Document:

Unassociated Document

    FIRST
      AMENDMENT TO LEASE

    

    FIRST
      AMENDMENT TO THAT CERTAIN LEASE
      AND
      ADDENDUM TO LEASE (“ADDENDUM TO LEASE”) DATED DECEMBER 15, 2000, BETWEEN GUITAR
      CENTER, INC., A DELAWARE CORPORATION, (“TENANT”), AND 5795 LINDERO CANYON, L.P.,
      SUCCESSOR IN INTEREST TO THE J. DAVID GLADSTONE INSTITUTES, A CHARITABLE TRUST
      (“LANDLORD”) (COLLECTIVELY “LEASE”)

    

    THIS
      FIRST AMENDMENT TO LEASE, dated for reference purposes only, May 15, 2007,
      (this
“Amendment”), is entered into between Landlord and Tenant, in light of the
      following facts:

    

    WHEREAS,
      Landlord and Tenant have previously entered into that certain Lease for the
      office building containing approximately 69,060 square feet, located at 5795
      Lindero Canyon Road, Westlake Village, California, 91362
      (“Premises”);

    

    WHEREAS,
      Landlord and Tenant have agreed to extend the term of the Lease upon the terms
      and conditions set forth herein; and

    

    WHEREAS,
      subject to the terms and conditions herein, Landlord and Tenant have agreed
      to
      so amend and modify the Lease.

     

    NOW,
      THEREFORE, in consideration of the above promises and mutual covenants,
      conditions and provisions contained herein, the parties hereto agree as
      follows:

    

    1. Defined
      Terms and Conditions.
      All
      initially capitalized terms used in this Amendment shall have the meaning
      ascribed thereto in the Lease unless specifically defined herein.

    

    2.
       Incorporation
      of Recitals.
      The
      recitals to this Amendment are an integral part hereof and are hereby
      incorporated herein verbatim as part of this Amendment as if set forth
      herein.

    

    3. Renewal
      Term.
      Paragraph 1.3 of the Lease is hereby amended to extend the Original Term of
      the
      Lease for an additional eight (8) years commencing April 15, 2009 and ending
      April 14, 2017 (such extended period, the “Original Term”). 

    

    4. Base
      Rent.
      Paragraph 1.5 of the Lease is hereby deleted in its entirety. Paragraph 7 of
      the
      Addendum to Lease is hereby modified as follows: 

    

    “Commencing
      upon April 15, 2009, the Base Rent for the remainder of the Original Term shall
      be $85,634.40 monthly, payable on the fifteenth (15th)
      day of
      each month. The Base Rent shall thereafter escalate 2.5% annually during the
      remainder of the Original Term as set forth below:

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    
      	
              Period

            	 	
              Monthly

            
	
              April
                15, 2009 - April 14, 2010

            	 	
              $85,634.40

            
	
              April
                15, 2010 - April 14, 2011

            	 	
              $87,775.26

            
	
              April
                15, 2011 - April 14, 2012

            	 	
              $89,969.64

            
	
              April
                15, 2012 - April 14, 2013

            	 	
              $92,218,88

            
	
              April
                15, 2013 - April 14, 2014

            	 	
              $94,524.35

            
	
              April
                15, 2014 - April 14, 2015

            	 	
              $96,887.46

            
	
              April
                15, 2015 - April 14, 2016

            	 	
              $99,309.65

            
	
              April
                15, 2016 - April 14, 2017

            	 	
              $101,792.38”

            
	 	 	 

    

    5. Security
      Deposit.
      The
      security deposit in the amount of $71,000, as set forth in Paragraph 1.7 of
      the
      Lease, shall be credited against Base Rent for the month of May 2009. Paragraph
      5 of the Lease is hereby deleted in its entirety.

    

    6.  Options.
      Paragraph 6 of the Addendum to Lease is hereby deleted in its entirety. The
      following paragraph shall be substituted in its place: 

    

    “Options.
      Landlord
      hereby grants to Tenant two (2) options to extend the Original Term of this
      Lease, the first for an additional five years (through April 14, 2022) and
      the
      second for an additional five years (through April 14, 2027) (each, an
“Extension Term”). The first Extension Term shall commence as of the end of the
      Original Term. To exercise an Extension Term, Tenant must give written notice
      of
      exercise to Landlord no later than the date which is nine (9) months prior
      to
      the expiration of the Original Term (July 14, 2016) or the first Extension
      Term
      (July 14, 2021), which ever the case may be. If Tenant properly and timely
      exercises an Extension Option, then the then current term shall be extended
      by
      the Extension Term and all terms and conditions of this Lease shall remain
      in
      full force and effect. The Base Rent for the first year of the Extension Term
      shall escalate by 2.5% over the previous year and shall thereafter escalate
      2.5%
      annually as set forth below:

    

    
      	
