ASSETPURCHASE AGREEMENT

byand among

MEDIA100, INC.as Seller

AUTODESK,INC.as Purchaser

and

withrespect to Section 9.5 of

ArticleIX only

COMPUTERSHARE TRUST COMPANY, INC.as Escrow AgentDated as of August 29, 2001

 
| ARTICLE  I DEFINITIONS                                  |
|---------------------------------------------------------|
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|                                                    | SECTION 1.1. | Certain Defined  Terms |   |
|                                                    |   |   |   |
| ARTICLE II PURCHASE  AND SALE                           |
|                                                    |
|                                                    | SECTION 2.1. | Assets to Be Sold |   |
|                                                    | SECTION  2.2. | Assumption  and Exclusion of Liabilities |   |
|                                                    | SECTION  2.3. | Purchase  Price; Allocation of Purchase Price |   |
|                                                    | SECTION  2.4. | Closing |   |
|                                                    | SECTION  2.5. | Closing  Deliveries by Seller |   |
|                                                    | SECTION  2.6. | Closing  Deliveries by Purchaser |   |
|                                                    |   |   |   |
| ARTICLE III REPRESENTATIONS  AND WARRANTEES OF SELLER   |
|                                                    |
|                                                    | SECTION  3.1. | Organization,  Authority and Qualification of Seller |   |
|                                                    | SECTION 3.2. | Subsidiaries |   |
|                                                    | SECTION  3.3. | No  Conflict |   |
|                                                    | SECTION  3.4. | Governmental  Consents and Approvals |   |
|                                                    | SECTION  3.5. | Financial  Information; Books and Records; Financial Reports |   |
|                                                    | SECTION  3.6. | Receivables |   |
|                                                    | SECTION  3.7. | Inventories |   |
|                                                    | SECTION 3.8. | Acquired Assets |   |
|                                                    | SECTION  3.9. | Sales  and Purchase Order Backlog |   |
|                                                    | SECTION  3.10. | Conduct  in the Ordinary Course |   |
|                                                    | SECTION  3.11. | Litigation |   |
|                                                    | SECTION 3.12. | Compliance with  Laws |   |
|                                                    | SECTION  3.13. | Environmental  and Other Permits and Licenses; Related Matters |   |
|                                                    | SECTION 3.14. | Material Contracts |   |
|                                                    | SECTION 3.15. | Intellectual  Property |   |
|                                                    | SECTION 3.16. | Real Property |   |
|                                                    | SECTION  3.17. | Tangible  Personal Property |   |
|                                                    | SECTION  3.18. | Assets |   |
|                                                    | SECTION  3.19. | Customers |   |
|                                                    | SECTION  3.20. | Suppliers |   |
|                                                    | SECTION 3.21. | Employee  Benefit Matters |   |
|                                                    | SECTION 3.22. | Labor Matters |   |
|                                                    | SECTION 3.23. | Key Employees |   |
|                                                    | SECTION 3.24. | Certain Interests |   |
|                                                    | SECTION  3.25. | Taxes |   |
|                                                    | SECTION  3.26. | Insurance |   |
|                                                    | SECTION 3.27. | Full Disclosure |   |
|                                                    | SECTION  3.28. | Brokers |   |
|                                                    | SECTION 3.29. | SEC Documents |   |
|                                                    | SECTION  3.30. | Product  Return Policies, Warranties and Liabilities |   |
|                                                    |   |   |   |
| ARTICLE IV REPRESENTATIONS  AND WARRANTIES OF PURCHASER |
|                                                    |
|                                                    | SECTION  4.1. | Organization  and Authority of Purchaser |   |
|                                                    | SECTION  4.2. | No  Conflict |   |
|                                                    | SECTION  4.3. | Governmental  Consents and Approvals |   |
|                                                    | SECTION  4.4. | Litigation |   |
|                                                    | SECTION  4.5. | Brokers |   |
|                                                    |   |   |   |
| ARTICLE V  ADDITIONAL AGREEMENTS                        |
|                                                    |
|                                                    | SECTION  5.1. | Conduct  of Business Prior to the Closing |   |
|                                                    | SECTION 5.2. | Access to  Information |   |
|                                                    | SECTION 5.3. | Confidentiality |   |
|                                                    | SECTION  5.4. | Regulatory  and Other Authorizations; Notices and Consents |   |
|                                                    | SECTION 5.5. | Notice of  Developments |   |
|                                                    | SECTION 5.6. | OEM Agreements |   |
|                                                    | SECTION  5.7. | No  Solicitation or Negotiation |   |
|                                                    | SECTION  5.8. | Use  and Transfer of Intellectual Property |   |
|                                                    | SECTION 5.9. | Non-Competition |   |
|                                                    | SECTION 5.10. | Excluded  Liabilities |   |
|                                                    | SECTION 5.11. | Bulk Transfer Laws |   |
|                                                    | SECTION 5.12. | Further Action |   |
|                                                    | SECTION 5.13. | Product Returns |   |
|                                                    | SECTION 5.14. | Agreements  Provided |   |
|                                                    | SECTION 5.15. | Sublease Agreement |   |
|                                                    |   |   |   |
| ARTICLE VI  EMPLOYEE MATTERS                            |
|                                                    |
|                                                    | SECTION 6.1. | Offer of  Employment |   |
|                                                    | SECTION 6.2. | Seller’s Obligations |   |
|                                                    | SECTION  6.3. | Certain  Other Employee-Related Costs |   |
|                                                    | SECTION 6.4. | Employee Benefits |   |
|                                                    |   |   |   |
| ARTICLE  VII TAX MATTERS                                |
|                                                    |
|                                                    | SECTION  7.1. | Indemnity |   |
|                                                    | SECTION 7.2. | Returns and  Payments |   |
|                                                    | SECTION  7.3. | Cooperation  and Exchange of Information |   |
|                                                    | SECTION 7.4. | Conveyance Taxes |   |
|                                                    | SECTION 7.5. | Miscellaneous |   |
|                                                    |   |   |   |
| ARTICLE  VIII CONDITIONS TO CLOSING                     |
|                                                    |
|                                                    | SECTION  8.1. | Conditions  to Obligations of Seller |   |
|                                                    | SECTION  8.2. | Conditions  to Obligations of Purchaser |   |
|                                                    |   |   |   |
| ARTICLE  IX INDEMNIFICATION AND ESCROW                  |
|                                                    |
|                                                    | SECTION  9.1. | Survival  of Representations and Warranties |   |
|                                                    | SECTION 9.2. | Indemnification |   |
|                                                    | SECTION  9.3. | Limits  on Indemnification; Disputes |   |
|                                                    | SECTION  9.4. | Tax  Matters |   |
|                                                    | SECTION 9.5. | Escrow  Arrangements |   |
|                                                    | SECTION  9.6. | Exclusivity |   |
|                                                    |   |   |   |
| ARTICLE X  TERMINATION AND WAIVER                       |
|                                                    |
|                                                    | SECTION 10.1. | Termination |   |
|                                                    | SECTION 10.2. | Effect of  Termination |   |
|                                                    | SECTION  10.3. | Waiver |   |
|                                                    |   |   |   |
| ARTICLE  XI MISCELLANEOUS                               |
|                                                    |
|                                                    | SECTION  11.1. | Expenses |   |
|                                                    | SECTION  11.2. | Notices |   |
|                                                    | SECTION 11.3. | Public  Announcements |   |
|                                                    | SECTION  11.4. | Headings |   |
|                                                    | SECTION 11.5. | Severability |   |
|                                                    | SECTION 11.6. | Entire Agreement |   |
|                                                    | SECTION  11.7. | Assignment |   |
|                                                    | SECTION  11.8. | No Third  Party Beneficiaries |   |
|                                                    | SECTION  11.9. | Amendment |   |
|                                                    | SECTION 11.10. | Governing Law |   |
|                                                    | SECTION 11.11. | Counterparts |   |
|                                                    | SECTION 11.12. | Specific  Performance |   |

 

ASSETPURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT, dated as ofAugust 29, 2001 (as hereafter amended, modified or supplemented, this “***Agreement***”), by andamong Media 100, Inc., a corporation organized and existing under the laws ofDelaware (“***Seller***”),Autodesk, Inc., a corporation organized and existing under the laws of Delaware(“***Purchaser***”), and withrespect to Section 9.5 of Article IX only, Computershare TrustCompany, Inc. (the “***Escrow Agent***”).

**W I T N E S S E T H:**

             WHEREAS,Seller is engaged in, among other things, the business described on Exhibit A(the “***Business***”);and

             WHEREAS,Seller desires to sell to Purchaser, and Purchaser desires to purchase fromSeller, the Business, including, without limitation, all right, title andinterest of Seller in and to the property and assets of the Business, and inconnection therewith Purchaser is willing to assume certain liabilities ofSeller relating thereto, all upon the terms and subject to the conditions setforth herein;

             NOW,THEREFORE, in consideration of the premises and the mutual agreements andcovenants hereinafter set forth, and intending to be legally bound hereby,Purchaser and Seller hereby agree as follows:

**ARTICLE I**

**DEFINITIONS**

             SECTION 1.1.                **Certain Defined Terms**. Unless the context otherwise requires, the following terms, when used in thisAgreement, shall have the respective meanings specified below:

                           “***Acquisition Documents***”shall mean this Agreement, the Ancillary Agreements, and any certificate,Financial Statements, report or other document delivered pursuant to thisAgreement or the transactions contemplated hereby.

                           “***Action***” shall meanany claim, action, suit, arbitration, inquiry, proceeding or investigation byor before any Governmental Authority.

                           “***Affiliate***” shallmean, with respect to any specified Person, any other Person that directly, orindirectly through one or more intermediaries, controls, is controlled by, oris under common control with, such specified Person.

                           “***Agreement***” or “***this Agreement***” shallmean this Asset Purchase Agreement, dated as of August 29, 2001, betweenSeller and Purchaser (including the Exhibits hereto and the DisclosureSchedule) and all amendments hereto made in accordance with the provisions ofSection 11.9.

                           “***Ancillary Agreements***”shall mean the Bill of Sale and the Assumption Agreement.

                           “***Assets***” shall havethe meaning specified in Section 2.1(a).

                           “***Assumed Liabilities***”shall have the meaning specified in Section 2.2(a).

                           “***Assumption Agreement***”shall mean the Assumption Agreement to be executed by Purchaser and Seller onthe Closing Date substantially in the form of Exhibit 1.1(a).

                           “***Benefits Liabilities***”shall mean, with respect to any Plan and any termination of the Employees bySeller and any of its Affiliates, any and all claims, debts, liabilities,commitment and obligations, whether fixed, contingent or absolute, matured orunmatured, liquidated or unliquidated, funded or unfunded, accrued orunaccrued, known or unknown, whenever or however arising, including all costsand expenses relating thereto, and including those debts, liabilities andobligations arising under law, rule, regulation, permits, action or proceedingbefore any court or regulatory agency or administrative agency, order orconsent decree or any award of any arbitrator of any kind, and those arisingunder contract, commitment or undertaking; provided, that “BenefitsLiabilities” shall not include any liabilities specifically assumed by thePurchaser pursuant to Article VI.

                           “***Bill of Sale***” shallmean the Bill of Sale and Assignment to be executed by Seller on the ClosingDate substantially in the form of Exhibit 1.1(b).

                           “***Business***” shall havethe meaning specified in the recitals to this Agreement.

                           “***Business Day***” shallmean any day that is not a Saturday, a Sunday or other day on which banks arerequired or authorized by Law to be closed in the United States.

                           “***CERCLA***” shall meanthe Comprehensive Environmental Response, Compensation and Liability Act of1980, as amended through the date hereof.

                           “***CERCLIS***” shall meanthe Comprehensive Environmental Response, Compensation and LiabilityInformation System, as updated through the date hereof.

                           “***Closing***” shall have themeaning specified in Section 2.4.

                           “***Closing Date***” shallhave the meaning specified in Section 2.4.

                           “***COBRA***” shall mean theConsolidated Omnibus Budget Reconciliation Act of 1985, as amended.

                           "***Code***” shall mean theInternal Revenue Code of 1986, as amended through the date hereof.

                           “***Confidentiality Agreement***”shall mean the letter agreement entered into in July 2001 between Sellerand Purchaser.

                           “***Control***” (includingthe terms “***controlled by***”and “***under common control with***”),with respect to the relationship between or among two or more Persons, shallmean the possession, directly or indirectly or as trustee, personalrepresentative or executor, of the power to direct or cause the direction ofthe affairs or management of a Person, whether through the ownership of votingsecurities, as trustee, personal representative or executor, by contract orotherwise, including, without limitation, the ownership, directly orindirectly, of securities having the power to elect a majority of the board ofdirectors or similar body governing the affairs of such Person.

                           “***Controlled Group Affiliate***”shall mean any other person or entity under common control with Seller withinthe meaning of Section 414(b), (c), (m) or (o) of the Code and the regulationsissued thereunder.

                           “***Disclosure Schedule***”shall mean the Disclosure Schedule attached hereto, dated as of the datehereof, and forming a part of this Agreement.

                           “***Employee***” shall meanany current or former employee, retired employee, consultant, officer ordirector of Seller and its Controlled Group Affiliates whose employment orservice is or was in connection with the Business.

                           “***Employee Amounts***”shall have the meaning specified in Section 6.3.

                           “***Employment and Non-CompetitionAgreement***” shall mean the Employment and Non-CompetitionAgreement to be executed by the Key Employees on or prior to the date hereof insubstantially the form of Exhibit 6.1(b).

                           “***Encumbrance***” shallmean any security interest, pledge, mortgage, lien (including, withoutlimitation, environmental and tax liens), charge, encumbrance, adverse claim,preferential arrangement, or restriction of any kind, including, withoutlimitation, any restriction on the use, voting, transfer, receipt of income orother exercise of any attributes of ownership.

                           “***Environment***” shallmean surface waters, groundwaters, soil, subsurface strata and ambient air.

                           “***Environmental Claims***”shall mean any and all administrative, regulatory or judicial actions, suits,demands, demand letters, claims, liens, notices of non-compliance or violation,investigations, proceedings, consent orders or consent agreements relating inany way to any Environmental Law or any Environmental Permit (hereinafter “***Claims***”), including,without limitation, (i) any and all Claims by Governmental Authorities forenforcement, cleanup, removal, response, remedial or other actions or damagespursuant to any applicable Environmental Law and (ii) any and all Claimsby any Person seeking damages, contribution, indemnification, cost recovery, compensationor injunctive relief resulting from Hazardous Materials or arising from allegedinjury or threat of injury to health, safety or the environment.

                           “***Environmental Condition***”shall mean a condition relating to or arising or resulting from a failure to complywith any applicable Environmental Law or Environmental Permit or a Release of aHazardous Material into the Environment.

                           “***Environmental Laws***”shall mean any Law, now or hereafter in effect and as amended, and any judicialor administrative interpretation thereof, including any judicial oradministrative order, consent decree or judgment, relating to the environment,health, safety or Hazardous Materials, including, without limitation, theCERCLA; the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 etseq.; the Hazardous Materials Transportation Act, 49 U.S.C. §§ 6901 etseq.; the Clean Water Act, 33 U.S.C. §§ 1251 et seq.; the ToxicSubstances Control Act, 15 U.S.C. §§ 2601 et seq.; the CleanAir Act, 42 U.S.C. §§ 7401 et seq.; the Safe Drinking WaterAct, 42 U.S.C. §§ 300f et seq.; the Atomic Energy Act,42 U.S.C. §§ 2011 et seq.; the Federal Insecticide, Fungicideand Rodenticide Act, 7 U.S.C. §§ 136 et seq.; and the FederalFood, Drug and Cosmetic Act, 21 U.S. C. §§ 301 et seq.

                           “***Environmental Permits***”shall mean all Permits required under any applicable Environmental Law.

                           “***ERISA***” shall mean theEmployee Retirement Security Act of 1974, as amended.

                           “***Escrow Agent***” shallmean Computershare Trust Company, Inc. or its successor in interest.

                           “***Escrow Amount***” shallhave the meaning specified in Section 9.5(a).

                           “***Escrow Fund***” shallhave the meaning specified in Section 9.5(a).

                           “***Escrow Period***” shallhave the meaning specified in Section 9.5(b).

                           “***Exchange Act***” meansthe Securities Exchange Act of 1934, as amended, or any similar federalstatute, and the rules and regulations of the Securities Exchange Commissionissued under such Act, as they each may, from time to time, be in effect.

                           “***Excluded Assets***”shall have the meaning specified in Section 2.1(b).

                           “***Excluded Liabilities***”shall have the meaning specified in Section 2.2(b).

                           “***Financial Statements***”shall have the meaning specified in Section 3.5.

                           “***Governmental Authority***”shall mean any national, federal, state, municipal or local or othergovernment, governmental, regulatory or administrative authority, agency orcommission or any court, tribunal, or judicial or arbitral body.

                           “***Governmental Order***”shall mean any order, writ, judgment, injunction, decree, stipulation,determination or award entered by or with any Governmental Authority.

                           “***Hazardous Materials***”shall mean (a) petroleum and petroleum products, radioactive materials,asbestos in any form that is or could become friable, urea formaldehyde foaminsulation, transformers or other equipment that contain polychlorinatedbiphenyls, and radon gas, (b) any other chemicals, materials or substancesdefined as or included in the definition of “hazardous substances”, “hazardouswastes”, “hazardous materials”, “extremely hazardous wastes”, “restrictedhazardous wastes”, “toxic substances”, “toxic pollutants”, “contaminants” or“pollutants”, or words of similar import, under any applicable EnvironmentalLaw, and (c) any other chemical, material or substance exposure to whichis regulated by any Governmental Authority.

                           “***HSR Act***” shall meanthe Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and therules and regulations promulgated thereunder.

                           ***Indebtedness***” shallmean, with respect to any Person, (a) all indebtedness of such Person,whether or not contingent, for borrowed money, (b) all obligations of suchPerson for the deferred purchase price of property or services, (c) allobligations of such Person evidenced by notes, bonds, debentures or other similarinstruments, (d) all indebtedness created or arising under any conditionalsale or other title retention agreement with respect to property acquired bysuch Person (even though the rights and remedies of the seller or tender undersuch agreement in the event of default are limited to repossession or sale ofsuch property), (e) all obligations of such Person as lessee under leasesthat have been or should be, in accordance with U.S. GAAP, recorded as capitalleases, (f) all obligations, contingent or otherwise, of such Person underacceptance, letter of credit or similar facilities, (g) all obligations ofsuch Person to purchase, redeem, retire, defease or otherwise acquire for valueany capital stock of such Person or any warrants, rights or options to acquiresuch capital stock, valued, in the case of redeemable preferred stock, at thegreater of its voluntary or involuntary liquidation preference plus accrued andunpaid dividends, (h) all Indebtedness of others referred to inclauses (a) through (f) above guaranteed directly or indirectly in anymanner by such Person, or in effect guaranteed directly or indirectly by suchPerson through an agreement (i) to pay or purchase such Indebtedness or toadvance or supply funds for the payment or purchase of such Indebtedness,(ii) to purchase, sell or lease (as lessee or lessor) property, or topurchase or sell services, primarily for the purpose of enabling the debtor tomake payment of such Indebtedness or to assure the holder of such Indebtednessagainst loss, (iii) to supply funds to or in any other manner invest inthe debtor (including any agreement to pay for property or servicesirrespective of whether such property is received or such services arerendered) or (iv) otherwise to assure a creditor against loss, and (i) allIndebtedness referred to in clauses (a) through (f) above secured by (orfor which the holder of such Indebtedness has an existing right, contingent orotherwise, to be secured by) any Encumbrance on property (including, withoutlimitation, accounts and contract rights) owned by such Person, even thoughsuch Person has not assumed or become liable for the payment of suchIndebtedness.

