
contracts executed in and to be performed in that State,  regardless of the laws
that might  otherwise  govern under  applicable  principles of conflicts of laws
thereof.  All  actions  and  proceedings  arising  out of or  relating  to  this
Agreement  shall be heard and  determined  exclusively  in any state or  federal
court sitting in the City of Wilmington.

      SECTION 9.09. Consent to Jurisdiction.

      (a) EACH OF PARENT,  THE COMPANY AND MERGER SUBSIDIARY HEREBY  IRREVOCABLY
SUBMITS  TO THE  EXCLUSIVE  JURISDICTION  OF THE  STATE  COURTS  OF THE STATE OF
DELAWARE AND TO THE  JURISDICTION  OF THE UNITED STATES  DISTRICT  COURT FOR THE
DISTRICT OF DELAWARE, FOR THE PURPOSE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR  RELATING  TO THIS  AGREEMENT  AND EACH OF  PARENT,  THE  COMPANY  AND MERGER
SUBSIDIARY HEREBY  IRREVOCABLY  AGREES THAT ALL CLAIMS IN RESPECT TO SUCH ACTION
OR PROCEEDING MAY BE HEARD AND  DETERMINED  EXCLUSIVELY IN ANY DELAWARE STATE OR
FEDERAL COURT SITTING IN THE CITY OF WILMINGTON. EACH OF PARENT, THE COMPANY AND
MERGER  SUBSIDIARY HEREBY  IRREVOCABLY  WAIVES ANY OBJECTION THAT SUCH

                                       49
<PAGE>

PARTY  MAY NOW OR  HEREAFTER  HAVE TO THE  LAYING  OF  VENUE IN SUCH  ACTION  OR
PROCEEDING  IN SUCH  FORUM AND ANY  OBJECTION  TO SUCH  FORUM ON THE BASIS OF IT
BEING AN INCONVENIENT  FORUM. EACH OF PARENT,  THE COMPANY AND MERGER SUBSIDIARY
AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER  JURISDICTIONS  BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW.

      (b) EACH OF PARENT, THE COMPANY AND MERGER SUBSIDIARY IRREVOCABLY CONSENTS
TO ANY SERVICE OF A SUMMONS  AND  COMPLAINT  AND ANY OTHER  PROCESS IN ANY OTHER
ACTION  OR  PROCEEDING  RELATING  TO  THE  TRANSACTIONS   CONTEMPLATED  BY  THIS
AGREEMENT,  ON BEHALF OF ITSELF OR ITS  PROPERTY,  BY THE  PERSONAL  DELIVERY OF
COPIES OF SUCH PROCESS TO SUCH PARTY.  NOTHING IN THIS SECTION 9.09 SHALL AFFECT
THE RIGHT OF ANY PARTY TO SERVE LEGAL  PROCESS IN ANY OTHER MANNER  PERMITTED BY
LAW.

      SECTION  9.10.  Headings.  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.

      SECTION 9.11.  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.

                  [Remainder of page intentionally left blank.]

                                       50
<PAGE>

      IN WITNESS WHEREOF,  Parent, Merger Subsidiary and the Company have caused
this  Agreement  to be  executed  as of the date  first  written  above by their
respective executive officers thereunto duly authorized.


                                          LeCroy Corporation

                                          By: /s/ Thomas H. Reslewic
                                              ----------------------------------
                                               Name: Thomas H. Reslewic
                                               Title: President and CEO


                                          COBALT ACQUISITION CORPORATION

                                          By: /s/ Thomas H. Reslewic
                                              ----------------------------------
                                               Name: Thomas H. Reslewic
                                               Title: President


                                          Computer Access Technology Corporation

                                          By: /s/ Carmine Napolitano
                                              ----------------------------------
                                               Name: Carmine Napolitano
                                               Title: President and CEO


                                       51

<PAGE>

         The following schedules and exhibits to the Agreement and Plan of
Merger were omitted from this Exhibit 2.3 pursuant to Item 601(b)(2) of
Regulation S-K. We agree to furnish supplementally to the Securities and
Exchange Commission copies of these omitted schedules and exhibits upon request:

Company Disclosure Schedule
Parent Disclosure Schedule
Exhibit 1.02          Certificate of Merger
Exhibit 1.04          Certificate of Incorporation of the Surviving Corporation
Exhibit 6.13(e)-1     Employment Agreement between Parent and Carmine Napolitano
Exhibit 6.13(e)-2     Form of Employment Agreement between Parent and each of
                      Kevin Fitzgerald, Jason LeBeck, Al Lee, Frederick
                      Rastgar and James Wright
Exhibit 6.13(e)-3     Services Agreement between the Company and Dan Wilnai
Exhibit 6.13(e)-4     Employment Agreement between the Company and
                      Peretz Tzarnotzky















                                       52