              First
                Extension Term

            	 	
              Monthly

            
	
              April
                15, 2017 - April 14, 2018

            	 	
              $104,337.18

            
	
              April
                15, 2018 - April 14, 2019

            	 	
              $106,945.60

            
	
              April
                15, 2019 - April 14, 2020

            	 	
              $109,619.24

            
	
              April
                15, 2020 - April 14, 2021

            	 	
              $112,359.72

            
	
              April
                15, 2021 - April 14, 2022

            	 	
              $115,168.71

            
	 	 	 
	
              Second
                Extension Term

            	 	
              Monthly

            
	
              April
                15, 2022 - April 14, 2023

            	 	
              $118,047.92

            
	
              April
                15, 2023 - April 14, 2024

            	 	
              $120,999.11

            
	
              April
                15, 2024 - April 14, 2025

            	 	
              $124,024.08

            
	
              April
                15, 2025 - April 14, 2026

            	 	
              $127,124.68

            
	
              April
                15, 2026 - April 14, 2027

            	 	
              $130,302.79”

            
	 	 	 

    

    7.
      Existing
      Equipment.
      Paragraph 5 of the Addendum to Lease is hereby deleted in its
      entirety.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    8. Assignment
      and Subletting.
      Paragraph 12.1 (a) of the Lease and Paragraph 20 of the Addendum to Lease are
      hereby deleted in their entirety. The following paragraph shall be substituted:
      

    

    “Tenant
      shall not voluntarily or by operation of law assign, transfer, mortgage or
      otherwise transfer or encumber (collectively, “Assignment”) or sublet all or any
      part of Tenant's interest in this Lease or in the Premises without Landlord's
      prior written consent given under and subject to the terms of Section 12 of
      the
      Lease. Notwithstanding anything contained herein to the contrary, Tenant may,
      without Landlord’s consent, assign this Lease or sublet all of the Premises or
      any portion thereof to: (i) any parent, subsidiary, or affiliate of Tenant;
      (ii)
      any successor to Tenant, by way of merger, reorganization, consolidation, sale
      of assets, sale of capital stock or the like; or (iii) an entity which controls,
      is controlled by, or is under common control with Tenant, provided, however,
      that in the event of an assignment: (a) the surviving entity assumes the Lease,
      and, in the case of an assignment or sublet, (b) Landlord receives notice of
      the
      assignment, or subletting, and a copy of the assignment and assumption
      agreement, or sublease.”

    

    
      	
              9.

            	
              Termination
                Right of First Refusal.
                The following new Paragraphs are added to the
                Lease:

            

    

    

    Paragraph
      51. Termination
      Right:
      Tenant
      shall have the right to terminate the Lease, by delivery of written notice
      to
      Landlord, at any time between June 1, 2011 to August 31, 2011. Additionally,
      Tenant shall have the right to terminate the Lease, by delivery of written
      notice to Landlord, at any time between September 1, 2013 and November 30,
      2013.
      Tenant shall provide nine (9) month’s written notice and shall pay an amount
      equal to the sum of three (3) months Base Rent, at the then current rental
      rate,
      and the unamortized portion based on a straight-line calculation of the
      brokerage commission as set forth in the broker commission agreement attached
      hereto as EXHIBIT
      A - COMMISSION AGREEMENT
      (“Commission Agreement”). Tenant’s rights to cancel shall be conditioned upon
      the City of Westlake Village (or other governmental agency) denying Tenant’s
      reasonable request for additional occupancy rights at 5775 Lindero Canyon
      Road.

    