                           “***Intellectual Property***”shall mean (i) inventions, whether or not patentable, whether or notreduced to practice, and whether or not yet made the subject of a pendingpatent application or applications, (ii) ideas and conceptions ofpotentially patentable subject matter, including, without limitation, anypatent disclosures, whether or not reduced to practice and whether or not yetmade the subject of a pending patent application or applications,(iii) national (including the United States) and multinational statutoryinvention registrations, patents, patent registrations and patent applications(including all reissues, divisions, continuations, continuations-in-p art,extensions and reexaminations) and all rights therein provided by internationaltreaties or conventions and all improvements to the inventions disclosed ineach such registration, patent or application, (iv) trademarks, servicemarks, trade dress, logos, trade names and corporate names, whether or notregistered, including all common law rights, and registrations and applicationsfor registration thereof, including, but not limited to, all marks registeredin the United States Patent and Trademark Office, the Trademark Offices of theStates and Territories of the United States of America, and the TrademarkOffices of other nations throughout the world, and all rights therein providedby international treaties or conventions, (v) copyrights (registered orotherwise) and registrations and applications for registration thereof, and allrights therein provided by international treaties or conventions,(vi) moral rights (including, without limitation, rights of paternity andintegrity), and waivers of such rights by others, (vii) computer software,including, without limitation, source code, operating systems andspecifications, data, data bases, files, documentation and other materialsrelated thereto, data and documentation, (viii) trade secrets andconfidential, technical and business information (including ideas, formulas,compositions, inventions, and conceptions of inventions whether patentable orunpatentable and whether or not reduced to practice), (ix) whether or notconfidential, technology (including know-how and show-how), manufacturing andproduction processes and techniques, research and development information,drawings, specifications, designs, plans, proposals, technical data,copyrightable works, financial, marketing and business data, pricing and costinformation, business and marketing plans and customer and supplier lists andinformation, (x) copies and tangible embodiments of all the foregoing, inwhatever form or medium, (xi) all rights to obtain and rights to apply forpatents, and to register trademarks and copyrights, and (xii) all rightsto sue or recover and retain damages and costs and attorneys’ fees for presentand past infringement of any of the foregoing.

                           “***Inventories***” shallmean all inventory, merchandise, discs, finished goods, works–in–progressand raw materials, packaging, supplies and other personal property related tothe Business, maintained, held or stored by or for Seller on the Closing Dateand any prepaid deposits for any of the same.

                           “***IRS***” shall mean theInternal Revenue Service of the United States.

                           “***Key Employees***” shallmean the current employees of Seller listed on Exhibit 6.1(a) hereto.

                           **“*Knowledge*”**shall mean, with respect to any party hereto, actual or deemed knowledgeof the officers, directors, key employees or legal or financial personnel ofsuch party and such knowledge that would be reasonably imputed to such personupon reasonable inquiry or investigation.

                           “***Law***” shall mean anynational, federal, state, municipal or local or other statute, law, ordinance,regulation, rule, code, order, other requirement or rule of law.

                           “***Leased Real Property***”shall mean the real property leased by Seller as tenant related to theBusiness, together with, to the extent leased by Seller, all buildings andother structures, facilities or improvements currently or hereafter locatedthereon, all fixtures, systems, equipment and items of personal property ofSeller attached or appurtenant thereto, and all easements, licenses, rights andappurtenances relating to the foregoing, in each case, related to the Business.

                           “***Liabilities***” shallmean any and all debts, liabilities and obligations of Seller, whether accruedor fixed, absolute or contingent, matured or unmatured or determined ordeterminable, including, without limitation, those arising under any Law(including, without limitation, any Environmental Law), Action or GovernmentalOrder and those arising under any contract, agreement, arrangement, commitmentor undertaking.

                           “***Licensed Intellectual Property***”shall mean all Intellectual Property related to the Assets or the Businesslicensed or sublicensed by Seller from a third party.

                           “***Loss****or**Losses***” shall have the meaningspecified in Section 9.2(a).

                           “***Material Adverse Effect***”shall mean any circumstance, change in, or effect on, the Business or Sellerthat, individually or in the aggregate with any other circumstances, changesin, or effects on, Seller or the Business (i) is, or could be, materiallyadverse to the business, operations, assets or liabilities (including, withoutlimitation, contingent liabilities), employee relationships, customer orsupplier relationships, prospects, results of operations or the condition(financial or otherwise) of the Business or (ii) could materiallyadversely affect the ability of Purchaser to operate or conduct the Business inthe manner in which it is currently operated or conducted by Seller.

                           “***Material Contracts***”shall have the meaning specified in Section 3.14(a).

                           “***OEM Agreements***” shallhave the meaning specified in Section 5.6.

                           “***Owned Intellectual Property***”shall mean all Intellectual Property related to the Assets or the Business inand to which Seller, or has a right to hold, right, title and interest.

                           “***Owned Real Property***”shall mean the real property owned by Seller related to the Business, togetherwith all buildings and other structures, facilities or improvements currentlyor hereafter located thereon, all fixtures, systems, equipment and items ofpersonal property of Seller attached or appurtenant thereto and all easements,licenses, rights and appurtenances relating to the foregoing.

                           “***Permits***” shall havethe meaning specified in Section 3.13(a).

                           ***Permitted Encumbrances***”shall mean such of the following as to which no enforcement, collection,execution, levy or foreclosure proceeding shall have been commenced:(a) liens for taxes, assessments and governmental charges or levies notyet due and payable; (b) Encumbrances imposed by Law, such asmaterialmen’s, mechanics’, carriers’, workmen’s and repairmen’s liens and othersimilar liens arising in the ordinary course of business securing obligationsthat (i) are not overdue for a period of more than 30 days and(ii) are not in excess of  $5,000in the case of a single property or $50,000 in the aggregate at any time;(c) pledges or deposits to secure obligations under workers’ compensationlaws or similar legislation or to secure public or statutory obligations; and(d) minor survey exceptions, reciprocal easement agreements and othercustomary encumbrances on title to real property that (i) were notincurred in connection with any Indebtedness, (ii) do not render title tothe property encumbered thereby unmarketable and (iii) do not,individually or in the aggregate, materially adversely affect the value of orthe use of such property for its present purposes.

                           “***Person***” shall meanany individual, partnership, firm, corporation, association, trust,unincorporated organization or other entity, as well as any syndicate or groupthat would be deemed to be a person under Section 13(d)(3) of theSecurities Exchange Act of 1934, as amended.

                           “***Plans***” shall mean(i) all employee benefit plans (as defined in Section 3(3) of ERISA)and all bonus, stock option, stock purchase, restricted stock, incentive,stock-related awards, deferred compensation, fringe benefits, retiree medicalor life insurance, supplemental retirement, severance or other benefit plans,programs, policies or arrangements, and all employment, termination, severanceor other contracts or agreements, whether written or unwritten and whetherlegally enforceable or not, to which Seller or any of its Controlled GroupAffiliates is a party, with respect to which Seller or any of its ControlledGroup Affiliates has any obligation or which are maintained, contributed to orsponsored by Seller or any of its Controlled Group Affiliates for the benefitof any current or former employee, retired employee, consultant, officer ordirector of Seller and its Controlled Group Affiliates, (ii) each employeebenefit plan for which Seller or any of its Controlled Group Affiliates couldincur liability under Section 4069 of ERISA in the event such plan hasbeen or were to be terminated, (iii) any plan in respect of which Selleror any of its Controlled Group Affiliates could incur liability underSection 4212(c) of ERISA and (iv) any contracts, arrangements orunderstandings between Seller or any of its Controlled Group Affiliates and anycurrent or former employee, retired employee, consultant, officer or directorof Seller and its Controlled Group Affiliates including, without limitation,any contracts, arrangements or understandings relating to a sale of Seller, theAssets or the Business.

                           “***Purchase Price***” shallhave the meaning specified in Section 2.3.

                           “***Purchase Price Bank Account***”shall mean a bank account in the United States to be designated by Seller in awritten notice to Purchaser at least five Business Days before the Closingwhich, prior to the Closing, shall have a balance of $0.0.

                           “***Purchaser***” shall havethe meaning specified in the recitals to this Agreement.

                           “***Purchaser’s Accountants***”shall mean Ernst & Young LLP, independent accountants of Purchaser.

                           “***Real Property***” shallmean the Leased Real Property and the Owned Real Property.

                           “***Receivables***” shallmean any and all accounts receivable, notes and other amounts receivable fromthird parties, including, without limitation, customers and employees, arisingfrom the conduct of the Business before the Closing Date, whether or not in theordinary course, together with any unpaid financing charges accrued thereon.

                           “***Regulations***” shallmean the Treasury Regulations (including Temporary Regulations) promulgated bythe United States Department of Treasury with respect to the Code or otherfederal tax statutes.

                           “***Release***” shall meandisposing, discharging, injecting, spilling, leaking, leaching, dumping,emitting, escaping, emptying, seeping, placing and the like into or upon anyland or water or air or otherwise entering into the Environment.

                           ***“Return Policies”***shall have the meaning specified in Section 3.30.

                           “***Restricted Period***”shall have the meaning specified in Section 5.9.

                           “***Seller***” shall havethe meaning specified in the recitals to this Agreement.

                           “***Seller SEC Documents***”shall have the meaning specified in Section 3.29.

                           “***Tangible Personal Property***”shall have the meaning specified in Section 3.17(a).

                           “***Tax***” or “***Taxes***” shall mean anyand all taxes, fees, levies, duties, tariffs, imposts, and other charges of anykind (together with any and all interest, penalties, loss, damage, liability,expense, additions to tax and additional amounts or costs incurred or imposedwith respect thereto) imposed by any government or taxing authority, including,without limitation, (i) taxes or other charges on or with respect toincome, franchises, concessions, windfall or other profits, gross receipts,property, sales, use, capital, gains, capital stock or shares, payroll,employment, social security, workers’ compensation, unemployment compensation,or net worth; (ii) taxes or other charges in the nature of excise,withholding, ad valorem, stamp, transfer, value added, or gains taxes;(iii) license, registration and documentation fees; and (iv) customsduties, tariffs, and similar charges.

                           “***Transferred Employee***”shall have the meaning specified in Section 6.1.

                           “***U.S. GAAP***” shall meanUnited States generally accepted accounting principles and practices in effectfrom time to time applied consistently throughout the periods involved.

                           “***USTs***” shall meanunderground storage tanks, as such term is defined in the Resource Conservationand Recovery Act, as amended, and the regulations promulgated thereunder.

                           ***“Warranties”*** shallhave the meaning specified in Section 3.30.

                           “***Withheld Agreements***”shall have the meaning specified in Section 5.14.

**ARTICLE II**

**PURCHASEAND SALE**

             SECTION 2.1.                **Assets to Be Sold**.

                           (a)         On the terms and subject to theconditions of this Agreement, Seller shall, on the CLOSING Date, sell, assign,transfer, convey and deliver to Purchaser or cause to be sold, assigned,transferred, conveyed and delivered to Purchaser, and Purchaser shall purchasefrom Seller, on the Closing Date, all the assets, properties, related goodwilland business of every kind and description and wherever located, whethertangible or intangible, real, personal or mixed, directly or indirectly(including through any of its subsidiaries (the “***Subsidiaries***”)) owned by Seller or towhich it is directly or indirectly (including through the Subsidiaries)entitled and, in any case, belonging to or used or intended to be used in theBusiness, other than the Excluded Assets (the assets to be purchased byPurchaser being referred to as the “***Assets***”), including, without limitation,those Assets listed on Exhibit 2.1(a).

                           (b)        The Assets shall exclude the assetsowned by Seller listed on Exhibit 2.1(b) (the “***Excluded Assets***”).

             SECTION 2.2.                **Assumption and Exclusion ofLiabilities**.

                           (a)         Purchaser shall not assume anyLiabilities of Seller except for those Liabilities which Purchaser expresslyassumes pursuant to this Section 2.2(a). On the terms and subject to the conditions of this Agreement,Purchaser shall, on the Closing Date, assume the Liabilities of Seller as ofthe Closing Date arising out of or relating to the Business, whether accrued orarising before or after the Closing, listed on Exhibit 2.2(a) (the “***Assumed Liabilities***”).

                           (b)        Seller shall retain, and shall beresponsible for paying, performing and discharging when due, and Purchasershall not assume or have any responsibility for, all Liabilities of Seller asof the Closing Date other than the Assumed Liabilities (the “***Excluded Liabilities***”).

             SECTION 2.3.                **Purchase Price; Allocation ofPurchase Price**.

                           (a)         The aggregate purchase price for theAssets and the covenants contained in Section 5.9 shall be $16,000,000, (the “***Purchase Price***”).

                           (b)        The sum of the Purchase Price and theAssumed Liabilities shall be allocated among the Assets as of the Closing Dateas agreed to by the parties in good faith prior thereto.  Any subsequent adjustments to the sum of thePurchase Price and Assumed Liabilities shall be reflected in the allocationhereunder in a manner consistent with Treasury Regulation § 1.1060–IT(f).  For all Tax purposes, Purchaser and Selleragree to report the transactions contemplated in this Agreement in a mannerconsistent with the terms of this Agreement and that none of them will take anyposition inconsistent therewith in any Tax return, in any refund claim, in anylitigation, or otherwise.

             SECTION 2.4.                **Closing**. Subject to the terms and conditions of this Agreement, the sale and purchase ofthe Assets and the assumption of the Assumed Liabilities contemplated by thisAgreement shall take place at a closing (the “*Closing*”) to be held at theoffices of  Wilson SonsiniGoodrich & Rosati, 650 Page Mill Road, Palo Alto, California at2:00 p.m. California time on the later to occur of (i) September 14,2001 or (ii) the fifth Business Day following the later to occur of the(A) expiration or termination of all applicable waiting periods under theHSR Act, if any, and (B) satisfaction or waiver of all other conditions tothe obligations of the parties set forth in Article VIII, or at such otherplace or at such other time or on such other date as Seller and Purchaser maymutually agree upon in writing (the day on which the Closing takes place beingthe “*ClosingDate*”)  The parties shall usebest efforts to ensure that the Closing Date is no later than September 29,2001.

             SECTION 2.5.                **Closing Deliveries by Seller**. At the Closing, Seller shall deliver or cause to be delivered to Purchaser:

                           (a)         the Bill of Sale and such otherinstruments, in form and substance satisfactory to Purchaser, as may berequested by Purchaser to transfer the Assets to Purchaser or evidence suchtransfer on the public records;

                           (b)        an executed counterpart of theAssumption Agreement;

                           (c)         a receipt for the Purchase Price lessthe Escrow Amount; and

                           (d)        the opinions, certificates and otherdocuments required to be delivered pursuant to Section 8.2.

             SECTION 2.6.                **Closing Deliveries by Purchaser**.

                           (a)         At the Closing, Purchaser shall deliverto Seller:

                                        (i)          the Purchase Price less the EscrowAmount by wire transfer in immediately available funds to the Purchase PriceBank Account;

                                        (ii)         an executed counterpart of theAssumption Agreement; and

                                        (iii)        the certificates and other documentsrequired to be delivered pursuant to Section 8.1.

                           (b)        At the Closing, Purchaser shall deliverto the Escrow Agent, in accordance with Section 9.5 hereof, the EscrowAmount by wire transfer in immediately available funds to the accountsdesignated therefor.

**ARTICLE III**

**REPRESENTATIONS ANDWARRANTEES OF SELLER**

             Asan inducement to Purchaser to enter into this Agreement, Seller herebyrepresents and warrants to Purchaser, subject to such exceptions as arespecifically disclosed in the disclosure schedule (referencing the appropriatesection and paragraph numbers) supplied by Seller to Purchaser (the “***Disclosure Schedule***”)and dated as of the date hereof, that on the date hereof and as of the ClosingDate as though made at the Closing Date as follows (it being understood that tothe extent any of the Assets are owned or used, or a portion of the Business isoperated by the Subsidiaries, the representations and warranties contained inthis Article III are made by Seller on behalf of the Subsidiaries, asapplicable):

             SECTION 3.1.                **Organization Authority and Qualification of Seller**.Seller is a corporation duly organized, validly existing and in good standingunder the laws of the State of Delaware and has all necessary corporate powerand authority to enter into this Agreement and the Ancillary Agreements, tocarry out its obligations hereunder and thereunder and to consummate the transactionscontemplated hereby and thereby.  Selleris duly licensed or qualified to do business and is in good standing in eachjurisdiction in which the properties owned or leased by it or the operation ofits business makes such licensing or qualification necessary, except to theextent that the failure to be so licensed or qualified would not adverselyaffect (i) the ability of Seller to carry out its obligations under, andto consummate the transactions contemplated by, this Agreement and the AncillaryAgreements or (ii) the ability of Seller to conduct the Business.  The execution and delivery of this Agreementand the Ancillary Agreements by Seller, the performance by Seller of itsobligations hereunder and thereunder and the consummation by Seller of thetransactions contemplated hereby and thereby have been duly authorized by allrequisite action on the part of Seller and its stockholders.  This Agreement has been, and upon theirexecution the Ancillary Agreements will be, duly executed and delivered bySeller, and (assuming due authorization, execution and delivery by Purchaser)this Agreement constitutes, and upon their execution the Ancillary Agreementswill constitute, legal, valid and binding obligations of Seller enforceableagainst Seller in accordance with their respective terms, except asenforceability may be limited by bankruptcy, insolvency, fraudulent transfer,reorganization, moratorium or other similar laws relating to or affecting therights of creditors generally and by equitable principles, including thoselimiting the availability of specific performance, injunctive relief and otherequitable remedies and those providing for equitable defenses.

             SECTION 3.2.                **Subsidiaries**.There are no corporations, partnerships, joint ventures, associations or otherentities in which Seller owns, of record or beneficially, any direct orindirect equity or other interest or any right (contingent or otherwise) toacquire the same.  Seller is not amember of (nor is any part of the Business conducted through) any partnership,nor is Seller a participant in any joint venture or similar arrangement.

             SECTION 3.3.                **No Conflict**.The execution, delivery and performance of this Agreement and the AncillaryAgreements by Seller do not and will not (a) violate conflict with orresult in the breach of any provision of the charter or by-laws (or similarorganizational documents) of Seller, (b) conflict with or violate (orcause an event which could have a Material Adverse Effect as a result of) anyLaw or Governmental Order applicable to Seller or any of its assets, propertiesor businesses, including, without limitation, the Assets and the Business, or(c) except as set forth in Section 3.3(c) of the Disclosure Schedule,conflict with, result in any breach of, constitute a default (or event whichwith the giving of notice or lapse of time, or both, would become a default)under, require any consent under, or give to others any rights of termination,amendment, acceleration, suspension, revocation or cancellation of, or resultin the creation of any Encumbrance on any of the Assets pursuant to, any note,bond, mortgage or indenture, contract, agreement, lease, sublease, license,permit, franchise or other instrument or arrangement to which Seller is a partyor by which any of such assets or properties is bound or affected.****

             SECTION 3.4.               **Governmental Consents and Approvals**.The execution, delivery and performance of this Agreement and each AncillaryAgreement by Seller does not and will not require any consent, approval,authorization or other order of, action by, filing with or notification to, anyGovernmental Authority other than those that are required to be obtained ormade by Purchaser unilaterally, except (a) as described in Section 3.4 of theDisclosure Schedule and (b) the notification requirements of the HSR Act,if any; and (c) any such consent, approval, authorization or other orderof action by, filing with or notification to, which if not made or obtained,would not reasonably be expected to have a Material Adverse Effect.