    Paragraph
      52. Right
      of First Refusal.
      Subject
      to the terms of this Lease, if at any time during the Original Term and any
      subsequent renewal term, Landlord receives and desires to accept a bona fide
      third-party offer (i.e. a Letter of Intent or similar offer) to purchase the
      Premises, then Tenant shall have thirty (30) days following receipt from
      Landlord of a written itemization of the relevant terms relating to such
      third-party offer (the “Term Sheet”) in which to enter into a binding purchase
      and sale contract acceptable to the parties to purchase the Premises on the
      same
      economic terms and conditions as were contained in the Term Sheet, in addition
      to such other non-economic terms and conditions as may be acceptable to the
      parties, if any (the “Binding Agreement”). If, for any good faith reason
      (including, without limitation, the parties’ failure to agree upon the form of
      the Binding Agreement or any of the terms contained therein), the parties do
      not
      enter into a mutually acceptable Binding Agreement containing the economic
      terms
      set forth in the Term Sheet, within such thirty (30) day period, then Tenant
      will be deemed to have elected not to purchase the Premises on the terms
      contained in the Term Sheet. In such event, Landlord shall thereafter have
      one
      hundred eighty (180) days from the expiration of such thirty (30) day period
      in
      which to consummate the transaction with such third party or any other person
      or
      entity at a purchase price of not less than ninety-five percent (95%) of the
      purchase price contained in the Term Sheet. In the event Landlord fails to
      consummate the transaction within such one hundred eighty (180) day period,
      Tenant’s right of first refusal shall be restored. Tenant acknowledges and
      agrees that its right of first refusal to purchase the Premises contained in
      this Paragraph will not be triggered by the following events: (i) the assignment
      of the Lease by Landlord to an affiliate of Landlord, or (ii) transfers by
      and
      between or among shareholders, limited partners, general partners, or members
      of
      Landlord or any of the constituents thereof. To exercise its right, Tenant
      must,
      within the same thirty (30) day time period as above, deposit in escrow with
      Chicago Title in Westlake Village, California, all moneys and instruments
      required by the terms of the offer to be paid or delivered to Landlord on close
      of escrow and shall also give Landlord written notice of the deposit. In the
      event Tenant fails to exercise the option to purchase in accordance with the
      provisions of this Section, Landlord may sell the Premises to the third party
      making the offer on the same terms and conditions set forth in that offer.
      If
      for any reason the Premises are not sold to the party making the offer, Landlord
      shall give Tenant the same right to purchase the Premises on receiving any
      subsequent offer from any third party that is acceptable to Landlord. If this
      property is sold to any third party during the term of this lease, then the
      provisions of this section shall thereafter be of no further force or effect.
      Additionally, the transfer of Landlord’s title to the Premises resulting from
      Landlord’s death or by will or intestacy shall not be deemed to be a sale under
      the provisions of this Paragraph. 

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    10. Effectiveness.
      This
      Amendment may be executed in any number of counterparts, each of which when
      so
      executed and delivered shall be deemed an original. All of such counterparts
      shall constitute but one and the same instrument. This Amendment shall be
      effective, as of the date last executed below.

    

    11. No
      Further Amendments.
      Except
      as expressly modified and amended by this Amendment, the provisions of the
      Lease
      shall remain in full force and effect in accordance with its terms.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
      and delivered as of the date set forth below.

    

    
      	
              LANDLORD:

            	
              TENANT:

            
	
              5795
                LINDERO CANYON, L.P.

            	
              GUITAR
                CENTER, INC.,

            
	
               

            	
              a
                Delaware corporation 

            
	 	 
	 	 
	
              By:
                ___________________________

            	
              By:
                __________________________

            
	
              Name:

            	
                     
                Leland P. Smith

            
	
              Title:

            	
              Title:
                EVP & General Counsel

            
	
              Date:
                June 1, 2007

            	
              Date:
                June 1, 2007

            

    

    

    
      
         

      

      
        5AGREEMENT
      AND PLAN OF MERGER

    

    BY
      AND
      AMONG

    

    RADWARE,
      INC.,

    

    RADWARE,
      LTD.,

    

    RADWARE
      DELAWARE CORP.,

    

    COVELIGHT
      SYSTEMS, INC.,

    

    INTERSOUTH
      PARTNERS VI, LP, as a Sellers Representative,

    

    AURORA
      VENTURES IV, LLC, as a Sellers Representative,

    

    AND
      CERTAIN NOTEHOLDERS AND STOCKHOLDERS OF

    COVELIGHT
      SYSTEMS, INC.

    

    DATED
      AS
      OF APRIL 25, 2007

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibits
      and Annexes

    

    
      	Exhibit
              A	
              Form
                of Escrow Agreement

            

    

    
      	Exhibit
              B	
              Form
                of Opinion of Counsel

            

    

    

    
      	AnnexA	
              Flow
                of Funds

            

    

    

    
      	Schedule
              7.01	
              Company
                Required Consents

            

    

    
      	Schedule
              9.14	
              Knowledge

            

    

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    AGREEMENT
      AND PLAN OF MERGER

    

    AGREEMENT
      AND PLAN OF MERGER, dated as of April 25, 2007 (this “Agreement”),
      by
      and among Radware, Inc., a New Jersey corporation (“Radware”),
      which
      is a wholly-owned subsidiary of Radware, Ltd., an Israeli corporation
      (“Parent”),
      Radware Delaware Corp., a Delaware corporation and a wholly-owned subsidiary
      of
      Radware (“Merger
      Sub”),
      Covelight Systems, Inc., a Delaware corporation (the “Company”),
      with
      respect to Article VIII and Sections 2.07, 2.08, 9.03, 9.06 and 9.16, Intersouth
      Partners VI, LP and Aurora Ventures IV, LLC, as Sellers Representatives (the
      “Sellers
      Representatives”)
      and
      other persons listed on the signature pages hereto as stockholders of the
      Company (collectively the “Company
      Stockholders”)
      and
      the holders of the Company’s convertible promissory notes (collectively the
“Company
      Noteholders”).

    

    W
      I T N E
      S S E T H:

    

    WHEREAS,
      each of Radware, Merger Sub and the Company has determined that it is advisable
      and in the best interests of its shareholders and stockholders, respectively,
      for the parties to enter into a business combination upon the terms and subject
      to the conditions set forth herein;

    

    WHEREAS,
      in furtherance of such combination, the boards of directors of each of Merger
      Sub and the Company have approved, and the board of directors of Radware has
      authorized, the merger of Merger Sub with and into the Company (the
“Merger”)
      in
      accordance with the applicable provisions of the General Corporation Law of
      the
      State of Delaware (the “Delaware
      Law”),
      and
      upon the terms and subject to the conditions set forth herein;

    

    WHEREAS,
      the board of directors of the Company (the “Company
      Board”)
      has
      unanimously recommended that the stockholders of the Company approve and adopt
      this Agreement, the Merger and the other transactions contemplated hereby;
      and

    

    WHEREAS,
      concurrently with the execution and delivery of this Agreement and as a
      condition to Radware’s willingness to enter into this Agreement, the requisite
      number of the Company’s stockholders, in accordance with the Delaware Law, have
      approved this Agreement and the transactions contemplated hereby (the
“Approval”);

    

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual covenants and
      agreements herein contained, and intending to be legally bound hereby, the
      parties hereto agree as follows:

    

    ARTICLE
      I

    DEFINITIONS

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

    

    “Additional
      Investor Incentive Agreement Amount”
shall
      have the meaning set forth in Section
      2.08(b).

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

       

    

    “Additional
      Key Contributor Plan Amount”
shall
      have the meaning set forth in Section
      2.08(b).

    

    “Additional
      Payment”
shall
      have the meaning set forth in Section
      2.08(a).

    

    “affiliate”
means,
      with respect to any person, any other person who, directly or indirectly through
      one or more intermediaries, controls, is controlled by, or is under common
      control with the person specified.

    

    “Agreement”
shall
      have the meaning set forth in the preamble.

    

    “Ancillary
      Agreements”
means
      the Escrow Agreement and any note powers, stock powers and certificates required
      to be delivered under this Agreement.

    

    “Approval”
shall
      have the meaning set forth in the recitals.

    

    “Audited
      Financial Statements”
shall
      have the meaning set forth in Section
      3.07.

    

    “Basket
      Amount”
shall
      have the meaning set forth in Section
      8.04(a).

    

    “BB&T
      Revenue”
shall
      have the meaning set forth in Section
      2.08(a).

    

    “business
      day”
means
      any day other than a Saturday, Sunday or other day on which banks in New York
      City are required or authorized to be closed.

    

    “Certificate
      of Merger”
shall
      have the meaning set forth in Section
      2.02.

    

    “Claim”
shall
      have the meaning set forth in Section
      8.03(b).

    

    “Closing”
shall
      have the meaning set forth in Section
      2.01.

    

    “Closing
      Date”
shall
      have the meaning set forth in Section
      2.01.

    

    “Closing
      Date Purchase Price”
means
      Seven Million Five Hundred Thousand Dollars ($7,500,000) in cash.

    

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

    

    “Company”
shall
      have the meaning set forth in the preamble.

    

    “Company
      Board”
shall
      have the meaning set forth in the recitals.

    

    “Company
      By-Laws”
shall
      have the meaning set forth in Section
      3.02.

    

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

    

    “Company
      Certificate of Incorporation”
shall
      have the meaning set forth in Section
      3.02.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

    

    “Company
      Common Stock”
means
      the common stock, par value $0.001 per share, of the Company.

    

    “Company
      Disclosure Schedule”
shall
      have the meaning set forth in Article
      III.

    

    “Company
      Material Adverse Effect”
means
      a
      material adverse effect on or change to the business, operations, financial
      condition, assets, properties (including intangible properties) or liabilities
      of the Company, taken as a whole, excluding effects or changes (x) resulting
      from developments in worldwide, national or local conditions (political,
      economic or regulatory) that adversely affect enterprises or the Company’s
      industry generally and do not specifically relate to or have a materially
      disproportionate effect on the Company, taken as a whole or (y) resulting solely
      from the identity of the prospective purchaser of the Company or the
      announcement or pendency of the Merger.

    

    “Company
      Noteholders”
shall
      have the meaning set forth in the preamble.

    

    “Company
      Option Plan”
means
      the Company’s 2002 Stock Plan, as amended.

    

    “Company
      Permits”
shall
      have the meaning set forth in Section
      3.06(b).

    

    “Company
      Plan”
or
      “Company
      Plans”
shall
      have the meaning set forth in Section 3.11(a).

    

    “Company
      Preferred Stock”
means
      the Company’s preferred stock, par value $0.001 per share, of the
      Company.

    

    “Company
      Recipients”
means
      the Company Stockholders and Company Noteholders.