             SECTION 3.5.                **Financial Information; Books andRecords****;Financial Reports**.The financial statements included in the Seller’s Form 10-K for the year endedNovember 30, 2000 and Form 10-Q for the three months ended May 31,2001 (the “*FinancialStatements*”) comply in all material respects with the requirementsof the Exchange Act, and such Financial Statements do not contain any untruestatement of a material fact or omit to state a material fact required to bestated therein or necessary in order to make the statements made therein, inlight of the circumstances under which they were made, not misleading, in eachcase with respect to the Assets or the Business.  There are no Liabilities relating to theAssets or the Business other than (i) Liabilities disclosedin Section 3.5 of the Disclosure Schedule or (ii) Liabilitiesproperly reflected on the Financial Statements.  Seller has delivered to Buyer financial information and internalfinancial statements, including without limitation revenue numbers by productline pertaining to the Business through May 31, 2001 derived from theFinancial Statements, and like financial information from June 1, 2001 toJuly 31, 2001 in unaudited form. True and correct copies of such product line financial statements areattached hereto as Exhibit 3.5. All financial information provided was collected in accordance withSeller’s normal business practices in the ordinary operation of the Business,consistently applied, and fairly presents, on an accrual basis, the results ofthe product lines of the Business for the respective time periods.

             SECTION 3.6.                **Receivables**.Section 3.6 of the Disclosure Schedule is an aged list of the Receivablesas of July 31, 2001 for the 15 most significant customers (byrevenue) of the Business.

             SECTION 3.7.                **Inve****ntories**.

                           (a)         Except as set forth in Section 3.7of the Disclosure Schedule, Seller has good and marketable title to theInventories free and clear of all Encumbrances.  The Inventories do not consist of, in any material amount, itemsthat are obsolete or damaged.  TheInventories do not consist of any items held on consignment, except as setforth in Section 3.7 of the Disclosure Schedule.  Seller is not under any obligation or liability with respect toaccepting returns of items of Inventory or merchandise in the possession of itscustomers other than in the ordinary course of the Business consistent withpast practice.  Channel inventories areof a level consistent with past Business practices and no clearance orextraordinary sale of Inventories has been conducted.  Seller has not acquired or committed to acquire or manufactureInventory for sale which is not of a quality and quantity usable in theordinary course of the Business within a reasonable period of time and consistentwith past practice nor has Seller changed the price of any Inventory except for(i) reductions to reflect any reduction in the cost thereof to Seller, (ii)reductions and increases responsive to normal competitive conditions andconsistent with Seller’s past sales practices, (iii) increases to reflect anyincrease in the cost thereof to Seller and (iv) increases and reductions madewith the written consent of Purchaser. Section 3.7 of the Disclosure Schedule contains a complete list ofthe addresses of all warehouses and other facilities in which the Inventoriesare located, and an identification of the Inventories by part number, quantityand value at each location.

                           (b)        The Inventories are in good andmerchantable condition in all material respects, are suitable and usable forthe purposes for which they are intended and are in a condition such that theycan be sold in the ordinary course of the Business consistent with pastpractice.

             SECTION 3.8.                **Acquired Assets**.Except as disclosed in Section 3.8 of the Disclosure Schedule (other thanExcluded Assets), including, without limitation, the benefit of any licenses,leases or other agreements or arrangements, have been acquired forconsideration not less than the fair market value of such asset at the date ofsuch acquisition.

             SECTION 3.9.                **Sales and Purchase Order Backlog**.

                           (a)         Section 3.9(a) of the DisclosureSchedule lists all sales orders related to the Business exceeding $5,000 perorder, which have been accepted by Seller and which were open as of the datehereof.

                           (b)        Section 3.9(b) of the DisclosureSchedule lists all purchase orders related to the Business exceeding $5,000 perorder, which have been issued by Seller and which were open as of August 20,2001, and there have been no material purchase orders (individually or in theaggregate) issued by Seller since such date.

             SECTION 3.10.              **Conduct in the Ordinary Course**.Since November 30, 2000, except as disclosed in Section 3.10 of theDisclosure Schedule, the Business has been conducted in the ordinary course andconsistent with past practice and has not suffered any Material Adverse Effect.

             SECTION 3.11.              **Litigation**.Except as set forth in Section 3.11 of the Disclosure Schedule (which,with respect to each Action disclosed therein, sets forth the parties, natureof the proceeding, date and method commenced, amount of damages or other reliefsought and, if applicable, paid or granted), there are no Actions affecting anyof the Assets or the Business, pending before any Governmental Authority (or,to the Knowledge of Seller, threatened to be brought by or before anyGovernmental Authority).  None of thematters disclosed in Section 3.11 of the Disclosure Schedule has had orcould have a Material Adverse Effect or could affect the legality, validity orenforceability of this Agreement or any Ancillary Agreement or the consummationof the transactions contemplated hereby or thereby.  Except as set forth in Section 3.11 of the DisclosureSchedule, neither Seller nor any of its assets or properties, including,without limitation, the Assets, is subject to any Governmental Order (nor, tothe Knowledge of Seller, are there any such Governmental Orders threatened tobe imposed by any Governmental Authority) which has had or could have aMaterial Adverse Effect.

             SECTION 3.12.              **Compliance with Laws**.

                           (a)         Except as set forth inSection 3.12(a) of the Disclosure Schedule, Seller has conducted andcontinues to conduct the Business in accordance with all Laws and GovernmentalOrders applicable to Seller or any of its properties or assets, including,without limitation, the Assets and the Business, and Seller is not in violationof any such Law or Governmental Order.

                           (b)        Section 3.12(b) of the DisclosureSchedule sets forth a brief description of each Governmental Order applicableto Seller or any of its properties or assets, including, without limitation,the Assets and the Business that relates to the Assets or the Business, and nosuch Governmental Order has had or could have a Material Adverse Effect.

             SECTION 3.13.              **Environmental and Other Permits andLicenses; Related Matters**.

                           (a)         Except as disclosed in Section3.13(a)(i) of the Disclosure Schedule, Seller currently holds all the healthand safety and other permits, licenses, authorizations, certificates,exemptions and approvals of Governmental Authorities, including, withoutlimitation, Environmental Permits, necessary or proper for the current use,occupancy and operation of the Assets and the conduct of the Business, and allsuch Permits and Environmental Permits are in full force and effect(collectively, “***Permits***”).  Section 3.13(a)(ii) of theDisclosure Schedule sets forth those Permits and Environmental Permits theabsence of which would have a Material Adverse Effect.  Except as disclosed in Section 3.13(a)(iii) ofthe Disclosure Schedule, there is no existing practice, action or activity ofSeller and no existing condition of the properties or assets of Seller,including, without limitation, the Assets or the Business, which will give riseto any civil or criminal Liability under, or violate or prevent compliancewith, any health or occupational safety or other applicable EnvironmentalLaw.  Seller has not received any noticefrom any Governmental Authority revoking, canceling, rescinding, materiallymodifying or refusing to renew any Permit or Environmental Permit or providingwritten notice of violations under any Environmental Law.  Except as disclosed in Section 3.13(a)(iv)of the Disclosure Schedule, Seller is in all respects in compliance with thePermits, all applicable and Environmental Permits and the requirements thereof,and with all applicable Environmental Laws. Section 3.13(a)(v) of the Disclosure Schedule identifies all Permits andEnvironmental Permits that are nontransferable or which will require theconsent of any Governmental Authority in order to be transferred to Purchaserin the event of the consummation of the transactions contemplated by thisAgreement.

                           (b)        Except as disclosed in Section 3.13(b)of the Disclosure Schedule, (i) Hazardous Materials have not beengenerated, used, treated, handled or stored on, or transported to or from, orReleased on any Real Property or, to the Knowledge of Seller, any propertyadjoining any Real Property; (ii) Seller has disposed of all wastes,including those wastes containing Hazardous Materials, in compliance with allapplicable Environmental Laws and Environmental Permits; (iii) there areno past, pending or threatened Environmental Claims against Seller, or any RealProperty; (iv) no Real Property or, to the Knowledge of Seller, anyproperty adjoining any Real Property, is listed or proposed for listing on theNational Priorities List under CERCLA or on the CERCLIS or any analogous statelist of sites requiring investigation or cleanup; and (v) Seller has nottransported or arranged for the transportation of any Hazardous Materials toany location that is listed or proposed for listing on the National PrioritiesList under CERCLA or on the CERCLIS or any analogous state list or which is thesubject of any Environmental Claim.

                           (c)         Except as disclosed inSection 3.13(c) of the Disclosure Schedule, there are no circumstanceswith respect to any Real Property or any Asset or the operation of the Businesswhich could reasonably be anticipated (i) to form the basis of anEnvironmental Claim against Seller or any Real Property or Asset or(ii) to cause such Real Property or Asset to be subject to anyrestrictions on ownership, occupancy, use or transferability under anyapplicable Environmental Law.

                           (d)        Except as disclosed inSection 3.13(d) of the Disclosure Schedule, there are not now and neverhave been any USTs located on any Real Property or, to the Knowledge of Seller,on any property adjoining any Real Property.

             SECTION 3.14.              **Material Contracts**.

                           (a)         Section 3.14(a) of the DisclosureSchedule lists each of the following contracts and agreements (including,without limitation, oral and informal arrangements) of Seller related to theAssets or the Business (such contracts and agreements, together with allcontracts, agreements, leases and subleases concerning the management oroperation of any Real Property (including, without limitation, brokeragecontracts) listed or otherwise disclosed in Section 3.16(a) or 3.16(b) ofthe Disclosure Schedule to which Seller is a party and all agreements relatingto Intellectual Property set forth in Section 3.15(a) of the DisclosureSchedule, being “***MaterialContracts***”):

                                        (i)          each contract, agreement, invoice,purchase order and other arrangement, for the purchase of Inventory, spareparts, other materials or personal property with any supplier or for thefurnishing of services to Seller or otherwise related to the Business under theterms of which Seller:  (A) islikely to pay or otherwise give consideration of more than $25,000 individuallyor $50,000 in the aggregate during the fiscal year ended November 30,2001, (B) is likely to pay or otherwise give consideration of more than$25,000 individually or $50,000 in the aggregate over the remaining term ofsuch contract, or (C) cannot be cancelled by Seller without penalty orfurther payment and without more than 30 days’ notice; provided, however, thatwith respect to purchase orders and invoices only, Seller need only disclosesuch documents for the 15 most significant suppliers (by payments) of theBusiness;

                                        (ii)         each contract, agreement, invoice,sales order and other arrangement, for the sale of Inventory or other personalproperty or for the furnishing of services by Seller which: (A) is likely toinvolve consideration of more than $25,000 individually or $50,000 in theaggregate during the fiscal year ended November 30, 2001, (B) is likely toinvolve consideration of more than $50,000 individually or $100,000 in theaggregate over the remaining term of the contract, or (C) cannot becancelled by Seller without penalty or further payment and without more than 30days’ notice; provided, however, that with respect to invoices and sales ordersonly, Seller need only disclose such documents for the 15 most significantcustomers (by revenue) of the Business;

                                        (iii)        all broker, distributor, dealer,manufacturer’s representative, franchise, agency, sales promotion, marketresearch, marketing consulting and advertising contracts and agreements towhich Seller is a party;

                                        (iv)       all management contracts and contractswith independent contractors or consultants (or similar arrangements) to whichSeller is a party and which are not cancelable without penalty or furtherpayment and without more than 30 days’ notice;

                                        (v)        all contracts and agreements relating toIndebtedness of Seller;

                                        (vi)       all contracts and agreements with anyGovernmental Authority to which Seller is a party;

                                        (vii)      all contracts and agreements that limit orpurport to limit the ability of Seller to compete in any line of business orwith any Person or in any geographic area or during any period of time;

                                        (viii)     all contracts and agreements between oramong Seller or any Affiliate of Seller;

                                        (ix)        all contracts and agreements for providingbenefits under any Plan; and

                                        (x)         all other contracts and agreements,whether or not made in the ordinary course of the Business, which are materialto Seller or the conduct of the Business, or the absence of which would have aMaterial Adverse Effect.

For purposes of this Section 3.14and Sections 3.16, 3.17 and 3.18, the term “***lease***” shall include any and all leases,subleases, sale/leaseback agreements or similar arrangements.

                           (b)        Except as disclosed inSection 3.14(b) of the Disclosure Schedule, each Material Contract:(i) is legal, valid and binding on the respective parties thereto and isin full force and effect, (ii) is freely and fully assignable to Purchaserwithout penalty or other adverse consequences and (iii) upon consummationof the transactions contemplated by this Agreement and the AncillaryAgreements, except to the extent that any consents set forth inSection 3.3 of the Disclosure Schedule are not obtained, shall continue infull force and effect without penalty or other adverse consequence.  Seller is not in breach of, or defaultunder, any Material Contract.

                           (c)         Except as disclosed inSection 3.14(c) of the Disclosure Schedule, to Seller’s Knowledge, noother party to any Material Contract is in breach thereof or default thereunder.

                           (d)        Except as disclosed inSection 3.14(d) of the Disclosure Schedule, there is no contract,agreement or other arrangement granting any Person any preferential right topurchase, other than in the ordinary course of the Business consistent withpast practice, any of the Assets.

                           (e)         To the extent that any of the MaterialContracts are oral contracts, Seller has provided written summaries of eachsuch oral contract to Purchaser, and each such summary is accurate and completein all material respects.

             SECTION 3.15.              **Intellectual Property**.

                           (a)         Section 3.15(a)(i) of the DisclosureSchedule sets forth a true and complete list and a brief description of allOwned Intellectual Property, including a complete identification of each patentand patent application and each registration or application for registrationthereof, and Section 3.15(a)(ii) of the Disclosure Schedule sets forth a trueand complete list and a brief description of all Licensed IntellectualProperty, including a description of any license or sublicense thereof.  Except as otherwise described in Section3.15(a)(i) of the Disclosure Schedule, in each case where a registration orpatent or application for registration or patent listed in Section 3.15(a)(i)of the Disclosure Schedule is held by assignment, the assignment has been dulyrecorded with the state or national Trademark Office from which the originalregistration issued or before which the application for registration ispending.  Except as disclosed in Section3.15(a)(iii) of the Disclosure Schedule, the rights of Seller in or to suchOwned Intellectual Property or Licensed Intellectual Property do not conflictwith or infringe on the rights of any other Person; and Seller has not receivedany claim or written notice from any Person to such effect; provided, theforegoing representation is limited to the Company’s Knowledge in the case ofpatent infringement and trademark infringement for those trademarks for whichno registration has been sought by Seller; provided, further, that theforegoing representation is limited to actual knowledge of the officers,directors and key employees of the Business in the case of patent infringementby hardware technology of Digital Origin, Inc. that is not used in the Businessas currently conducted by Seller. Seller further represents that it has not chosen to refrain from usingintellectual property rights acquired from Digital Origin, Inc. because ofconcern that such intellectual property conflicts with or infringes the rightsof any Person.

                           (b)        Except as disclosed in Section3.15(b)(i) of the Disclosure Schedule: (i) all the Owned Intellectual Property is owned by Seller, freeand clear of any Encumbrance and (ii) no Actions have been made or assertedor are pending (nor, to the Knowledge of Seller has any such Action beenthreatened) against Seller either (A) based upon or challenging or seekingto deny or restrict the use by Seller of any of the Owned Intellectual Propertyor (B) alleging that any services provided, or products manufactured orsold by Seller in connection with the Assets or Business are being provided,manufactured or sold in violation of any patents or trademarks, or any otherrights of any Person.  To the Knowledgeof Seller, no Person is using any patents, copyrights, trademarks, servicemarks, trade names, trade secrets or similar property that are confusinglysimilar to the Owned Intellectual Property or that infringe upon the OwnedIntellectual Property or upon the rights of Seller therein.  Except as disclosed in Section 3.15(b)(i) ofthe Disclosure Schedule, Seller has not granted any license or other right toany other Person with respect to the Owned Intellectual Property.  The consummation of the transactionscontemplated by this Agreement will not result in the termination or impairmentof any of the Owned Intellectual Property.

                           (c)         With respect to all LicensedIntellectual Property and Owned Intellectual Property, the registered trademarkprovisions of all nations requiring such registrations have been complied with.

                           (d)        Seller has, or has caused to be,delivered to Purchaser correct and complete copies of all licenses andsublicenses for Licensed Intellectual Property set forth in Section 3.15(a)(ii)of the Disclosure Schedule and any and all ancillary documents pertainingthereto (including, without limitation, all amendments, consents and evidenceof commencement dates and expiration dates). With respect to each of such licenses and sublicenses:

                                        (i)          such license or sublicense, togetherwith all ancillary documents delivered pursuant to the first sentence of thisSection 3.15(d), is legal, valid, binding and enforceable and in fullforce and effect and represents the entire agreement between the respectivelicensor and licensee with respect to the subject matter of such license orsublicense;

                                        (ii)         except as otherwise set forth inSection 3.15(a)(ii) of the Disclosure Schedule, such license orsublicense will not cease to be legal, valid, binding and enforceable and infull force and effect on terms identical to those currently in effect as aresult of the consummation of the transactions contemplated by this Agreementand the Ancillary Agreements, nor will the consummation of the transactionscontemplated by this Agreement and the Ancillary Agreements constitute a breachor default under such license or sublicense or otherwise give the licensor orsublicensor a right to terminate such license or sublicense;

                                        (iii)        except as otherwise disclosed inSection 3.15(a)(ii) of the Disclosure Schedule, with respect to eachsuch license or sublicense: (A) Seller has not received any notice oftermination or cancellation under such license or sublicense and no licensor orsublicensor has any right of termination or cancellation under such license orsublicense except in connection with the default of Seller thereunder,(B) Seller has not received any notice of a breach or default under suchlicense or sublicense, which breach or default has not been cured, and(C) Seller has not granted to any other Person any rights, adverse orotherwise, under such license or sublicense;

                                        (iv)       Neither Seller, nor (to the Knowledge ofSeller) any other party to such license or sublicense, is in breach or defaultin any material respect, and, to the Knowledge of Seller, no event has occurredthat, with notice or lapse of time would constitute such a breach or default orpermit termination, modification or acceleration under such license orsublicense;

                                        (v)        no Actions have been made or asserted orare pending (nor, to the Knowledge of Seller has any such Action beenthreatened) against Seller either (A) based upon or challenging or seekingto deny or restrict the use by Seller of any of the Licensed IntellectualProperty or (B) alleging that any Licensed Intellectual Property is beinglicensed, sublicensed or used in violation of any patents or trademarks, or anyother rights of any Person; and

                                        (vi)       to the Knowledge of Seller, no Person isusing any patents, copyrights, trademarks, service marks, trade names, tradesecrets or similar property that are confusingly similar to the LicensedIntellectual Property or that infringe upon the Licensed Intellectual Propertyor upon the rights of Seller therein.

                           (e)         Except as set forth in Section 3.15(e)of the Disclosure Schedule, Seller is not aware of any reason that wouldprevent any pending applications to register trademarks, service marks or copyrights or any pending patentapplications related to the Business or the Assets from being granted.

                           (f)         Except as disclosed in Section 3.15(f)of the Disclosure Schedule, all rights of Seller in each item of OwnedIntellectual Property or Licensed Intellectual Property are transferable toPurchaser as contemplated by this Agreement and the Ancillary Agreements.  As a result of the transactions contemplatedby this Agreement and the Ancillary Agreements, upon the Closing, Purchasershall own or possess, or own or possess adequate and enforceable licenses,sublicenses or other rights to use, without payment of any extraordinary feerelated to such transfer other than fees disclosed in Section 3.15(f) ofthe Disclosure Schedule, all the Owned Intellectual Property or LicensedIntellectual Property.