    

    “Company
      Required Consents”
shall
      have the meaning set forth in Section 3.05(b).

    

    “Company
      Software”
shall
      have the meaning set forth in Section
      3.17(l).

    

    “Company
      Recipient Indemnitees”
shall
      have the meaning set forth in Section
       8.02.

    

    “Company
      Stockholders”
shall
      have the meaning set forth in the preamble.

    

    “Confidential
      Information”
shall
      have the meaning set forth in Section
      6.01.

    

    “Confidentiality
      Agreement”
means
      the Mutual Nondisclosure Agreement dated as of November 9, 2006, as amended
      on
      January 18, 2007, between the Company and Parent.

    

    “control”
      (including the terms “controlled by” and “under common control with”) means the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management or policies of a person, whether through the
      ownership of voting securities or securities or debt convertible into voting
      securities, by contract or otherwise.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

       

    

    “Copyrights”
shall
      have the meaning set forth in Section
      3.17(a)(i).

    

    “Delaware
      Law”
shall
      have the meaning set forth in the recitals.

    

    “Domain
      Names”
shall
      have the meaning set forth in Section
      3.17(a)(iv).

    

    “Earn
      Out Resolution Period”
shall
      have the meaning set forth in Section
      2.08(c).

    

    “Effective
      Time”
shall
      have the meaning set forth in Section
      2.02.
      

    

    “Election
      Notice”
shall
      have the meaning set forth in Section
      8.03(b)(i).

    

    “Encumbrances”
means
      any lien (other than mechanics’ liens), pledge, hypothecation, claim (other than
      infringement), charge, mortgage, security interest, encumbrance, prior
      assignment, interference, option, right of first refusal, preemptive right,
      community property interest or restriction of any nature whatsoever (including
      any restriction on the voting of any security, any restriction on the transfer
      of any security or other asset, any restriction on the receipt of any income
      derived from any asset, any restriction on the use of any asset and any
      restriction on the possession, exercise or transfer of any other attribute
      of
      ownership of any asset).

    

    “Environmental
      Laws”
means
      any applicable foreign, federal, state or local law, rule, regulation,
      ordinance, code, order or judgment (including any written judicial or
      administrative interpretations, guidances, directives, policy statements or
      opinions) relating to human health and safety or, injury to, or the pollution
      or
      protection of, the environment.

    

    “Environmental
      Liabilities”
means
      any claims, judgments, damages (including punitive damages), losses, penalties,
      fines, liabilities, Encumbrances, violations, costs and expenses (including
      attorneys’ and consultants’ fees) of investigation, remediation, monitoring or
      defense of any matter relating to human health, safety or the environment of
      whatever kind or nature by any party, entity or authority, that arise under
      Environmental Laws or that are incurred as a result of (i) the existence of
      Hazardous Substances in connection with the operation of the business of the
      Company, (ii) the violation of or non-compliance with any Environmental
      Laws or (iii) exposure to any Hazardous Substances.

    

    “ERISA”
shall
      have the meaning set forth in Section
      3.11(a).

    

    “ERISA
      Affiliate”
shall
      have the meaning set forth in Section
      3.11(a).

    

    “Escrow
      Agent”
shall
      have the meaning set forth in Section
      2.09(a).

    

    “Escrow
      Agreement”
shall
      have the meaning set forth in Section
      2.09(a).

    

    “Escrow
      Amount”
means
      Seven Hundred Fifty Thousand Dollars ($750,000).

    

    “Escrow
      Indemnity Account”
shall
      have the meaning set forth in Section
      2.09(a).

    

    “Escrow
      Release Amount”
shall
      have the meaning set forth in Section
      2.09(a).

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

       

    

    “Escrow
      Termination Date”
shall
      have the meaning set forth in Section
      2.09(a).

    

    “Existing
      Options”
means
      all options to purchase capital stock of the Company granted pursuant to the
      Company Option Plan or pursuant to any other arrangement adopted by the Company
      Board to provide options or other rights to purchase capital stock of the
      Company to directors, officers, employees or consultants of the
      Company.

    

    “Extinguished
      Stock”
shall
      have the meaning in Section
      2.06(f).

    

    “Financial
      Statements”
shall
      have the meaning set forth in Section
      3.07.

    

    “First
      Anniversary Date”
shall
      have the meaning set forth in Section
      2.08(a).

    

    “GAAP”
means
      United States generally accepted accounting principles.

    

    “Governmental
      Entity”
means
      any foreign or United States federal, state or local governmental,
      administrative or regulatory authority, commission, body, agency, court or
      any
      judicial body or other similar authority.

    

    “Hazardous
      Substances”
means
      any chemicals, substances, materials or wastes regulated under any Environmental
      Law.