                           (g)        The Intellectual Property set forth inSections 3.15(a)(i) and (ii) of the Disclosure Schedule constitutes allthe Intellectual Property used or held or intended to be used by Seller orforming a part of, used, held or intended to be used in, and all suchIntellectual Property necessary in the conduct of, the Business and there areno other items of Intellectual Property related to the Business or the Assets,other than the Excluded Assets.

                           (h)        The statements in this Section 3.15are the only representations or warranties made in this Agreement relating tothe potential infringement by Seller or the Business of the intellectualproperty rights of third parties; other statements in this Agreement (such asownership of property and freedom from encumbrances) shall not be interpretedto be a representation of Seller of non-infringement of the intellectualproperty rights of third parties.

             SECTION 3.16.              **Real****Property**.

                           (a)         There is no Owned Real Property beingused in the Business or included in the Assets.

                           (b)        Section 3.16(b) of the DisclosureSchedule lists: (i) the street address of each parcel of Leased RealProperty, (ii) the identity of the lessor, lessee and current occupant (ifdifferent from lessee) of each such parcel of Leased Real Property,(iii) the term (referencing applicable renewal periods) and rental paymentterms of the leases (and any subleases) pertaining to each such parcel ofLeased Real Property and (iv) the current use of each such parcel ofLeased Real Property.

                           (c)         Except as described in Sections3.16(c)(i) or 3.12(a) of the Disclosure Schedule, there is no material violationof any Law (including, without limitation, any building, planning or zoningLaw) relating to any of the Real Property. Seller is in peaceful and undisturbed possession of each parcel of RealProperty and there are no contractual or legal restrictions that preclude orrestrict the ability to use the premises for the purposes for which they arecurrently being used.  All existingwater, sewer, steam, gas, electricity, telephone and other utilities requiredfor the construction, use, occupancy, operation and maintenance of the RealProperty are adequate for the conduct of the Business as it has been andcurrently is conducted.  There are nomaterial latent defects or material adverse physical conditions affecting theReal Property or any of the facilities, buildings, structures, erections,improvements, fixtures, fixed assets and personality of a permanent natureannexed, affixed or attached to, located on or forming part of the RealProperty.  Except as set forth inSection 3.16(c)(ii) of the Disclosure Schedule, Seller has not leased orsubleased any parcel or any portion of any parcel of Real Property to any otherPerson, nor has Seller assigned its interest under any lease or sublease listedin Section 3.16(b) of the Disclosure Schedule to any third party.

                           (d)        Seller has, or has caused to be,delivered to Purchaser true and complete copies of all leases and subleaseslisted in Section 3.16(b) of the Disclosure Schedule and any and all ancillarydocuments pertaining thereto (including, without limitation, all amendments,consents for alterations and documents recording variations and evidence ofcommencement dates and expiration dates). With respect to each of such leases and subleases:

                                        (i)          such lease or sublease, together withall ancillary documents delivered pursuant to the first sentence of thisSection 3.16(d), is legal, valid, binding and enforceable and in fullforce and effect and represents the entire agreement between the respectivelandlord and tenant with respect to such property;

                                        (ii)         except as otherwise set forth inSection 3.16(d)(ii) of the Disclosure Schedule, such lease orsublease will not cease to be legal, valid, binding and enforceable and in fullforce and effect on terms identical to those currently in effect as a result ofthe consummation of the transactions contemplated by this Agreement and theAncillary Agreements, nor will the consummation of the transactionscontemplated by this Agreement and the Ancillary Agreements constitute a breachor default under such lease or sublease or otherwise give the landlord a rightto terminate such lease or sublease;

                                        (iii)        except as otherwise disclosed inSection 3.16(d)(ii) of the Disclosure Schedule, with respect to eachsuch lease or sublease: (A) Seller has not received any notice oftermination or cancellation under such lease or sublease and no lessor has anyright of termination or cancellation under such lease or sublease except inconnection with the default of Seller thereunder, (B) Seller has notreceived any notice of a breach or default under such lease or sublease, whichbreach or default has not been cured, and (C) Seller has not granted toany other Person any rights, adverse or otherwise, under such lease orsublease; and

                                        (iv)       Neither Seller, nor (to the Knowledge ofSeller) any other party to such lease or sublease, is in breach or default inany material respect, and, to the Knowledge of Seller, no event has occurredthat, with notice or lapse of time would constitute such a breach or default orpermit termination, modification or acceleration under such lease or sublease.

                           (e)         To the Knowledge of Seller, there areno condemnation proceedings or eminent domain proceedings of any kind pendingor, to the Knowledge of Seller, threatened against any of the Real Property.

                           (f)         All the Real Property is occupied undera valid and current certificate of occupancy or similar permit, thetransactions contemplated by this Agreement and the Ancillary Agreement willnot require the issuance of any new or amended certificate of occupancy and, tothe Knowledge of Seller, there are no facts that would prevent the RealProperty from being occupied after the Closing in the same manner asimmediately prior to the Closing.

                           (g)        All improvements on the Real Propertyconstructed by or on behalf of Seller or, to the Knowledge of Seller,constructed by or on behalf of any other Person, were constructed in compliancewith all applicable Laws (including, without limitation, any building, planningor zoning Laws) affecting such Real Property.

                           (h)        The rental set forth in each lease orsublease of the Leased Real Property is the actual rental being paid, and thereare no separate agreements or understandings with respect to the same.

                           (i)          Seller has, and upon the ClosingPurchaser will have, the full right to exercise any renewal options containedin the leases and subleases pertaining to the Leased Real Property on the termsand conditions contained therein and upon due exercise would be entitled toenjoy the use of each Leased Real Property for the full term of such renewaloptions.

             SECTION 3.17.              **Tangible Personal Property**.

                           (a)         Seller has, or has caused to be,delivered to Purchaser true and complete copies of all leases and subleases formachinery, equipment, tools, supplies, furniture, fixtures, personally,vehicles, rolling stock and other tangible personal property leased by Sellerand used or intended to be used in the Business and Seller has listed each suchitem owned by Seller on Section 3.17(a) of the Disclosure Schedule (the “***Tangible Personal Property***”).

                           (b)        Seller has, or has caused to be,delivered to Purchaser true and complete copies of all leases and subleases forTangible Personal Property and any and all material ancillary documentspertaining thereto (including, without limitation, all amendments, consents andevidence of commencement dates and expiration dates).  With respect to each of such leases and subleases:

                                        (i)          such lease or sublease, together withall ancillary documents delivered pursuant to the first sentence of thisSection 3.17(b), is legal, valid, binding and enforceable and in full force andeffect and represents the entire agreement between the respective lessor andlessee with respect to such property;

                                        (ii)         except as set forth in Section 3.17(b)(ii)of the Disclosure Schedule, such lease or sublease will not cease to be legal,valid, binding and enforceable and in full force and effect on terms identicalto those currently in effect as a result of the consummation of thetransactions contemplated by this Agreement and the Ancillary Agreements, norwill the consummation of the transactions contemplated by this Agreement andthe Ancillary Agreements constitute a breach or default under such lease orsublease or otherwise give the lessor a right to terminate such lease orsublease;

                                        (iii)        except as otherwise disclosed inSection 3.17(b)(iii) of the Disclosure Schedule, with respect to eachsuch lease or sublease: (A) Seller has not received any notice oftermination or cancellation under such lease or sublease and no lessor has anyright of termination or cancellation under such lease or sublease except inconnection with the default of Seller thereunder, (B) Seller has notreceived any notice of a breach or default under such lease or sublease, whichbreach or default has not been cured, and (C) Seller has not granted toany other Person any rights, adverse or otherwise, under such lease orsublease; and

                                        (iv)       neither Seller, nor (to the Knowledge ofSeller) any other party to such lease or sublease, is in breach or default inany material respect, and, to the Knowledge of Seller, no event has occurredthat, with notice or lapse of time would constitute such a breach or default orpermit termination, modification or acceleration under such lease or sublease.

             SECTION 3.18.              **Assets**.

                           (a)         Except as disclosed in Section 3.18(a)of the Disclosure Schedule, Seller owns, leases or has the legal right to useall the Assets, including, without limitation, the Owned Intellectual Property,the Licensed Intellectual Property, the Real Property and the Tangible PersonalProperty, used or intended to be used in the conduct of the Business orotherwise owned, leased or used by Seller and, with respect to contract rights,is a party to and enjoys the right to the benefits of all contracts, agreementsand other arrangements used or intended to be used by Seller in or in relatingto the conduct of the Business, all of which properties, assets and rightsconstitute Assets except for the Excluded Assets.  Seller has good and marketable title to, or, in the case ofleased or subleased Assets, valid and subsisting leasehold interests in, allthe Assets, free and clear of all Encumbrances, except (i) as disclosed inSection 3.15, 3.16(a), 3.16(b), 3.17 or 3.18(a) of the DisclosureSchedule; and (ii) Permitted Encumbrances.

                           (b)        Except as set forth in Sections 3.14(b),3.15, 3.16(a), 3.16(b), 3.17, 3.18(a) or 3.18(c) of the Disclosure Schedule,Seller has the complete and unrestricted power and unqualified right to sell,assign, transfer, convey and deliver the Assets to Purchaser without penalty orother adverse consequences.  Followingthe consummation of the transactions contemplated by this Agreement and theAncillary Agreements and the execution of the instruments of transfercontemplated by this Agreement and the Ancillary Agreements, Purchaser willown, with good, valid and marketable title, or lease, under valid andsubsisting leases, or otherwise acquire the interests of Seller in the Assets,free and clear of any Encumbrances, other than Permitted Encumbrances, andwithout incurring any penalty or other adverse consequence, including, withoutlimitation, any increase in rentals, royalties, or license or other feesimposed as a result of, or arising from, the consummation of the transactionscontemplated by this Agreement and the Ancillary Agreements.

             SECTION 3.19.              **Customers**. Listed in Section 3.19(i) of the Disclosure Schedule are the namesand addresses of the fifteen (15) most significant customers (by revenue) of theBusiness which ordered goods or merchandise from Seller during the twelve-monthperiods ended November 30, 1999 and November 30, 2000 and the amount for whicheach such customer was invoiced during such period.  Seller shall have provided a complete customer database relatedto the Business and the Assets.  Exceptas disclosed in Section 3.19(ii) of the Disclosure Schedule, Sellerhas not received any notice and has no reason to believe that any significantcustomer of Seller has ceased, or will cease, to use the products, equipment,goods or services of Seller or has substantially reduced, or will substantiallyreduce, the use of such products, equipment, goods or services at any time.

             SECTION 3.20.              **Suppliers**. Listed in Section 3.20(i) of the Disclosure Schedule are the namesand addresses of the fifteen (15) most significant suppliers (by payments) fromwhich Seller ordered during the twelve-month periods ended November 30, 1999and November 30, 2000 and the amount for which each such supplier invoicedSeller during such period.  Except asdisclosed in Section 3.20(ii) of the Disclosure Schedule, Seller hasnot received any notice that any such supplier will not sell raw materials,supplies, merchandise and other goods to Seller at any time after the ClosingDate.

             SECTION 3.21.              **Employee Benefit Matters**. With respect to any Plan, neither Seller nor any Controlled Group Affiliate hasfailed to make any contribution or pay any amount due as required by applicableLaw (including, without limitation, ERISA and the Code) or under the terms ofany such Plan, each Plan has been administered in accordance with its terms andin material compliance with the requirements prescribed by applicable Law(including, without limitation, ERISA and the Code) and there are no factsexisting which have resulted in, or may reasonably be expected to result in,the imposition of any liability on Seller, any Controlled Group Affiliate orBuyer either under such Plans or under applicable Law (including, withoutlimitation, ERISA and the Code).

             SECTION 3.22.              **Labor Matters**. Except as set forth in Section 3.22 of the Disclosure Schedule,(a) Seller is not a party to any collective bargaining agreement or otherlabor union contract applicable to persons employed by Seller which couldaffect the Business, and currently there are no organizational campaigns,petitions or other unionization activities seeking recognition of a collectivebargaining unit which could affect the Business; (b) there are nocontroversies, strikes, slowdowns or work stoppages pending or, to theKnowledge of Seller, threatened between Seller and any of its employees whichcould affect the Business, and Seller has not experienced any such controversy,strike, slowdown or work stoppage within the past three years; (c) Sellerhas not breached or otherwise failed to comply with the provisions of anycollective bargaining or union contract and there are no grievances outstandingagainst Seller under any such agreement or contract that could have a MaterialAdverse Effect; (d) there are no unfair labor practice complaints pendingagainst Seller before the National Labor Relations Board or any otherGovernmental Authority or any current union representation questions involvingemployees of Seller that could have a Material Adverse Effect; (e) thereis no claim with respect to payment of wages, salary or overtime pay that hasbeen asserted or is now pending or threatened before any Governmental Authoritywith respect to any Transferred Employee; (f) Seller is not a party to, orotherwise bound by, any consent decree with, or citation by, any GovernmentalAuthority relating to Transferred Employees or employment practices;(g) there is no charge or proceeding with respect to a violation of anyoccupational safety or health standards that has been asserted or is nowpending or threatened with respect to Seller; and (h) there is no chargeof discrimination in employment or employment practices, for any reason,including, without limitation, age, gender, race, religion or other legallyprotected category, which has been asserted or is now pending or threatenedbefore the United States Equal Employment Opportunity Commission, or any otherGovernmental Authority in any jurisdiction in which Seller has employed orcurrently employs any Person.

             SECTION 3.23.              **Key Employees**.

                           (a)         Section 3.23(a) of the DisclosureSchedule lists the name, the place of employment, the annual salary rates,bonuses, deferred or contingent compensation, pension, accrued vacation,“golden parachute” and other like benefits paid or payable (in cash orotherwise) in 1998, 1999, 2000 and 2001, the date of employment and adescription of the position and job function of each current Employee of Sellerproviding services to the Business.

                           (b)        All directors, officers, managementemployees and consultants, and technical and professional employees of Sellerare under written obligation to Seller to maintain in confidence allconfidential or proprietary information acquired by them in the course of theiremployment or otherwise and to assign to Seller all inventions made by themwithin the scope of their employment or otherwise during such employment orconsulting relationship and for a reasonable period thereafter.

             SECTION 3.24.              **Certain Interests**.

                           (a)         Except as disclosed in Section 3.24(a)of the Disclosure Schedule and to the extent that any interest described belowrelates to or affects the Assets or the Business, no shareholder, officer ordirector of Seller and no relative or spouse (or relative of such spouse) whoresides with, or is a dependent of, any such shareholder, officer or director:

                                        (i)          has any direct or indirect financialinterest in any competitor, supplier or customer of Seller; *provided, however*, that the ownership ofsecurities representing no more than one percent of the outstanding votingpower of any competitor, supplier or customer, and which are also listed on anynational securities exchange or traded actively in the nationalover-the-counter market, shall not be deemed to be a “***financial interest***”so long as the Person owning such securities has no other connection orrelationship with such competitor, supplier or customer;

                                        (ii)         owns, directly or indirectly, in wholeor in part, or has any other interest in the Assets or in any tangible orintangible property which Seller uses or has used in the conduct of theBusiness or otherwise; or

                                        (iii)        has outstanding any Indebtedness toSeller.

                           (b)        Except as disclosed inSection 3.24(b) of the Disclosure Schedule and to the extent that such obligationrelates to or affects the Assets or the Business, Seller has no Liability orany other obligation of any nature whatsoever to, any officer, director orshareholder of Seller or to any relative or spouse (or relative of such spouse)who resides with, or is a dependent of, any such officer, director orshareholder.

             SECTION 3.25.              **Taxes**.

                           (a)         (i) All returns and reports inrespect of Taxes required to be filed with respect to the Business or theAssets have been timely filed; (ii) all Taxes required to be shown on suchreturns and reports or otherwise due have been timely paid; (iii) all suchreturns and reports are true, correct and complete in all material respects;(iv) no adjustment relating to such returns has been proposed formally orinformally by any Tax authority and, to the Knowledge of Seller, no basisexists for any such adjustment; (v) there are no pending or, to theKnowledge of Seller, threatened Actions for the assessment or collection ofTaxes against Seller relative to the Business or the Assets or (insofar aseither relates to the activities or income of Seller from or relative to theBusiness or the Assets or could result in liability of Seller on the basis ofjoint and/or several liability) any corporation that was includible in thefiling of a return with Seller on a consolidated or combined basis;(vi) no consent under Section 341(f) of the Code has been filed withrespect to Seller; and (vii) there are no Tax liens on any of the Assetsor the Business.

                           (b)        Except as disclosed with reasonablespecificity in Section 3.25(b) of the Disclosure Schedule:  (i) there are no outstanding waivers oragreements extending the statute of limitations for any period with respect toany Tax to which Seller, with respect to the Business or the Assets, may besubject; (ii) there are no requests for information currently outstandingthat could affect the Taxes of Seller with respect to the Business or theAssets; and (iii) there are no proposed reassessments of the Assets ownedby Seller or other proposals that could increase the amount of any Tax to whichSeller would be subject.

             SECTION 3.26.              **Insurance**. Section 3.26 of the Disclosure Schedule lists all insurance policies andfidelity bonds related to the Business or the Assets of the Seller or anyControlled Group Affiliate (including all policy numbers and coverage limits)that are in full force and effect. There is no claim by the Company or any Controlled Group Affiliatepending under any of such policies or bonds as to which coverage has beenquestioned, denied or disputed by the underwriters of such policies or bonds.

             SECTION 3.27.              **Full Disclosure**. No representation or warranty of Seller in this Agreement, nor any statement orcertificate furnished or to be furnished to Purchaser pursuant to thisAgreement, or in connection with the transactions contemplated by thisAgreement, contains or will contain any untrue statement of a material fact, oromits or will omit to state a material fact necessary to make the statementscontained herein or therein not misleading.

             SECTION 3.28.              **Brokers**. No broker, finder or investment banker is entitled to any brokerage, finder’sor other fee or commission in connection with the transactions contemplated bythis Agreement or the Ancillary Agreements based upon arrangements made by oron behalf of Seller.

             SECTION 3.29.              **SEC Documents**. Seller has made available to Purchaser a true and complete copy of Seller’sForm 10-K for the year ended November 30, 2000 and Form 10-Q for the threemonths ended May 31, 2001 and Seller’s definitive proxy statement datedMarch 30, 2001 (the “***Seller SEC Documents***”). As of their respective filing dates, Seller has made all necessary SECfilings, the Seller SEC Documents comply in all material respects with therequirements of the Exchange Act, and non of the Seller SEC Documents containany untrue statement of a material fact or omit to state a material factrequired to be stated therein or necessary in order to make the statements madetherein, in light of the circumstances under which they were made, notmisleading.

             SECTION3.30.              **Product Return Policies, Warrantiesand Liabilities**. Section 3.30 of the Disclosure Schedulesets forth the product return policies(the “Return Policies” of, and all Warranties (as hereinafter defined) given ormade by Seller relating to the Business. “Warranties” shall mean all obligations to service, repair (including,without limitation, to provide fixes to program errors), replace, credit,refund and other obligations based upon or arising out of express and impliedwarranties made or deemed made in connection with the license or sale of goodsor the performance of services by Seller. Seller has not extended or granted any return rights or given or madeany Warranties with respect to any products licensed or sold or servicesperformed by it, except for those set forth in Section 3.30 of the DisclosureSchedule.  To the extent relating to theBusiness, to the Knowledge of Seller, none of the customers of Seller, thedistributors of Seller’s products, or end-users have claimed to Seller or to adistributor of Seller’s products, that Seller’s products are defective.  To the Knowledge of Seller, no productsrelating to the Business have been shipped by Seller in a condition that suchproducts might reasonably be expected to be returned by the customers, nor hasany customer indicated an intention to return any of Seller’s products, exceptreturns made in the ordinary course of the Business and consistent with theReturn Policies.  Except as otherwiseset forth in Section 3.30 of the Disclosure Schedule, Seller has no knowledgeof any fact or of the occurrence of any event which might reasonably form thebasis of any present or future claim against Seller, whether or not fullycovered by insurance, for liability on account of negligence or productliability or on account of any Return Policies or Warranties which would have,individually or in the aggregate, a Material Adverse Effect.

**ARTICLE IV**

**REPRESENTATIONS AND WARRANTIESOF PURCHASER**

             Asan inducement to Seller to enter into this Agreement, Purchaser herebyrepresents and warrants to Seller, subject to such exceptions as arespecifically disclosed to Seller in writing, that on the date hereof and as ofthe Closing Date as though made on the Closing Date as follows:

             SECTION 4.1.                **Organization and Authority ofPurchaser**. Purchaser is a corporation duly organized, validly existing and in goodstanding under the laws of the State of Delaware and has all necessarycorporate power and authority to enter into this Agreement and the AncillaryAgreements, to carry out its obligations hereunder and thereunder and toconsummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreementand the Ancillary Agreements by Purchaser, the performance by Purchaser of itsobligations hereunder and thereunder and the consummation by Purchaser of thetransactions contemplated hereby and thereby have been duly authorized by allrequisite action on the part of Purchaser. This Agreement has been, and upon their execution the AncillaryAgreements will be, duly executed and delivered by Purchaser, and (assuming dueauthorization, execution and delivery by Seller) this Agreement constitutes,and upon their execution the Ancillary Agreements will constitute, legal, validand binding obligations of Purchaser, enforceable against Purchaser inaccordance with their respective terms.

             SECTION 4.2.                **No Conflict**. Assuming compliance with the notification requirements of the HSR Act, if any,and the making and obtaining of all filings, notifications, consents,approvals, authorizations and other actions referred to in Section 4.3,except as may result from any facts or circumstances relating solely to Seller,the execution, delivery and performance of this Agreement and the AncillaryAgreements by Purchaser, do not and will not (a) violate, conflict with orresult in the breach of any provision of the Charter or by-laws (or otherorganizational documents) of Purchaser, (b) conflict with or violate anyLaw or Governmental Order applicable to Purchaser or (c) conflict with, orresult in any breach of, constitute a default (or event which with the givingof notice or lapse of time, or both, would become a default) under, require anyconsent under, or give to others any rights of termination, amendment,acceleration, suspension, revocation or cancellation of, or result in thecreation of any Encumbrance on any of the assets or properties of Purchaserpursuant to, any note, bond, mortgage or indenture, contract, agreement, lease,sublease, license, permit, franchise or other instrument or arrangement towhich Purchaser is a party or by which any of such assets or properties isbound or affected, which would have a material adverse effect on the ability ofPurchaser to consummate the transactions contemplated by this Agreement or bythe Ancillary Agreements.

             SECTION 4.3.                **Governmental Consents and Approvals**. The execution, delivery and performance of this Agreement and each AncillaryAgreement to which it is a party by Purchaser do not and will not require anyconsent, approval, authorization or other order of, action by, filing with, ornotification to, any Governmental Authority other than those that are requiredto be obtained or made by Seller unilaterally, except (a) as described ina writing given to Seller by Purchaser on the date of this Agreement and(b) the notification requirements of the HSR Act, if any.

             SECTION 4.4.                **Litigation**. Except as disclosed in a writing given to Seller by Purchaser on the date ofthis Agreement, no claim, action, proceeding or investigation is pending or, tothe Knowledge of Purchaser, threatened, which seeks to delay or prevent theconsummation of, or which would be reasonably likely to materially adverselyaffect Purchaser’s ability to consummate the transactions contemplated by thisAgreement and the Ancillary Agreements.

             SECTION 4.5.                **Brokers**. No broker, finder or investment banker is entitled to any brokerage, finder’sor other fee or commission in connection with the transactions contemplated bythis Agreement based upon arrangements made by or on behalf of Purchaser.

**ARTICLE V**

**ADDITIONAL AGREEMENTS**

             SECTION 5.1.                **Conduct of Business Prior to theClosing**.

                           (a)         Seller covenants and agrees that,except as described in Section 5.1(a) of the Disclosure Schedule, between thedate hereof and the Closing, Seller shall not conduct the Business other thanin the ordinary course and consistent with Seller’s past practice.  Without limiting the generality of theforegoing, except as described in Section 5.1(a) of the Disclosure Schedule,Seller shall, in each case with respect to the Business or the Assets,(i) continue its advertising and promotional activities, and pricing andpurchasing policies, in accordance with past practice; (ii) not shorten orlengthen the customary payment cycles for any of its payables or receivables;(iii) use its best efforts to (A) preserve intact its businessorganization and the business organization of the Business, (B) keepavailable to Purchaser the services of the employees of Seller,(C) continue in full force and effect without material modification allexisting policies or binders of insurance currently maintained in respect ofSeller and the Business and (D) preserve its current relationships withits customers, suppliers and other persons with which it has significantbusiness relationships; (iv) exercise, but only after notice to Purchaserand receipt of Purchaser’s prior written approval, any rights of renewalpursuant to the terms of any of the leases or subleases set forth in Section3.16(b) of the Disclosure Schedule which by their terms would otherwise expire;and (v) not engage in any practice, take any action, fail to take anyaction or enter into any transaction which could cause any representation orwarranty of Seller to be untrue or result in a breach of any covenant made bySeller in this Agreement.

                           (b)        Except as may be required by Law orunder this Agreement, Seller will refrain, and will cause its Affiliates torefrain, from directly or indirectly (i) making any representation orpromise, oral or written, to any Employee concerning any Plan, except forstatements as to the rights or accrued benefits of any Employee under the termsof any Plan, (ii) making any increase in the salary, wages or othercompensation of any Employee whose annual salary is or, after giving effect tosuch change, would be $100,000 or more, except, in any case under this Section5.1(b), in the ordinary course of business or as Seller or any Affiliate otherwisedeems reasonably necessary to respond to competitive situations,(iii) adopting, entering into or becoming bound by any Plan or anycollective bargaining agreement with respect to the Business or any of theEmployees, or, amending, modifying or terminating (partially or completely) anysuch Plan or collective bargaining agreement, except to the extent required byapplicable Law and, in the event compliance with legal requirements presentsoptions, only to the extent that the option which Seller or the relevantAffiliate reasonably believes to be the least costly is chosen, except, in anycase under this Section 5.1(b), in the ordinary course of business or as Selleror any Affiliate otherwise deems reasonably necessary to respond to competitivesituations, or (iv) establishing or modifying any (A) targets, goals,pools or similar provisions in respect of any fiscal year under any Plan forEmployees or (B) salary ranges, increase guidelines or similar provisionsin respect of any Plan with or for Employees, except, in any case under thisSection 5.1(b), in the ordinary course of business or as Seller or anyAffiliate otherwise deems reasonably necessary to respond to competitivesituations.

             SECTION 5.2.                **Access to Information**.

                           (a)         From the date hereof until the Closing,upon reasonable notice, Seller shall and shall cause each of Seller’s officers,directors, employees, agents, accountants and counsel to: (i) afford theofficers, employees and authorized agents, accountants, counsel, financing sourcesand representatives of Purchaser reasonable access, during normal businesshours, to the offices, properties, plants, other facilities, books and recordsof Seller and to those officers, directors, employees, agents, accountants andcounsel of Seller who have any knowledge relating to Seller or the Business and(ii) furnish to the officers, employees and authorized agents,accountants, counsel, financing sources and representatives of Purchaser suchadditional financial and operating data and other information regarding theBusiness and the assets, properties and goodwill of Seller as Purchaser mayfrom time to time reasonably request.

                           (b)        In order to facilitate the resolution ofany claims made against or incurred by Seller prior to the Closing, for a periodof seven years after the Closing, Purchaser shall (i) retain the books andrecords of Seller which are transferred to Purchaser pursuant to this Agreementrelating to periods prior to the Closing in a manner reasonably consistent withthe prior practices of Seller and (ii) upon reasonable notice, afford theofficers, employees and authorized agents and representatives of Sellerreasonable access (including the right to make photocopies at Seller’sexpense), during normal business hours, to such books and records.

                           (c)         In order to facilitate the resolutionof any claims made by or against or incurred by Purchaser after the Closing orfor any other reasonable purpose, for a period of seven years following theClosing, Seller shall (i) retain all books and records of Seller which arenot transferred to Purchaser pursuant to this Agreement and which relate toSeller, its operations or the Business for periods prior to the Closing andwhich shall not otherwise have been delivered to Purchaser and (ii) upon reasonablenotice, afford the officers, employees and authorized agents andrepresentatives of Purchaser, reasonable access (including the right to makephotocopies at Purchaser’s expense), during normal business hours, to suchbooks and records.

             SECTION 5.3.                **Confidentiality**. Seller agrees to, and shall cause its agents, representatives, Affiliates,employees, officers and directors to: (i) treat and hold as confidential(and not disclose or provide access to any Person to) all information relatingto trade secrets, processes, patent or trademark applications, productdevelopment, price, customer and supplier lists, pricing and marketing plans,policies and strategies, operations methods, product development techniques,business acquisition plans, new personnel acquisition plans and any otherconfidential information with respect to the Business or the Assets,(ii) in the event that Seller or any such agent, representative,Affiliate, employee, officer or director becomes legally compelled to discloseany such information, provide Purchaser with prompt written notice of suchrequirement so that Purchaser may seek a protective order or other remedy orwaive compliance with this Section 5.3, (iii) in the event that suchprotective order or other remedy is not obtained, or Purchaser waivescompliance with this Section 5.3, furnish only that portion of suchconfidential information which is legally required to be provided and exerciseits best efforts to obtain assurances that confidential treatment will be accordedsuch information, and (iv) promptly furnish (prior to, at, or as soon aspracticable following, the Closing) to Purchaser any and all copies (inwhatever form or medium) of all such confidential information then in thepossession of Seller or any of its agents, representatives, Affiliates,employees, officers and directors and maintain in strict confidence ascorporate records any and all additional copies then in the possession ofSeller or any of its agents, representatives, Affiliates, employees, officersand directors of such information and of any analyses, compilations, studies orother documents prepared, in whole or in part, on the basis thereof with accessto such material limited to the board of directors and executive officers ofSeller on a “need-to-know” basis; provided, however, that this sentence shallnot apply to any information that, at the time of disclosure, is availablepublicly and was not disclosed in breach of this Agreement by Seller, itsagents, representatives, Affiliates, employees, officers or directors; providedfurther that specific information shall not be deemed to be within theforegoing exception merely because it is embraced in general disclosures in thepublic domain.  In addition, anycombination of features shall not be deemed to be within the foregoingexception merely because the individual features are in the public domainunless the combination itself and its principle of operation are in the publicdomain.  Seller agrees and acknowledgesthat remedies at Law for any breach of its obligations under thisSection 5.3 are inadequate and that in addition thereto Purchaser shall beentitled to seek equitable relief, including injunction and specificperformance, in the event of any such breach, without the necessity of demonstratingthe inadequacy of money damages.

             SECTION 5.4.                **Regulatory and Other Authorizations;Notices and Consents**.

                           (a)         Each party shall use its reasonableefforts to obtain all authorizations, consents, orders and approvals of allGovernmental Authorities and officials that may be or become necessary for itsexecution and delivery of, and the performance of its obligations pursuant to,this Agreement and the Ancillary Agreements and will cooperate fully with theother party in promptly seeking to obtain all such authorizations, consents,orders and approvals.  Each party heretoagrees to make an appropriate filing, if necessary, pursuant to the HSR Actwith respect to the transactions contemplated by this Agreement within fiveBusiness Days of the date hereof and to supply as promptly as practicable tothe appropriate Governmental Authorities any additional information anddocumentary material that may be requested pursuant to the HSR Act.

                           (b)        Seller shall give promptly such noticesto third parties and use its reasonable efforts to obtain such third partyconsents and estoppel certificates as are reasonably requested by Purchaser inconnection with the transactions contemplated by this Agreement and theAncillary Agreements, including, without limitation, all third party consentsthat are necessary or desirable in connection with the transfer of the MaterialContracts.

                           (c)         Purchaser shall cooperate and use allreasonable efforts to assist Seller in giving such notices and obtaining suchconsents and estoppel certificates; provided, however, that Purchaser shallhave no obligation to give any guarantee or other consideration of any naturein connection with any such notice, consent or estoppel certificate or toconsent to any change in the terms of any Material Contract which Purchaser inits sole and absolute discretion may deem adverse to the interests of Purchaseror the Business.  If solely as a resultof such decision by Purchaser, Seller is unable to obtain the consent, suchfailure shall not be a breach of Seller’s obligations to use reasonable effortsto obtain such consent.

                           (d)        Seller knows of no reason why all theconsents, approvals and authorizations necessary for the consummation of thetransactions contemplated hereby will not be received.

                           (e)         Seller and Purchaser agree that, in theevent any consent, approval or authorization necessary or desirable to preservefor the Business or Purchaser any right or benefit under any lease, license,contract, commitment or other agreement or arrangement to which Seller is aparty is not obtained prior to the Closing, Seller will, subsequent to theClosing, cooperate with Purchaser in attempting to obtain such consent,approval or authorization as promptly thereafter as practicable.  If such consent, approval or authorizationcannot be obtained, Seller will use its reasonable efforts to provide Purchaserwith the rights and benefits of the affected lease, license, contract,commitment or other agreement or arrangement for the term of such lease, license,contract or other agreement or arrangement, and, if Seller provides such rightsand benefits, Purchaser shall assume the obligations and burdens thereunder.

             SECTION 5.5.                **Notice of Developments**. Prior to the Closing, each party shall promptly notify the other party inwriting of (a) all events, circumstances, facts and occurrences arisingsubsequent to the date of this Agreement which could result in any breach of arepresentation or warranty or covenant of such party in this Agreement or whichcould have the effect of making any representation or warranty of such party inthis Agreement untrue or incorrect in any respect and (b) all othermaterial developments affecting the Assets, Liabilities, business, financialcondition, operations, results of operations, customer or supplier relations,employee relations, projections or prospects of the Business or such party’sability to otherwise perform under this Agreement.

             SECTION 5.6.                **OEM Agreement****s**. Purchaser and Seller will enter into definitive OEM Agreements in generally theforms attached hereto as Exhibit 5.6 (the “***OEM Agreements***”) and will negotiate in goodfaith and use best efforts to enter into such definitive OEM Agreements.

             SECTION 5.7.                **No Solicitation or Negotiation**. Seller agrees that between the date of this Agreement and the earlier of(i) the Closing and (ii) the termination of this Agreement, neitherSeller nor any of its respective Affiliates, officers, directors,representatives or agents will (a) solicit, initiate, consider, encourageor accept any other proposals or offers from any Person (i) relating toany acquisition or purchase of all of the capital stock of Seller (or acontrolling portion of such stock) or assets of Seller, (ii) to enter intoany business combination with Seller or (iii) relating to any acquisitionor purchase of all or any portion of the Assets or any assets related to theBusiness, or (b) participate in any discussions, conversations,negotiations or other communications regarding, or furnish to any other Personany information with respect to, or otherwise cooperate in any way, assist orparticipate in, facilitate or encourage any effort or attempt by any otherPerson to seek to do any of the foregoing. Seller immediately shall cease and cause to be terminated all existingdiscussions, conversations, negotiations and other communications with anyPersons conducted heretofore with respect to any of the foregoing.  Seller shall notify Purchaser promptly ifany such proposal or offer, or any inquiry or other contact with any Personwith respect thereto, is made and shall, in any such notice to Purchaser,indicate in reasonable detail the identity of the Person making such proposal,offer, inquiry or contact and the terms and conditions of such proposal, offer,inquiry or other contact.  Seller agreesnot to, without the prior written consent of Purchaser, release any Personfrom, or waive any provision of, any confidentiality or standstill agreement towhich Seller is a party.

             SECTION 5.8.                **Use and Transfer of IntellectualProperty**.

                           (a)         Except as set forth inSection 5.8(a) of the Disclosure Schedule, from and after the Closing,Seller shall not use any of the Owned Intellectual Property or the LicensedIntellectual Property except as otherwise agreed by the parties in the OEMAgreements.

                           (b)        As promptly as practicable following theClosing, Seller shall remove or obliterate any Owned Intellectual Property orLicensed Intellectual Property from letterheads and other materials remainingin its possession or under its control, and Seller shall not use or put intouse after the Closing any materials that bear any trademark, service mark,trade dress, logo, trade name or corporate name contained in the OwnedIntellectual Property or the Licensed Intellectual Property or any trademark,service mark, trade dress, logo, trade name or corporate name similar orrelated thereto.

                           (c)         On or prior to the Closing Seller shalldeliver electronically to Purchaser a copy of all Owned Intellectual Propertyand all Licensed Intellectual Property.

             SECTION 5.9.                **Non-Competition**.

                           (a)         In partial consideration of the paymentof the Purchase Price, as set forth in Section 2.3, Seller and Purchaseragree that for a period of two years after the Closing (the “***Restricted Period***”),Seller shall not engage, directly or indirectly, in any business anywhere inthe world that manufactures, produces, supplies, sells or licenses softwareproducts with functionality substantially similar to functionality contained inany of the Cleaner 5, Cleaner XL, Cleaner Live, Cinestream (EditDV),“Hitman”, and IntroDV product lines as of the Closing Date or, without theprior written consent of Purchaser, directly or indirectly, own a greater than5% interest in, manage, operate or control any Person that competes with suchproduct lines; provided, however, that, for the purposes of thisSection 5.9, Seller may manufacture, produce, supply, sell or licensesystems and subsystems (which may contain hardware and software components)having functionality substantially greater than that contained in theabove-stated product lines and are not similar in terms of primaryfunctionality or price with such product lines.

                           (b)        As a separate and independent covenant,Seller agrees with Purchaser that, for a period of three years following theClosing, Seller will not in any way, directly or indirectly, interfere with orattempt to interfere with any custom, trade, business or patronage of theBusiness transferred to Purchaser pursuant to this Agreement, or interfere withor attempt to interfere with any officers, employees, representatives or agentsof the Business transferred to Purchaser pursuant to this Agreement, or induceor attempt to induce any of them to leave the employ of Purchaser or violatethe terms of their contracts, or any employment arrangements, with Purchaser.

             SECTION 5.10.              **Excluded Liabilities**. Seller will pay and discharge the Excluded Liabilities as and when the samebecome due and payable including without limitation, any obligations of Sellerunder Section 1.6 of that certain Agreement and Plan of Reorganization datedMay 6, 1999 by and among Seller, Media 100 Acquisition Corp., TerranInteractive, Inc., certain principal shareholders of Terran Interactive, Inc.and the Shareholders’ agent.  Purchaserwill pay and discharge the Assumed Liabilities as and when the same become dueand payable.

             SECTION 5.11.              **Bulk Transfer Laws**. Purchaser hereby waives compliance by Seller with any applicable bulk sale orbulk transfer laws of any jurisdiction in connection with the sale of theAssets to Purchaser (other than any obligations with respect to the applicationof the proceeds herefrom).  Pursuant toArticle IX; provided, however, that Seller agrees to indemnify Purchaseragainst any and all liabilities which may be asserted by third parties againstPurchaser as a result of Seller’s noncompliance with any such law.