    

    “Inflight
      and Percept Product Lines”
means
      the Inflight and Percept product lines of the Surviving Corporation, including
      any product line extensions, improvements, derivative or additional products
      developed using the technology, intellectual property or engineering team of
      the
      Company as constituted prior to the Closing.

    

    “Initial
      Investor Incentive Agreement Amount”
shall
      have the meaning set forth in Section
      2.07(b)(i).

    

    “Initial
      Key Contributor Plan Amount”
shall
      have the meaning set forth in Section
      2.07(a)(i).

    

    “Intellectual
      Property”
shall
      have the meaning set forth in Section
      3.17(a).

    

    “Interim
      Escrow Release”
shall
      have the meaning set forth in Section
      2.09(a).

    

    “Interim
      Financial Statements”
shall
      have the meaning set forth in Section
      3.07.

    

    “Inventions”
shall
      have the meaning set forth in Section
      3.17(a)(vi).

    

    “Investor
      Incentive Agreement”
means
      the Covelight Systems, Inc. Amended and Restated Investor Incentive Bonus
      Agreement, dated as of February 20, 2007, by and among the Company and certain
      of the Company Stockholders.

    

    “Investor
      Incentive Agreement Recipients”
means
      the persons so designated as set forth on Annex A
      hereto,
      each of whom has been so designated in accordance with the terms of the Investor
      Incentive Agreement.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

       

    

    “IRS”
shall
      have the meaning set forth in Section
      3.11(d).

    

    “JAMS”
means
      Judicial Arbitration and Mediation Services.

    

    “Key
      Contributor Plan”
means
      the Amended and Restated Covelight Systems, Inc. Key Contributor Incentive
      Plan,
      effective as of August 15, 2006.

    

    “Key
      Contributor Plan Participants”
means
      the persons so designated as set forth on Annex A
      hereto,
      each of whom has been so designated in accordance with the terms of the Key
      Contributor Plan.

    

    “Laws”
shall
      have the meaning set forth in Section
      3.06(a).

    

    “License”
shall
      have the meaning set forth in Section
      3.17(c).

    

    “Losses”
shall
      have the meaning set forth in Section
      8.01.

    

    “Material
      Contracts”
shall
      have the meaning set forth in Section
      3.18.

    

    “Merger
      Sub”
shall
      have the meaning set forth in the preamble.

    

    “Net
      Aggregate Merger Consideration”
means
      the Closing Date Purchase Price, minus (x) the Transaction Expenses and the
      Initial Key Contributor Plan Amount and the Initial Investor Incentive Agreement
      Amount plus (y) the Additional Payment. The Noteholder Consideration and the
      Stockholder Consideration together shall equal the Net Aggregate Merger
      Consideration.

    

    “Net
      Revenues”
means
      the revenues recognized in accordance with GAAP from the sale, license,
      maintenance, support or other transactions associated with the Inflight and
      Percept Product Lines, minus (x) any credits, returns and allowances for bad
      or
      doubtful accounts and (y) an amount equal to all accounts receivable relating
      to
      the Inflight and Percept Product Lines which, as of the First Anniversary Date,
      are outstanding for over one hundred twenty (120) days; provided
      that for purposes of this Agreement, VSOE (vendor specific objective evidence)
      will not exceed 20% of price list per contract year and maintenance revenue
      will
      be recognized ratably over the life of the maintenance term.

    

    “Neutral
      Firm”
shall
      have the meaning set forth in Section
      2.08(c).

    

    “Noteholder
      Consideration”
means
      the amounts paid to the holders of the Notes as set forth on Annex
      A.

    

    “Notes”
means
      the outstanding convertible promissory notes in the aggregate principal amount
      of $4,125,000 issued by the Company in favor of the Company
      Noteholders.

    

    “Notice
      Date”
shall
      have the meaning set forth
      in
Section
      2.08(b).

    

    “Parent”
shall
      have the meaning set forth in the preamble.

    

    “Patents”
shall
      have the meaning set forth in Section
      3.17(a)(ii).

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

       

    

    “Payment
      Calculator”
shall
      have the meaning set forth in Section
      2.13.

    

    “Permitted
      Encumbrances”
shall
      have the meaning set forth in Section
      3.19.

    

    “person”
means
      a
      natural person, a governmental entity, agency or representative (at any level
      of
      government), a corporation, partnership, joint venture or other association,
      as
      context requires.

    

    “Pro
      Rata Interest”
means,
      with respect to a Company Recipient, a fraction, the numerator of which is
      the
      aggregate portion of the Net Aggregate Merger Consideration that such holder
      receives hereunder and the denominator of which is the Net Aggregate Merger
      Consideration received by all Company Recipients.

    

    “Proceeding”
means
      any claim, action, suit, investigation, arbitration, litigation or other
      proceeding.

    

    “PTO”
shall
      have the meaning set forth in Section
      3.17(g)(i).