             SECTION 5.12.              **Further Action**. Each of the parties hereto shall use all reasonable efforts to take, or causeto be taken, all appropriate action, do or cause to be done all thingsnecessary, proper or advisable under applicable Laws, and execute and deliversuch documents and other papers, as may be required to carry out the provisionsof this Agreement and consummate and make effective the transactionscontemplated by this Agreement.

             SECTION5.13.              **Product Returns**. Seller shall be responsible for product returns (except for warranty returns)from end users for products shipped prior to Closing, and shall bear all costsand responsibility for any amounts due end users.  Seller also shall be responsible for product returns fromdistributors and resellers on or before 42 days after Closing, and shall bearall costs and responsibility for any amounts due distributors and resellers,except for products shipped by Purchaser. Within 42 days of Closing, Purchaser shall not intentionally causedistributors or resellers to return product to Seller.  Purchaser shall be responsible for productreturns from distributors after 42 days from Closing, except for productsshipped by Seller.

             SECTION5.14.              **Agreements Provided**. No later than three business days prior to the Closing, Seller shall providePurchaser with copies of any agreements listed on the Disclosure Schedule.  To the extent that Seller has not providedall agreements listed on the Disclosure Schedule to Purchaser at least threedays prior to the signing of this Agreement (the “***Withheld Agreements***”) or completed theDisclosure Schedule at least three business days prior to signing, Purchaser,in its sole discretion, shall have the opportunity to modify Exhibit 2.2(a)hereto, relating to Assumed Liabilities, including adding or deletingliabilities prior to the Closing.

             SECTION5.15.              **Sublease Agreement**. Seller shall enter into a sublease agreement with Purchaser with respect to theLeased Real Property located in Los Gatos, California, and such sublease shallinclude a rental rate no less favorable than the rate paid by Sellerimmediately prior to signing this Agreement.

**ARTICLE VI**

**EMPLOYEEMATTERS**

             SECTION 6.1.                **Offer of Employment**. As of the date hereof or, at Purchaser’s sole discretion, as of the ClosingDate, the current Employees of Seller listed on Exhibit 6.1(a) hereof (the “***Key Employees***”) shallhave accepted Purchaser’s offer of employment and shall have executed anemployment and non–competition agreement in the form attached hereto asExhibit 6.1(b) which shall be in effect as of the Closing Date.  Prior to the Closing, Purchaser (in its solediscretion) shall offer employment, contingent on the Closing, to certain otherEmployees identified by Purchaser on Exhibit 6.1(a) (such Exhibit 6.1(a)may be updated by Purchaser at any time prior to the date five (5) days priorto Closing) (“***Identified Employees***”)and who are still employed with Seller or its Affiliates on the day immediatelypreceding the Closing Date, such employment to commence on the ClosingDate.  As used herein, “***Transferred Employee***”shall mean each such Employee who accepts such offer and each of the KeyEmployees and Identified Employees.  ThePurchaser shall indemnify Seller for all liabilities, salaries, benefits andsimilar employer obligations with respect to each Transferred Employee that areattributable to such Transferred Employee’s employment relationship with the Purchaserafter the Closing Date.

             SECTION 6.2.                **Seller’s Obligations**.  From and afterthe Closing Date, Seller and its Affiliates shall indemnify the Purchaser andits Affiliates from and against all Benefits Liabilities and shall be solelyresponsible for all Benefits Liabilities whether incurred before, on or afterthe Closing Date.  Seller agrees to(i) cooperate with Purchaser in the recruitment of the Key Employee andIdentified Employees, and (ii) terminate the employment of the KeyEmployees and Identified Employees with the Seller and its Affiliates on theClosing Date, except for employees located outside California who have notaccepted Purchaser’s offer of employment on or prior to Closing.  Seller agrees to pay any and all liabilitiesrelating to such termination, including, without limitation any payments andbenefits due such Key Employee and Identified Employees pursuant to accruedsalary and wages, vacation and other benefits and severance payments or similarpayments (excluding benefits provided by the Purchaser after the Closing Date),and agrees to provide continuation health coverage, as required under COBRA, toall such Key Employees, Identified Employees and their eligible dependents andany other individual who becomes M&A qualified beneficiaries (as defined byTreasury Regulation Section 54.4980B-9, Q&A-4) as a result of thetransactions contemplated by this Agreement. Seller agrees that, for a period of one year from the Closing Date, itwill not, directly or indirectly, solicit for employment or hire any KeyEmployee or Identified Employee whose employment is terminated by Seller inconnection with this transaction. Purchaser shall have no liability for any bonuses paidor payable to any Employee which relate solely to thesuccessful completion of the transactions contemplated by this Agreement.

             SECTION 6.3.                **Certain Other Employee-Related Costs**. Five Business Days prior to the Closing Date, Seller shall provide Purchaserwith a complete and accurate statement of any amounts expected to be payable byPurchaser following the Closing that relate to any service by any TransferredEmployee with Seller through the Closing Date, including, without limitation,any salary or wages, any accrued vacation, sick or personal days or any bonuses(the “***Employee Amounts***”).  If such statement is not delivered theEmployee Amounts shall be assumed to equal zero.  In the event that the amounts payable by Purchaser following theClosing Date that relate to service by any Transferred Employee with Seller throughto the Closing Date exceed the Employee Amounts, Seller shall indemnifyPurchaser for such excess pursuant to Section 9.2.

             SECTION 6.4.                **Employee Benefits**.  For a period ofat least one (1) year after the Closing Date, the Purchaser shall (in its solediscretion) either (i) provide each Transferred Employee with benefitsunder the Purchaser’s employee benefit plans that are substantially similar inthe aggregate to the benefits that were provided to such Transferred Employeeunder the Plans as of the day immediately preceding the Closing Date, or(ii) arrange for such Transferred Employee to participate in thePurchaser’s benefit plans on terms similar to those offered to similarlysituated employees of the Purchaser, or (iii) a combination of (i) and(ii).  Transferred Employees shall be treated asterminated employees under the Seller’s401(K) Plan as of the Closing Date.  Seller shall permit such TransferredEmployees to receive distributions from Seller’s 401(K) Planinaccordance with applicable Law and the terms of such plan after the ClosingDate.

**ARTICLE VII**

**TAXMATTERS**

             SECTION 7.1.                **Indemnity**.

                           (a)         Seller agrees to indemnify and holdharmless Purchaser against the following Taxes and against any loss, damage,liability or expense, including reasonable fees for attorneys and other outsideconsultants, incurred in contesting or otherwise in connection with any suchTaxes: (i) Taxes imposed on Seller, the Business or the Assets withrespect to taxable periods of such Person ending on or before the Closing Date;(ii) with respect to taxable periods beginning before the Closing Date andending after the Closing Date, Taxes imposed on Seller, the Business or theAssets which are allocable, pursuant to Section 7.1(c), to the portion of suchperiod ending on the Closing Date; and (iii) Taxes imposed on Purchaser asa result of any breach of warranty or misrepresentation under Section 3.25of this Agreement.

                           (b)        Purchaser agrees to indemnify and holdharmless Seller against the following Taxes and against any loss, damage,liability or expense, including reasonable fees for attorneys and other outsideconsultants, incurred in contesting or otherwise in connection with any suchTaxes:  (i) Taxes imposed on theBusiness or the Assets with respect to taxable periods commencing after theClosing Date; and (ii) with respect to taxable periods beginning on orbefore the Closing Date and ending after the Closing Date, Taxes imposed on theBusiness or the Assets which are allocable, pursuant to Section 7.1(c), to theportion of such period beginning after the Closing Date.

                           (c)         In the case of Taxes that are payablewith respect to a taxable period that begins before the Closing Date and endsafter the Closing Date, the portion of any such Tax that is allocable to theportion of the period ending on the Closing Date shall be:

                                        (i)          in the case of Taxes that are either(x) based upon or related to income or receipts, or (y) imposed inconnection with any sale or other transfer or assignment of property (real or personal,tangible or intangible) (other than conveyances pursuant to this Agreement, asprovided under Section 7.4), deemed equal to the amount which would bepayable if the taxable year ended on the Closing Date; and

                                        (ii)         in the case of Taxes imposed on aperiodic basis with respect to the assets of Seller, any Assets or otherwisemeasured by the level of any item, deemed to be the amount of such Taxes forthe entire period (or, in the case of such Taxes determined on an arrearsbasis, the amount of such Taxes for the immediately preceding period)multiplied by a fraction the numerator of which is the number of calendar daysin the period ending on the Closing Date and the denominator of which is thenumber of calendar days in the entire period.

             SECTION 7.2.                **Returns and Payments**. From the date of this Agreement through and after the Closing Date, Sellershall prepare and file or otherwise furnish in proper form to the appropriateGovernmental Authority (or cause to be prepared and filed or so furnished) in atimely manner all Tax returns, reports and forms (“***Returns***”) relating to Seller and the Businessthat are due on or before or relates to any taxable period ending on or beforethe Closing Date (and Purchaser shall do the same for Returns relating to theBusiness with respect to any taxable period ending after the ClosingDate).  Returns of the Business not yetfiled for any taxable period that begins before the Closing Date shall beprepared in a manner consistent with past practices employed with respect tosuch businesses (except to the extent counsel for Seller renders a legalopinion there is no reasonable basis in Law therefor or that a Return cannot beso prepared and filed without being subject to penalties).  With respect to any Return required to befiled by Purchaser or Seller with respect to the Business or the Assets and asto which an amount of Tax is allocable to the other party under Section 7.1(c),the filing party shall provide the other party and its authorizedrepresentatives with a copy of such completed Return and a statement certifyingthe amount of Tax shown on such Return that is allocable to such other partypursuant to Section 7.1(c), together with appropriate supporting informationand schedules at least 20 Business Days prior to the due date (including anyextension thereof) for the filing of such Return, and such other party and itsauthorized representatives shall have the right to review and comment on suchReturn and statement prior the filing of such Return.

             SECTION 7.3.                **Cooperation and Exchange ofInformation**. Upon the terms set forth in Section 5.2, Seller and Purchaser shallprovide each other with such cooperation and information as either of themreasonably may request of the other in filing any Return, amended Return orclaim for refund, determining a liability for Taxes or a right to a refund ofTaxes, participating in or conducting any audit or other proceeding in respectof Taxes or making representations to or furnishing information to partiessubsequently desiring to purchase all or a part of the Business fromPurchaser.  Such cooperation andinformation shall include providing copies of relevant Returns or portionsthereof, together with accompanying schedules, related work papers anddocuments relating to rulings or other determinations by Tax authorities.  Seller shall make its employees available ona basis mutually convenient to both parties to provide explanations of anydocuments or information provided hereunder. Each of Seller and Purchaser shall retain all Returns, schedules andwork papers, records and other documents in its possession relating to Taxmatters of Seller and the Business for each taxable period first ending afterthe Closing Date and for all prior taxable periods until the later of (i) theexpiration of the statute of limitations of the taxable periods to which suchReturns and other documents relate, without regard to extensions except to theextent notified by the other party in writing of such extensions for therespective Tax periods, or (ii) six years following the due date (withoutextension) for such Returns.  Anyinformation obtained under this Section 7.3 shall be kept confidential inaccordance with Section 5.3 except as may be otherwise necessary inconnection with the filing of Returns or claims for refund or in conducting anaudit or other proceeding.

             SECTION 7.4.                **Conveyance Taxes**. Each of Seller and Purchaser shall be responsible for payment of one-half ofany real property transfer or gains, sales, use, transfer, value added, stocktransfer, and stamp taxes, any transfer, recording, registration, and otherfees, and any similar Taxes which become payable in connection with thetransactions contemplated by this Agreement and the Ancillary Agreements.  Seller, after the review and consent byPurchaser, shall file such applications and documents as shall permit any suchTax to be assessed and paid on or prior to the Closing Date in accordance withany available pre-sale filing procedure. Purchaser shall execute and deliver all instruments and certificatesnecessary to enable Seller to comply with the foregoing.  Purchaser shall complete and execute aresale or other exemption certificate with respect to the inventory items soldhereunder, and shall provide Seller with an executed copy thereof.

             SECTION 7.5.                **Miscellaneous**.

                           (a)         Seller and Purchaser agree to treat allpayments made by either to or for the benefit of the other under thisArticle VII, under other indemnity provisions of this Agreement and forany misrepresentations or breach of warranties or covenants, as adjustments tothe Purchase Price or as capital contributions for Tax purposes and that suchtreatment shall govern for purposes hereof except to the extent that the lawsof a particular jurisdiction provide otherwise, in which case such paymentsshall be made in an amount sufficient to indemnify the relevant party on anafter-Tax basis.

                           (b)        Notwithstanding any provision in thisAgreement to the contrary, the obligations of Seller to indemnify and holdharmless Purchaser pursuant to this Article VII, and the representationsand warranties contained in Section 3.25, shall terminate at the close ofbusiness on the 120th day following the expiration of the applicable statute oflimitations with respect to the Tax liabilities in question (giving effect toany waiver, mitigation or extension thereof).

                           (c)         From and after the date of thisAgreement, Seller shall not without the prior written consent of Purchaser(which may, in its sole and absolute discretion, withhold such consent) make,or cause or permit to be made, any Tax election that would affect the Business.

                           (d)        For purposes of this Article VII,“Purchaser” and “Seller”, respectively, shall include each member of theaffiliated group of corporations of which it is or becomes a member.

                           (e)         Neither Purchaser nor Seller shallenter into any compromise or agree to settle any claim pursuant to any Taxaudit or proceeding which would adversely affect the other party for such yearor a subsequent year without the written consent of the other party, whichconsent may not be unreasonably withheld.

**ARTICLE VIII**

**CONDITIONS TO CLOSING**

             SECTION 8.1.                **Conditions to Obligations of Seller**. The obligations of Seller to consummate the transactions contemplated by thisAgreement shall be subject to the fulfillment, at or prior to the Closing, ofeach of the following conditions:

                           (a)         **Representations,Warranties and Covenants**. The representations and warranties of Purchaser contained in thisAgreement shall have been true and correct when made and shall be true andcorrect in all material respects as of the Closing, with the same force andeffect as if made as of the Closing Date, other than such representations andwarranties as are made as of another date, the covenants and agreementscontained in this Agreement to be complied with by Purchaser on or before theClosing shall have been complied with in all material respects, and Sellershall have received a certificate from Purchaser to such effect signed by aduly authorized officer thereof;

                           (b)        **HSRAct**.  Any waiting period(and any extension thereof) under the HSR Act applicable to the purchase of theAssets contemplated by this Agreement shall have expired or shall have beenterminated;

                           (c)         **NoProceeding or Litigation**. No Action shall have been commenced by or before any GovernmentalAuthority against either Seller or Purchaser, seeking to restrain or materiallyand adversely alter the transactions contemplated by this Agreement which, inthe reasonable, good faith determination of Seller, is likely to render itimpossible or unlawful to consummate such transactions; provided, however, thatthe provisions of this Section 8.1(c) shall not apply if Seller hasdirectly or indirectly solicited or encouraged any such Action;

                           (d)        **Resolutions**.  Seller shall have received a true andcomplete copy, certified by the Secretary or an Assistant Secretary ofPurchaser, of the resolutions duly and validly adopted by the Board ofDirectors of Purchaser evidencing its authorization of the execution anddelivery of this Agreement and the Ancillary Agreements to which it is a partyand the consummation of the transactions contemplated hereby and thereby;

                           (e)         **IncumbencyCertificate**.  Sellershall have received a certificate of the Secretary or an Assistant Secretary ofPurchaser certifying the names and signatures of the officers of Purchaserauthorized to sign this Agreement and the Ancillary Agreements to which it is aparty and the other documents to be delivered hereunder and thereunder;

                           (f)         **AncillaryAgreements**.  Purchasershall have executed and delivered to Seller each of the Ancillary Agreements towhich it is a party;

                           (g)        **OEMAgreements**.  Purchaserand Seller shall have executed the OEM Agreements pursuant to Section 5.6;and

                           (h)        **LegalOpinion**. Seller shall have received from Purchaser’s outsidelegal counsel an opinion, addressed to Seller and dated the Closing Date,substantially in the form of Exhibit 8.1(h).

             SECTION 8.2.                **Conditions to Obligations ofPurchaser**. The obligations of Purchaser to consummate the transactions contemplated bythis Agreement shall be subject to the fulfillment, at or prior to the Closing,of each of the following conditions:

                           (a)         **Representations,Warranties and Covenants**. The representations and warranties of Seller contained in this Agreementshall have been true and correct when made and shall be true and correct in allmaterial respects as of the Closing with the same force and effect as if madeas of the Closing, other than such representations and warranties as are madeas of another date, the covenants and agreements contained in this Agreement tobe complied with by Seller on or before the Closing shall have been compliedwith in all material respects, and Purchaser shall have received a certificateof Seller to such effect signed by a duly authorized officer thereof;

                           (b)        **HSRAct**.  Any waiting period(and any extension thereof) under the HSR Act applicable to the purchase of theAssets contemplated hereby shall have expired or shall have been terminated;

                           (c)         **NoProceeding or Litigation**. No Action shall have been commenced or threatened by or before anyGovernmental Authority against either Seller or Purchaser, seeking to restrainor materially and adversely alter the transactions contemplated hereby whichPurchaser believes, in its sole and absolute discretion, is likely to render itimpossible or unlawful to consummate the transactions contemplated by thisAgreement or which could have a Material Adverse Effect or otherwise render inadvisable,the consummation by Purchaser of the transactions contemplated by thisAgreement; provided, however, that the provisions of this Section 8.2(c)shall not apply if Purchaser has solicited or encouraged any such Action;

                           (d)        **Resolutionsof Seller**.  Purchasershall have received a true and complete copy, certified by the Secretary or anAssistant Secretary of Seller, of the resolutions duly and validly adopted bythe Board of Directors of Seller and, if required, the stockholders of Sellerevidencing the authorization of the execution and delivery of this Agreementand the Ancillary Agreements and the consummation of the transactionscontemplated hereby and thereby;

                           (e)         **IncumbencyCertificate of Seller**. Purchaser shall have received a certificate of the Secretary or anAssistant Secretary of Seller certifying the names and signatures of theofficers of Seller authorized to sign this Agreement and the AncillaryAgreements and the other documents to be delivered hereunder and thereunder;

                           (f)         **LegalOpinion**.  Purchaser shallhave received from Seller’s outside legal counsel an opinion, addressed toPurchaser and dated the Closing Date, substantially in the form of Exhibit8.2(f);

                           (g)        **Consentsand Approvals**.  Purchaserand Seller shall have received, each in form and substance satisfactory toPurchaser in its sole and absolute discretion, all authorizations, consents,orders and approvals of all Governmental Authorities and officials and allthird party consents and estoppel certificates which Purchaser in its sole andabsolute discretion deems necessary or desirable for the consummation of thetransactions contemplated by this Agreement and the Ancillary Agreements,including, without limitation, all third party consents required under anyMaterial Contracts;

                           (h)        **AncillaryAgreements**.  Seller shallhave executed and delivered to Purchaser each of the Ancillary Agreements towhich it is a party;

                           (i)          **NoMaterial Adverse Effect**. No circumstance, change in, or effect on the Business shall have occurredwhich has a Material Adverse Effect;

                           (j)          **OEMAgreements**.  Purchaserand Seller shall have executed the OEM Agreements pursuant to Section 5.6.

                           (k)         **Employees**.  The Key Employees and not less than 90% ofthe Identified Employees shall have executed all documents necessary to becomeemployees of Purchaser and any such agreements shall be in full force andeffect on the Closing Date.

                           (l)          **EmployeeAmounts**.  Purchaser shallhave received Seller’s notification pursuant to Section 6.4; and

                           (m)        **Certificateof Non-Foreign Status**. Purchaser shall have received a certificate from Seller (which complieswith Section 1445 of the Code) of non-foreign status executed inaccordance with the provisions of the Foreign Investment in Real Property TaxAct.

                           (n)        **WithheldAgreements**.  Seller shallhave provided Purchaser with copies of the Withheld Agreements, and Purchaser,in its sole discretion, shall have the opportunity to modify Exhibit 2.2(a)hereto, relating to Assumed Liabilities, including adding or deleting liabilitiesprior to the Closing.

                           (o)        **SubleaseAgreement**.  Purchaser andSeller shall have entered into a sublease agreement with respect to the LeasedReal Property located in Los Gatos, California and such sublease shall includea rental rate no less favorable than the rate paid by Seller immediately priorto signing this Agreement.

**ARTICLE IX**

**INDEMNIFICATIONAND ESCROW**

             SECTION 9.1.                **Survival of Representations andWarranties**.

             Therepresentations and warranties of Seller contained in this Agreement and theAncillary Agreements, and all statements contained in the AcquisitionDocuments, shall survive the Closing until the third anniversary thereof;provided, however, that (a) the representations and warranties dealingwith Tax matters shall survive as provided in Section 7.5(b), (b) therepresentations and warranties contained in Section 3.15 relating toIntellectual Property and Section 3.18 relating to the Assets shallsurvive until the later of the expiration of all applicable statutes oflimitations or the third anniversary of the Closing, and (c) insofar asany claim is made by Purchaser for the breach of any representation or warrantyof Seller contained herein, which claim arises out of allegations of personalinjury or property damage suffered by any third party on or prior to theClosing Date or attributable to products or Inventory sold or shipped, oractivities or omissions that occur, on or prior to the Closing Date, suchrepresentations and warranties shall, for purposes of such claim by Purchaser,survive until thirty calendar days after the expiration of the applicablestatute of limitations governing such claims. If written notice of a claim has been given prior to the expiration ofthe applicable representations and warranties by Purchaser to Seller, then therelevant representations and warranties shall survive as to such claim untilthe claim has been finally resolved.

             SECTION9.2.                **Indemnification**.

                           (a)         On or after the Closing Date andconditional on the Closing occurring, Purchaser and its Affiliates, officers,directors, employees, agents, successors and assigns (each an “***Indemnified Purchaser Party***”)shall be indemnified and held harmless by Seller for any and all Liabilities,losses, damages, claims, costs and expenses, interest, awards, judgments andpenalties (including, without limitation, attorneys’ and consultants’ fees andexpenses) actually suffered or incurred by them (including, without limitation,any Action brought or otherwise initiated by any of them) (each a “***Loss***” and togetherthe “***Losses***”),arising out of or resulting from:

                                        (i)          the breach of any representation orwarranty made by Seller contained in the Acquisition Documents; or

                                        (ii)         the breach of any covenant or agreementby Seller contained in the Acquisition Documents; or

                                        (iii)        Excluded Liabilities; or

                                        (iv)       Liabilities of Seller, whether arisingbefore or after the Closing Date, arising from or relating to any of [specifieditems listed in the Disclosure Schedule]; or

                                        (v)        any and all Losses suffered or incurredby Purchaser by reason of or in connection with any claim or cause of action ofany third party to the extent arising out of any action, inaction, event,condition, liability or obligation of Seller occurring or existing prior to theClosing; or

                                        (vi)       the excess of the amounts payable byPurchaser following the Closing Date that relate to service by any TransferredEmployee with Seller through to the Closing Date over the Employee Amounts; or

             Tothe extent that Seller’s undertakings set forth in this Section 9.2 may beunenforceable, Seller shall contribute the maximum amount that it is permittedto contribute under applicable Law to the payment and satisfaction of allLosses incurred by the Indemnified Purchaser Party, subject to the limitationsset forth in Section 9.3.

                           (b)        On or after the Closing Date andconditional on the Closing occurring, Seller and its Affiliates, officers,directors, employees, agents, successors and assigns (each an “***Indemnified Seller Party***”)shall be indemnified and held harmless by Purchaser for any and all Lossesarising out of or resulting from:

                                        (i)          the breach of any representation orwarranty made by Purchaser contained in the Acquisition Documents; or

                                        (ii)         the breach of any covenant or agreementby Purchaser contained in the Acquisition Documents; or

                                        (iii)        Assumed Liabilities.

             Tothe extent that Purchaser’s undertakings set forth in this Section 9.2 maybe unenforceable, Purchaser shall contribute the maximum amount that it ispermitted to contribute under applicable Law to the payment and satisfaction ofall Losses incurred by Indemnified Seller Party, subject to the limitations setforth in Section 9.3.

             (c)         A party seeking indemnification underthis Section 9.2 (the “***Indemnified Party***”) shall give the indemnifying party(the “***Indemnifying Party***”)notice of any matter which the Indemnified Party has determined has given orcould give rise to a right of indemnification under this Agreement, withinsixty (60) days of such determination, in the manner set forth in Section9.5(d) hereof.  The obligations andLiabilities of the Indemnifying Party under this Article IX with respectto Losses arising from claims of any third party which are subject to theindemnification provided for in this Article IX (“***Third Party Claims***”)shall be governed by and contingent upon the following additional terms andconditions: if an Indemnified Party shall receive notice of any Third PartyClaim, the Indemnified Party shall give the Indemnifying Party notice of suchThird Party Claim within thirty (30) days of the receipt by the IndemnifiedParty of such notice; provided, however, that the failure to provide suchnotice shall not release the Indemnifying Party from any of its obligationsunder this Article IX except to the extent Indemnifying Party ismaterially prejudiced by such failure and shall not relieve the IndemnifyingParty from any other obligation or liability that it may have to anyIndemnified Party otherwise than under this Article IX.  If the Indemnifying Party acknowledges inwriting its obligation to indemnify the Indemnified Party hereunder against anyLosses that may result from such Third Party Claim, then the Indemnifying Partyshall be entitled to assume and control the defense of such Third Party Claim atits expense and through counsel of its choice if it gives notice of itsintention to do so to the Indemnified Party within five (5) days of the receiptof such notice from the Indemnified Party; provided, however, that if thereexists or is reasonably likely to exist a conflict of interest that would makeit inappropriate in the judgment of the Indemnified Party for the same counselto represent both the Indemnified Party and the Indemnifying Party, then theIndemnified Party shall be entitled to retain its own counsel, in eachjurisdiction for which the Indemnified Party determines counsel is required, atthe expense of the Indemnifying Party. In the event the Indemnifying Party exercises the right to undertake anysuch defense against any such Third Party Claim as provided above, theIndemnified Party shall cooperate with the Indemnifying Party in such defenseand make available to the Indemnifying Party, at the Indemnifying Party’sexpense, all witnesses, pertinent records, materials and information in theIndemnified Party’s possession or under the Indemnified Party’s controlrelating thereto as is reasonably required by the Indemnifying Party.  Similarly, in the event the IndemnifiedParty is, directly or indirectly, conducting the defense against any such ThirdParty Claim, the Indemnifying Party shall cooperate with the Indemnified Partyin such defense and make available to the Indemnified Party, at theIndemnifying Party’s expense, all such witnesses, records, materials andinformation in the Indemnifying Party’s possession or under the IndemnifyingParty’s control relating thereto as is reasonably required by the IndemnifiedParty.  No such Third Party Claim may besettled by the Indemnifying Party without the written consentof the Indemnified Party.****

             SECTION 9.3.                **Limits on Indemnification****;Disputes**.

                           (a)         **Limitations**.  Notwithstanding anything to the contrarycontained in this Agreement and absent fraud, intentional misrepresentation orother willful misconduct, the maximum amount of indemnifiable Losses which maybe recovered from each of Seller or Purchaser arising out of or resulting fromthe causes enumerated in Section 9.2 shall not exceed $5,000,000.  In addition, neither party shall be requiredto indemnify the other unless all claims individually or in the aggregate ofone party for indemnification, either actual or reasonably estimable, exceed aminimum amount of $50,000.  If theclaims of one party exceed such minimum, that party may seek indemnificationfor its entire claim, including such minimum amount.

                           (b)        **DisputesNot Involving Third Party Claims**.  Any disputes with respect to claims for indemnification, otherthan Third Party Claims, shall be addressed in the manner set forth in Section9.5(f).

             SECTION9.4.                **Tax Matters**. Anything in this Article IX (except for the specific reference to Taxmatters in Section 9.1) to the contrary notwithstanding, the rights andobligations of the parties with respect to indemnification for any and all Taxmatters shall be governed by Article VII.

             SECTION 9.5.                **Escrow Arrangements**.

                           (a)         **EscrowFund**.  At the Closing, aspartial security for the indemnity provided for in Section 9.1 hereof,Seller agrees that Purchaser shall deposit a total of $2,000,000 (the “***Escrow Amount***”)payable to the Seller pursuant to this Agreement into an “***Escrow Fund***,” withoutany further act of Seller.

                                        (i)          The Escrow Fund shall be invested bythe Escrow Agent as directed in writing by Purchaser and Seller, withoutdistinction between principal and income, in certi­fi­cates of deposit, U. S.Department of Treasury bills, business money market accounts, or any fundmaintained by the Escrow Agent that includes similar investments, all of whichinvestments shall be payable on demand or will mature within thirty (30) daysor less from the date of original issue. Unless otherwise directed in writing by Purchaser and Seller, the Escrowagent shall initially invest the Escrow Fund in a business money marketaccount.

                                        (ii)         The Escrow Fund, as such term is usedherein, shall include the initial Escrow Amount deposited into the Escrow Fundpursuant to Section 9.5(a) hereof and any interest earned on the Escrow Fund,less any payments or distributions made hereunder.  It is agreed for federal income tax purposes that Seller shall nothave any right, title or interest in or to the Escrow Fund until thetermination of the Escrow Fund pursuant to Section 9.5(b) hereof, and partieshereto shall treat the Escrow Fund as a grantor trust established by Purchaser.

                                        (iii)        Purchaser may not receive any funds fromthe Escrow Fund unless and until Officer’s Certificates (as defined inparagraph (d) below) identifying Losses, the aggregate amount of which exceed$50,000, have been delivered to the Escrow Agent as provided inparagraph (e); in such case, Purchaser may recover from the Escrow Fundthe total of its Losses, including the first $50,000.

                           (b)        **Termination**.  Subject to the provisions of Sections 9.5(a)and (g) hereof, the Escrow Fund shall remain in existence during the period oftime between the Closing Date and the first anniversary of the Closing Date(the “***Escrow Period***”).

                           (c)         **Protectionof Escrow Fund**.  TheEscrow Agent shall hold and safeguard the Escrow Fund during the Escrow Period,shall treat such fund as a trust fund in accordance with the terms of thisAgreement and shall hold and dispose of the Escrow Fund only in accordance withthe terms hereof.  If at any time theEscrow Agent receives written instructions signed by each of the Seller and thePurchaser, it shall, without delay, take the action that is described in suchinstructions.

                           (d)        **ClaimsUpon Escrow Fund**.  Uponreceipt by the Escrow Agent at any time on or before the last day of the EscrowPeriod of a certificate signed by any officer of an Indemnified Purchaser Party(an “***Officer’sCertificate***”):

                                        (i)          stating that an Indemnified PurchaserParty has paid or properly accrued or reasonably anticipates that it will haveto pay or accrue Losses in an aggregate stated amount to which such party isentitled to indemnity pursuant to this Agreement; and

                                        (ii)         specifying in reasonable detail theindividual items of Losses included in the amount so stated, the date each suchitem was paid or properly accrued, or the basis for such anticipated liability,and the nature of the misrepresentation, breach of warranty or covenant orotherwise to which such item is related, the Escrow Agent shall, subject to theprovisions of Section 7 hereof, deliver to the Indemnified Purchaser Partyout of the Escrow Fund, as promptly as practicable, the amount of cash equal tosuch Losses as indemnity.

                           (e)         **Objectionsto Claims**.  At the timeof delivery of any Officer's Certificate to the Escrow Agent (the “***Delivery***”), aduplicate copy of such certificate shall be delivered to Seller and for aperiod of ten (10) calendar days after the Delivery, the Escrow Agent shallmake no pay­ment to the Indemnified Purchaser Party unless the Escrow Agentshall have received written authoriza­tion from Seller to make suchpayment.  After the expi­ration of suchten (10) day period, the Escrow Agent shall make payment to the IndemnifiedPurchaser Party in accor­dance with Section 9.5(d) hereof; provided that, nosuch payment may be made if Seller shall object in a written statement to theclaim made in the Officer's Certificate, and such statement shall have beenreceived the Escrow Agent prior to the expiration of such ten (10) day period.

                           (f)         **Resolutionof Conflicts; Arbitration**.

                                        (i)          In case Seller shall so object inwriting to any claim or claims made in any Officer's Certificate, Seller andthe Indemnified Purchaser Party shall attempt in good faith to agree upon therights of the respec­tive parties with respect to each of such claims;provided, however, that there shall be no presumption that the IndemnifiedPurchaser Party has not attempted to agree in good faith if the IndemnifiedPurchaser Party chooses to demand arbi­tration of the matter in the manner setforth in paragraph (ii) below after ten (10) days following Seller'sobjection.  If Seller and theIndemnified Purchaser Party should so agree, a memorandum setting forth suchagree­ment shall be prepared and signed by each of the Indemnified PurchaserParty and Seller and shall be furnished to the Escrow Agent.  The Escrow Agent shall be entitled to relyon any such memorandum and distribute cash from the Escrow Fund in accordancewith the terms thereof.

                                        (ii)         If no such agreement can be reachedafter good faith negotiation, either the Indemnified Purchaser Party or Sellermay demand arbitration of the matter unless the amount of the Loss is at issuein pending litiga­tion with a third party, in which event arbitration shall notbe commenced until such amount is ascertained or both parties agree toarbitration; and, in either such event, the matter shall be settled byarbitration conducted by three arbitrators. The Indemnified Purchaser Party and Seller shall each select onearbitrator, and the two arbitrators so selected shall select a third arbitrator.  The decision of a majo­rity of the arbitratorsso selected as to the validity and amount of any claim in such Officer'sCertificate shall be binding and conclusive upon the parties to this Agreement,and notwithstanding anything in Section 9.5(e) hereof, the Escrow Agent shallbe entitled to act in accordance with such decision and make or withholdpayments out of the Escrow Fund in accordance therewith.

                                        (iii)        Judgment upon any award rendered by thearbitrators may be entered in any court having jurisdiction.  Any such arbi­tration shall be held in MarinCounty, California under the rules then in effect of the American ArbitrationAssociation.  For pur­poses of thisSection 9.5(f), in any arbitration hereunder in which any claim or the amountthereof stated in the Officer's Certificate is at issue, the IndemnifiedPurchaser Party shall be deemed to be the “***Non-Prevailing Party***” in the event that thearbitrators award the Indemnified Purchaser Party less than fifty percent (50%)of the disputed amount (in addition to any amount not in dispute); other­wise,Seller shall be deemed to be the Non-Prevailing Party.  The Non-Prevailing Party to an arbitrationshall pay its own expenses, the fees of each arbitrator, the administra­tivefee of the American Arbitration Association, and the expenses, including,without limitation, reasonable attorneys' fees and costs, incurred by the otherparty to the arbitration and the Escrow Agent.

                           (g)        **DistributionsOut of Escrow Fund**. Promptly following termination of the Escrow Period, the Escrow Agentshall deliver to Seller all of the cash and accrued interest remaining in theEscrow Fund in excess of any amount sufficient, in the reasonable judgment ofPurchaser (subject to arbitration of the matter in the event of a dispute withSeller), to satisfy any unsatisfied claims specified in any Officer'sCertificate delivered to the Escrow Agent prior to termination of the EscrowPeriod.  As soon as all such claims havebeen resolved, the Escrow Agent shall deliver to the Seller all cash andaccrued interest remaining in the Escrow Fund and not required to satisfy suchclaims.  Purchaser agrees that, to theextent permitted by law, it will do any tax reporting required in connectionwith such delivery of funds, and the Escrow Agent shall have no tax reportingobligation with respect thereto.

                           (h)        **ThirdParty Claims**.  In theevent Purchaser becomes aware of a third-party claim that Purchaser believesmay result in a demand against the Escrow Fund, Purchaser shall notify Sellerof such claim, and the Seller shall be entitled, at its expense, to participatein any defense of such claim.  Purchasershall have the right in its sole discretion to settle any such claim; provided,however, that except with the written consent of Seller (which shall not beunreasonably withheld), no settlement of any such claim with third partyclaimants shall alone be determinative of the amount of liability ofSeller.  In the event that Seller hasnot consented in writing to any such settlement, Purchaser and Seller shallresolve by arbitration any dispute as to the amount to which Purchaser isentitled from the Escrow Fund in respect of such settlement in the manner setforth in Sections 9.5(d), (e) and (f) hereof.

                           (i)          **EscrowAgent's Duties**.

                                        (i)          The Escrow Agent shall be obligatedonly for the performance of such duties as are specifically set forth hereinand may rely and shall be protected in relying on any instrument reasonablybelieved to be genuine and to have been signed or presented by the proper partyor parties.  The Escrow Agent shall notbe liable for any act done or omitted hereunder as Escrow Agent while acting ingood faith and in the exer­cise of reasonable judgment, and any act done oromitted pursuant to the advice of counsel shall be conclusive evidence of suchgood faith.

                                        (ii)         The Escrow Agent is hereby expresslyauthorized to disregard any and all warnings given by any of the Parties or byany other person, excepting only orders or process of courts of law, and ishereby expressly authorized to comply with and obey orders, judgments ordecrees of any court or the arbitration panel established pursuant to Section9.5(f) hereof.  In case the Escrow Agentobeys or complies with any such order, judgment or decree of any court or the arbitrationpanel established pursuant to Section 9.5(f) hereof, the Escrow Agent shall notbe liable to any of the parties or to any other person by reason of suchcompliance, notwithstanding any such order, judgment or decree being subse­quentlyreversed, modified, annulled, set aside, vacated or found to have been enteredwithout jurisdiction.

                                        (iii)        The Escrow Agent shall not be liable inany respect on account of the identity, authority or rights of the partiesexecuting or delivering or purporting to execute or deliver this Agreement orany documents or papers deposited or called for hereunder.

                                        (iv)       The Escrow Agent shall not be liable forthe expira­tion of any rights under any statute of limitations with respect tothis Agreement or any documents deposited with the Escrow Agent.

                                        (v)        In performing any duties under theAgreement, the Escrow Agent shall not be liable to any party for damages,losses, or expenses, except for gross negligence or willful misconduct on thepart of the Escrow Agent.  The EscrowAgent shall not incur any such liability for (i) any act or failure to actmade or omitted in good faith, or (ii) any action taken or omitted inreliance upon any instrument, including any written statement of affidavitprovided for in this Agreement that the Escrow Agent shall in good faithbelieve to be genuine, nor will the Escrow Agent be liable or responsible forforgeries, fraud, impersonations, or determining the scope of anyrepresentative authority.  In addition,the Escrow Agent may consult with legal counsel in connection with the EscrowAgent's duties under this Agreement and shall be fully protected in any acttaken, suffered, or permitted by him/her in good faith in accordance with theadvice of counsel.  The Escrow Agent isnot responsible for determining and verifying the authority of any personacting or purporting to act on behalf of any party to this Agreement.