    

    “Radware”
shall
      have the meaning set forth in the preamble.

    

    “Radware
      Disclosure Schedule”
shall
      have the meaning set forth in Article V.

    

    “Radware
      Indemnitees”
shall
      have the meaning set forth in Section
      8.01.

    

    “Related
      Party”
shall
      have the meaning set forth in Section
      3.21(a).

    

    “Rights
      Agreements”
shall
      have the meaning set forth in Section
      4.01.

    

    “Sellers
      Representative”
shall
      have the meaning set forth in Section
      9.16(a).

    

    “Software”
shall
      have the meaning set forth in Section
      3.17(a)(vii).

    

    “Stockholder
      Consideration”
means
      the amounts to be paid to the Company’s stockholders set forth on Annex
      A.

    

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

    

    “Surviving
      Corporation”
shall
      have the meaning set forth in Section
      2.01.

    

    “Surviving
      Corporation Common Stock”
shall
      have the meaning set forth in Section
      2.06(b).

    

    “Tax”
or
      “Taxes”
means
      (i) all taxes, including, but not limited to, income (whether net or
      gross), excise, real or personal property, sales, transfer, gains, gross
      receipts, occupation, privilege, payroll, wage, unemployment, workers’
compensation, social security, occupation, use, value added, capital, gross
      receipts, franchise, license, severance, stamp, premium, windfall profits,
      environmental (including taxes under Code Sec. 59A), capital stock, profits,
      withholding, disability, registration, customs duties, alternative or add-on
      minimum, estimated or other tax of any kind whatsoever (whether disputed or
      not)
      imposed by any Tax Authority, including any related charges, fees, interest,
      penalties, additions to tax or other assessments imposed with respect thereto
      and (ii) any liability of the Company for the payment of amounts of the
      type described in clause (i) as a result of any obligation of the Company under
      any tax sharing or tax indemnity agreement, provision or arrangement, whether
      formal or informal or under Treasury Regulations § 1.1502-6 or similar
      provisions under state, local or non-U.S. law.

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

       

    

    “Tax
      Authority”
means
      any federal, national, foreign, state, municipal or other local government,
      or
      any subdivision, agency, commission or authority thereof, or any
      quasi-governmental body or other authority exercising any regulatory authority
      with respect to Taxes.

    

    “Tax
      Proceeding”
means
      any audit or investigation, other administrative proceeding or judicial
      proceeding involving Taxes.

    

    “Tax
      Reserve”
means,
      with respect to the Company, (i) the amount of current Taxes (excluding any
      provision for deferred Taxes) reflected as a liability on the Unaudited Balance
      Sheet, as defined in Section
      3.07,
      and
      (ii) any additional Taxes accrued in the ordinary course of business between
      the
      date of the Unaudited Balance Sheet and the close of the Closing Date, to the
      extent the Taxes referred to in clause (i) or clause (ii) have not been paid
      prior to the Closing Date.

    

    “Tax
      Returns”
means
      all returns, reports, estimates, information returns and statements (including
      any related or supporting information) filed or to be filed with any Tax
      Authority in connection with the determination, assessment, collection or
      administration of any Taxes.

    

    “Third-Party
      Claims”
shall
      have the meaning set forth in Section
      8.03(b).

    

    “Third-Party
      Software”
shall
      have the meaning set forth in Section
      3.17(l).

    

    “Timely
      Dispute Notice”
shall
      have the meaning set forth in Section
      2.08(b).

    

    “Trade
      Secrets”
shall
      have the meaning set forth in Section
      3.17(a)(v).

    

    “Trademarks”
shall
      have the meaning set forth in Section
      3.17(a)(iii).

    

    “Transaction
      Expenses”
means
      the amount of all unpaid attorneys’, investment bankers’ and accountants’ fees
      and expenses and other similar fees and expenses incurred or to be incurred
      by
      the Company in connection with the transactions contemplated by this Agreement.
      All Transaction Expenses, including the name of the party and the amount due
      as
      of the Closing shall be set forth on Annex
      A
      attached
      hereto.

    

    “Treasury
      Shares”
shall
      have the meaning set forth in Section
      2.06(a).

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

       

    

    “Treasury
      Regulations”
mean
      the final Regulations and Temporary Regulations promulgated under the Code,
      as
      currently in effect, as such regulations may hereafter be amended from time
      to
      time (including corresponding provisions of succeeding
      regulations).

    

    “Unaudited
      Balance Sheet”
shall
      have the meaning set forth in Section
      3.07.