                                        (vi)       If any controversy arises between theparties to this Agreement, or with any other party, concerning the subjectmatter of this Agreement, its terms or conditions, the Escrow Agent will not berequired to determine the controversy or to take any action regarding it.  The Escrow Agent may hold all documents andfunds and may wait for settlement of any such controversy by final appropriatelegal proceedings or other means as, in the Escrow Agent's discretion, may berequired of the Escrow Agent, despite what may be set forth elsewhere in thisAgreement.  In such event, the EscrowAgent will not be liable for interest or damage.

                                                     Furthermore,the Escrow Agent may at its option file an action of interpleader requiring theparties to answer and litigate any claims and rights among themselves.  The Escrow Agent is authorized to depositwith the clerk of the court all documents and funds held in escrow, except allcosts, expenses, charges and reasonable attorney fees incurred by the EscrowAgent due to the interpleader action and which the parties jointly andseverally agree to pay.  Upon initiatingsuch action, the Escrow Agent shall be fully released and discharged of andfrom all obligations and liability imposed by the terms of this Agreement.

                                        (vii)      The parties and their respectivesuccessors and assigns agree jointly and severally to indemnify and hold EscrowAgent harmless against any and all losses, claims, damages, liabilities, andexpenses, including reasonable costs of investigation, counsel fees, includingallocated costs of in-house counsel and disbursements that may be imposed onEscrow Agent or incurred by Escrow Agent in connection with the performance ofhis/her duties under this Agreement, including but not limited to anylitigation arising from this Agreement or involving its subject matter.

                                        (viii)     The Escrow Agent may resign at any timeupon giving at least thirty (30) calendar days written notice to the parties;provided, however, that no such resignation shall become effective until theappointment of a successor escrow agent which shall be accomplished asfollows:  The parties shall use theirbest efforts to mutually agree on a successor escrow agent within thirty (30)calendar days after receiving such notice. If the parties fail to agree upon a successor escrow agent within suchtime, the Escrow Agent shall have the right to petition a court of competentjurisdiction for the appointment of a successor escrow agent.  The successor escrow agent shall execute anddeliver an instrument accepting such appointment and it shall, without furtheracts, be vested with all the estates, properties, rights, powers, and duties ofthe predecessor escrow agent as if originally named as escrow agent.  The Escrow Agent shall be discharged fromany further duties and liability under this Agreement.

                                        (ix)        The rights and obligations of the EscrowAgent set forth in this Section 9.5 will be binding upon and inure to thebenefit of its successors in interest.

                           (j)          **Fees**.  All fees of the Escrow Agent for performanceof its duties hereunder shall be paid by Seller.  It is understood that the fees and usual charges agreed upon forservices of the Escrow Agent shall be considered compensation for ordinaryservices as contemplated by this Agreement. In the event that the conditions of this Agreement are not promptlyfulfilled, or if the Escrow Agent renders any service not provided for in thisAgreement, or if the parties request a substantial modification of its terms,or if any controversy arises, or if the Escrow Agent is made a party to, orintervenes in, any litigation pertaining to the Escrow Fund or its subjectmatter, the Escrow Agent shall be reasonably compensated for such extraordinaryservices and reimbursed for all costs, attorney's fees, including allocatedcosts of in-house counsel, and expenses occasioned by such default, delay,controversy or litigation.  The Sellerpromises to pay these sums upon demand.

             SECTION9.6.                **Exclusivity**. After the Closing, except with respect to claims based on fraud, intentionalmisrepresentation or other willful misconduct, the rights of an IndemnifiedParty under this Article IX shall be the sole and exclusive remedies of theIndemnified Party against the Indemnifying Party, its subsidiaries andaffiliates, and their officers, directors, employees and agents, with respectto claims resulting from or relating to any misrepresentation, breach ofwarranty or failure to perform any covenant, agreement or obligation containedin this Agreement or otherwise relating to the transactions that are thesubject of this Agreement.  Withoutlimiting the generality of the foregoing, in no event shall the parties beentitled to claim or seek rescission of the transactions consummated under thisAgreement.

             THEFOREGOING LIMITATIONS ON LIABILITY IS CUMULATIVE, WITH ALL PAYMENTS FOR CLAIMSOR DAMAGES UNDER THIS AGREEMENT BEING AGGREGATED TO DETERMINE SATISFACTION OFTHE LIMIT.  THE EXISTENCE OF ONE OR MORECLAIMS OR SUITS WILL NOT ENLARGE THE LIMIT. THESE LIMITATIONS APPLY TO ALL CAUSES OF ACTION UNDER OR RELATING TOTHIS AGREEMENT.  EXCEPT IN THE CASE OFFRAUD, INTENTIONAL MISREPRESENTATION OR OTHER WILLFUL MISCONDUCT IN NO EVENTSHALL ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF EITHER PARTY HAVE ANYPERSONAL LIABILITY UNDER OR RELATING TO THIS AGREEMENT.

**ARTICLE X**

**TERMINATION AND WAIVER**

             SECTION 10.1.              **Termination**. This Agreement may be terminated at any time prior to the Closing:

                           (a)         by Purchaser if, between the datehereof and the time scheduled for the Closing: (i) an event or conditionoccurs that has resulted in or that may be expected to result in a MaterialAdverse Effect; or (ii) Seller makes a general assignment for the benefitof creditors, or any proceeding shall be instituted by or against Sellerseeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,winding up or reorganization, arrangement, adjustment, protection, relief orcomposition of its debts under any Law relating to bankruptcy, insolvency orreorganization; or

                           (b)        by either Seller or Purchaser if theClosing shall not have occurred by September 30, 2001; provided, however,that the right to terminate this Agreement under this Section 10.1(b) shall notbe available to any party whose failure to fulfill any covenant under thisAgreement shall have been the cause of, or shall have resulted in, the failureof the Closing to occur on or prior to such date; or

                           (c)         by either Purchaser or Seller in theevent that any Governmental Authority shall have issued an order, decree orruling or taken any other action restraining, enjoining or otherwiseprohibiting the transactions contemplated by this Agreement and such order,decree, ruling or other action shall have become final and nonappealable; or

                           (d)        by the mutual written consent of Sellerand Purchaser.

             SECTION 10.2.              **Effect of Termination**.

                           (a)         In the event of termination of thisAgreement as provided in Section 10.1, this Agreement shall forthwith becomevoid and there shall be no liability on the part of either party hereto except(i) as set forth in Sections 5.3, 10.2(b), 11.01 and 11.03 and(ii) that nothing herein shall relieve either party from liability for anybreach of this Agreement.

                           (b)        Notwithstanding the foregoing, if,following a material breach by Seller of a covenant hereunder, the Closing doesnot occur because of the failure to satisfy the conditions to Purchaser’sobligation to effect the Closing contained in Article VIII, then Sellershall reimburse Purchaser for its costs and expenses, including, withoutlimitation, fees and disbursements of counsel, financial advisors, financingsources and accountants, incurred by Purchaser in connection with thepreparation, negotiation and performance of this Agreement and the transactionscontemplated hereby up to a maximum of $640,000.

                           (c)         Notwithstanding the foregoing, if,following a material breach by Purchaser of a covenant hereunder, the Closingdoes not occur because of the failure to satisfy the conditions to Seller’sobligation to effect the Closing contained in Article VIII, then Purchasershall reimburse Seller for its costs and expenses, including, withoutlimitation, fees and disbursements of counsel, financial advisors, financingsources and accountants, incurred by Seller in connection with the preparation,negotiation and performance of this Agreement and the transactions contemplatedhereby up to a maximum of $640,000.

             SECTION 10.3.              **Waiver**. Either party to this Agreement may (a) extend the time for the performanceof any of the obligations or other acts of the other party, (b) waive anyinaccuracies in the representations and warranties of the other party containedherein or in any document delivered by the other party pursuant hereto or(c) waive compliance with any of the agreements or conditions of the otherparty contained herein.  Any suchextension or waiver shall be valid only if set forth in an instrument inwriting signed by the party to be bound thereby.  Any waiver of any term or condition shall not be construed as awaiver of any subsequent breach or a subsequent waiver of the same term orcondition, or a waiver of any other term or condition, of this Agreement.  The failure of any party to assert any ofits rights hereunder shall not constitute a waiver of any of such rights.

**ARTICLE XI**

**MISCELLANEOUS**

             SECTION 11.1.              **Expenses**. Except as otherwise specified in this Agreement, all costs and expenses,including, without limitation, fees and disbursements of counsel, financialadvisors and accountants, incurred in connection with this Agreement and thetransactions contemplated hereby shall be paid by the party incurring suchcosts and expenses, whether or not the Closing shall have occurred.

             SECTION 11.2.              **Notices**. All notices, requests, claims, demands and other communications hereunder shallbe in writing and shall be given or made (and shall be deemed to have been dulygiven or made upon receipt) by delivery in person, or by courier service,cable, telecopy, telegram, or registered or certified mail (postage prepaid,return receipt requested) to the respective parties hereto at their addressesset forth on the signature pages to this Agreement (or at such other addressfor a party hereto as shall be specified in a notice given in accordance withthis Section 11.2).

             SECTION 11.3.              **Public Announcements**. No party to this Agreement shall make, or cause to be made, any press releaseor public announcement in respect of this Agreement or the transactionscontemplated hereby or otherwise communicate with any news media without theprior written consent of the other party, and the parties shall cooperate as tothe timing and contents of any such press release or public announcement;provided, however, that if a party concludes upon advice of counsel that it isrequired by law or regulation to make such press release or announcement, thenthat party shall be entitled to do so upon prior notification to the otherparty.

             SECTION 11.4.              **Headings**. The descriptive headings contained in this Agreement are for convenience ofreference only and shall not affect in any way the meaning, construction orinterpretation of this Agreement.

             SECTION 11.5.              **Severability**. If any term or other provision of this Agreement is invalid, illegal or incapableof being enforced by any Law or public policy, all other terms and provisionsof this Agreement shall nevertheless remain in full force and effect so long asthe economic or legal substance of the transactions contemplated hereby is notaffected in any manner materially adverse to any party.  Upon such determination that any term orother provision is invalid, illegal or incapable of being enforced, the partieshereto shall negotiate in good faith to modify this Agreement so as to effectthe original intent of the parties as closely as possible in an acceptablemanner in order that the transactions contemplated hereby are consummated asoriginally contemplated to the greatest extent possible.

             SECTION 11.6.              **Entire Agreement**. This Agreement constitutes the entire agreement of the parties hereto withrespect to the subject matter hereof and supersedes all prior agreements,representations, undertakings and understandings, both written and oral,between Seller and Purchaser with respect to the subject matter hereof.

             SECTION 11.7.              **Assignment**. This Agreement may not be assigned by operation of Law or otherwise without theexpress written consent of Seller and Purchaser (which consent may be grantedor withheld in the sole discretion of Seller and Purchaser); provided, however,that Purchaser may assign this Agreement to an Affiliate of Purchaser withoutthe consent of Seller.

             SECTION 11.8.              **No Third Party Beneficiaries**. This Agreement shall be binding upon and inure solely to the benefit of theparties hereto and their permitted assigns and nothing herein, express orimplied, is intended to or shall confer upon any other Person, including,without limitation, any union or any employee or former employee of Seller, anylegal or equitable right, benefit or remedy of any nature whatsoever,including, without limitation, any rights of employment for any specifiedperiod, under or by reason of this Agreement.

             SECTION 11.9.              **Amendment**. Except as set forth in Section 5.14 and Section 8.2(n) hereof, this Agreementmay not be amended, modified or supplemented except (a) by an instrumentin writing signed by, or on behalf of, Seller and Purchaser or (b) by awaiver in accordance with Section 10.3.

             SECTION 11.10.            **Governing Law**. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY ANDPERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS OF EACH PARTY ARISING HEREUNDERSHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWSOF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS EXECUTED IN AND TO BEPERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOFREGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OFAMERICA.

             SECTION 11.11.            **Counterparts**. This Agreement may be executed in one or more counterparts, and by thedifferent parties hereto in separate counterparts, each of which when executedshall be deemed to be an original but all of which taken together shallconstitute one and the same agreement.

             SECTION 11.12.            **Specific Performance**. The parties hereto agree that irreparable damage would occur in the event anyprovision of this Agreement was not performed in accordance with the termshereof and that the parties shall be entitled to specific performance of theterms hereof, in addition to any other remedy at Law or equity, without thenecessity of demonstrating the inadequacy of money damages             IN WITNESS WHEREOF, Seller,Purchaser and Escrow Agent have caused this Agreement to be executed as of thedate first written above by their respective officers thereunto dulyauthorized.
|   | MEDIA  100, INC.                                                                                              |   |
|--------|---------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                                                          |   |
|   |                                                                                                          |   |
|   |                                                                                                               |   |
|   | John  A. Molinari                                                                                             |   |
|   | President  and Chief Executive Officer                                                                        |   |
|   |                                                                                                          |   |
|   | 290  Donald Lynch Boulevard                                                                                   |   |
|   | Marlboro,  MA 01752-4748                                                                                      |   |
|   | Attention:  Steven D. Shea, Chief Financial Officer                                                           |   |
|   | Telephone:  (508) 303-4800                                                                               |   |
|   | Telecopy:  (508) 303-4620                                                                                |   |
|   |                                                                                                          |   |
|   | AUTODESK,  INC.                                                                                               |   |
|   |                                                                                                          |   |
|   |                                                                                                          |   |
|   |                                                                                                               |   |
|   | Paul  Lypaczewski                                                                                             |   |
|   | Executive  Vice President                                                                                     |   |
|   |                                                                                                          |   |
|   | Autodesk,  Inc.                                                                                               |   |
|   | 111  McInnis Parkway                                                                                          |   |
|   | San  Rafael, CA 94304                                                                                         |   |
|   | Attention:  Marcia Sterling, Senior Vice President,  Business Development, General Counsel and Secretary |   |
|   | Telephone:  (415) 507-5000                                                                               |   |
|   | Telecopy:  (415) 507-5100                                                                                |   |
|   |                                                                                                          |   |
|   | COMPUTERSHARE  TRUST COMPANY, INC.                                                                            |   |
|   |                                                                                                          |   |
|   |                                                                                                          |   |
|   |                                                                                                               |   |
|   | John  M. Wahl, Trust Officer                                                                                  |   |
|   |                                                                                                          |   |
|   |                                                                                                          |   |
|   |                                                                                                               |   |
|   | Jennifer  Owens, Vice President                                                                               |   |
|   |                                                                                                          |   |
|   | Computershare  Trust Company, Inc.                                                                            |   |
|   | 12039  W. Alameda Parkway, Suite Z-2                                                                          |   |
|   | Lakewood,  CO 80228                                                                                           |   |
|   | Attention:  Corporate Trust                                                                              |   |
|   | Telephone:  (303) 984-4001                                                                               |   |
|   | Telecopy:  (303) 986-2444                                                                                |   |

** **

 

**EXHIBIT A**

**DESCRIPTION OF BUSINESS**

             Theportion of Seller’s business comprising (1) software for sequential imagecompression, encoding and transcoding, and (2) hardware independentsoftware for video editing, image manipulation and authoring, commonly referredto by Seller as its “Software Division.”

**EXHIBIT 1.1(a)**

**FORM OF ASSUMPTION AGREEMENT**

**EXHIBIT 1.1(b)**

**FORM OF BILL OF SALE ANDCONVEYANCE**

**EXHIBIT 2.1(a)**

**ASSETS**

**(not an exhaustive list ofassets purchased)**

•            Alltechnology related to any of the Cleaner product lines (including withoutlimitation, Cleaner 5, Cleaner XL and Cleaner Live), “Hitman”, Cinestream(EditDV), IntroDV and Eventstream, and any related software assets of Seller(and its subsidiaries) (including without limitation, all Eventstream exportersand Quicktime and other format exporters);

•            Allproduct lines and technology acquired from Terran Interactive, Inc. and DigitalOrigin, Inc. (“Terran and DO”), and any related software assets of Seller (andits subsidiaries) derived from such products or technology;

•            AllSeller’s (and its subsidiaries’) right title and interest in, to and under theOwned Intellectual Property and the Licensed Intellectual Property;

•            AllInventories related to the Business, which shall not constitute at least twomonths worth of Inventories;

•            Allrights relating to the Leased Real Property at San Luis Obispo;

•            Thegoodwill of Seller (and its subsidiaries) relating to the Business;

•            Allfurniture, fixtures, equipment, machinery and other tangible personal propertyused or held for use by Seller at the locations at which the Business is conducted;all books of account, general, financial, tax and personnel records, invoices,shipping records, supplier lists, correspondence and other documents, recordsand files and all computer software and programs and any rights thereto owned,associated with or employed by Seller or used in, or relating to, the Businessat the Closing Date maintained in the ordinary course of business at the LeasedReal Property; and a right to access such materials that are not maintained inthe ordinary course of business at such locations;

•            exceptfor the Excluded Assets, all claims, causes of action, choses in action, rightsof recovery and rights of set-off of any kind (including rights to insuranceproceeds and rights under and pursuant to all warranties, representations andguarantees made by suppliers of products, materials or equipment, or componentsthereof), pertaining to, arising out of, and enuring to the benefit of Seller;

•            All sales and promotionalliterature, customer lists (except for those relating also to other businessesof Seller) and other sales-related materials owned, used, associated with oremployed by Seller at the Closing Date and related to the Business;

•            A right to access customer listsrelating both to the Business and the other businesses of Seller;

•            Except for the Excluded Assets, allrights of Seller under all contracts, licenses, sublicenses, agreements,leases, commitments, and sales and purchase orders related to the Business, andunder all commitments, bids and offers (to the extent such offers aretransferable) related to the Business; and

•            All municipal, state and federalfranchises, permits, licenses, agreements, waivers and authorizations held orused by Seller in connection with, or required for, the Business, to the extenttransferable; and

**EXHIBIT 2.1(b)**

**EXCLUDED ASSETS**

•            the Purchase Price Bank Account;

•            Digital Media Press 1 and DigitalMedia Press 2 Circuit Boards for Cleaner Live and Cleaner Supercharger

•            “Griffin” Circuit Board

•            “softeffects” plug-ins; and

•            all rights of Seller under thisAgreement and the Ancillary Agreements

•            the consideration to be delivered tothe Seller under this Agreement

•            all shares of stock or otherinterest in subsidiaries of the Company

•            all cash, cash equivalents andsecurities

•            all accounts receivable, deposits orother amounts paid by or due from Customers relating to orders received andshipped before the Closing Date

•            organization documents, minute andstock record books and the corporate seat of Seller

•            all contracts not listed on Exhibit2.2(a) hereto

**EXHIBIT 2.2(a)**

**ASSUMED LIABILITIES**

***It isunderstood that Purchaser assumes the liabilities under the contracts listedbelow only to the extent that such liabilities arise after the Closing Date.***

**EXHIBIT 3.5**

**FINANCIAL INFORMATIONEXHIBIT 5.6**

**FORMS OF OEM AGREEMENTS**

**EXHIBIT 6.1(a)**

**KEY EMPLOYEES AND IDENTIFIEDEMPLOYEES**

**EXHIBIT 6.2(b)**

**FORM OF EMPLOYMENT ANDNON-COMPETITION AGREEMENT**

**EXHIBIT 8.1(h)**

**FORM OF OPINION OF PURCHASER’SCOUNSEL**

**EXHIBIT 8.2(f)**

**FORM OF OPINION OF SELLER’S COUNSEL**

With respect to any of the foregoingexhibits which are omitted, the Company agrees to furnish supplementally a copyof any omitted schedule to the Commission upon request.