    

    ARTICLE
      II

    THE
      MERGER

     

    SECTION
      2.01 The
      Merger.
      Upon
      the terms and subject to the conditions set forth in this Agreement and the
      Certificate of Merger, and in accordance with the Delaware Law, at the Effective
      Time, Merger Sub shall be merged with and into the Company. As a result of
      the
      Merger, the separate corporate existence of Merger Sub shall cease and the
      Company shall continue as the surviving corporation of the Merger (the
“Surviving
      Corporation”)
      and
      shall succeed to and assume all the rights and obligations of Merger Sub in
      accordance with the Delaware Law. Subject to the terms of this Agreement, the
      consummation of the Merger (the “Closing”)
      will
      take place as promptly as practicable (and in any event within two (2) business
      days) after delivery of the items set forth in Article
      VII,
      at the
      offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas,
      New York, New York 10036, unless another date, time or place is agreed to in
      writing by Radware and the Company (the “Closing
      Date”).

     

    SECTION
      2.02 Effective
      Time.
      On the
      Closing Date, the parties hereto shall file a certificate of merger (the
“Certificate
      of Merger”)
      with
      the Secretary of State of the State of Delaware, in such form as required by,
      and executed in accordance with the relevant provisions of, the Delaware Law.
      The Merger shall become effective at such time as the Certificate of Merger
      is
      duly filed with such Secretary of State, or at such other time as Radware and
      the Company shall agree and specify in the Certificate of Merger (the time
      the
      Merger becomes effective being the “Effective
      Time”).

     

    SECTION
      2.03 Effect
      of the Merger.
      At the
      Effective Time, the effect of the Merger shall be as provided in this Agreement,
      the Certificate of Merger and the applicable provisions of the Delaware Law.
      Without limiting the generality of the foregoing, at the Effective Time all
      the
      property, goodwill, rights, privileges, powers and franchises of the Company
      and
      Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities
      and duties of the Company and Merger Sub shall become the debts, liabilities
      and
      duties of the Surviving Corporation.

     

    SECTION
      2.04 Certificate
      of Incorporation; By-Laws.

    

    (a) At
      the
      Effective Time, the certificate of incorporation of Merger Sub shall be the
      certificate of incorporation of the Surviving Corporation.

    

    (b) At
      the
      Effective Time, the by-laws of Merger Sub shall be the by-laws of the Surviving
      Corporation.

     

    SECTION
      2.05 Directors
      and Officers.
      The
      directors of Merger Sub immediately prior to the Effective Time shall be the
      initial directors of the Surviving Corporation and the persons designated by
      Radware shall be the initial officers of the Surviving Corporation.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

       

    

    SECTION
      2.06 Effect
      on Capital Stock Payment.
      At the
      Effective Time, by virtue of the Merger and without any action on the part
      of
      any Company Stockholder or the holder of any shares of the capital stock of
      Merger Sub:

    

    (a) Company
      Treasury Shares.
      Each
      share of Company Common Stock held by the Company as treasury stock and each
      share of Company Preferred Stock held by the Company as treasury stock
      immediately prior to the Effective Time (collectively, “Treasury
      Shares”)
      shall
      automatically be canceled and retired and cease to exist, and no consideration
      or payment shall be delivered therefor or in respect thereof.

    

    (b) Capital
      Stock of Merger Sub.
      Each
      share of capital stock of Merger Sub issued and outstanding immediately prior
      to
      the Effective Time shall be converted into one share of common stock, par value
      $0.001 per share, of the Surviving Corporation (“Surviving
      Corporation Common Stock”),
      with
      the same rights, powers and privileges as the shares so converted and shall
      constitute the only outstanding shares of capital stock of the Surviving
      Corporation. Each stock certificate of Merger Sub evidencing ownership of any
      such shares shall remain outstanding and evidence ownership of shares of
      Surviving Corporation Common Stock.

    

    (c) Existing
      Options.
      Radware
      is not assuming any Existing Options in the Merger, and all of the Existing
      Options shall be cancelled and terminated, and be of no further force or effect
      from and after the Closing without payment of consideration
      therefor.

    

    (d) Derivative
      Securities.
      Each
      Company Recipient agrees that any derivative securities of the Company it holds
      other than the Notes and the Company Preferred Stock (including but not limited
      to warrants) shall be cancelled and terminated and be of no further force or
      effect from and after the Closing without
      payment of consideration therefor.

    

    (e) Notes.
      Title
      to each of the Notes will be transferred to Radware upon Closing in exchange
      for
      the Noteholder Consideration, free and clear of all Encumbrances.

    

    (f) Outstanding
      Company Common Stock and Company Preferred Stock.
      Each
      share of Company Common Stock issued and outstanding immediately prior to the
      Effective Time and each share of Company Preferred Stock issued and outstanding
      immediately prior to the Effective Time (other than Treasury Shares) shall
      be
      cancelled and extinguished (the “Extinguished
      Stock”)
      and
      thereafter shall represent the right to receive the Stockholder
      Consideration.

    

    (g) Payment
      of Closing Purchase Price.
      On the
      Closing Date, Radware will pay the Closing Date Purchase Price as set forth
      on
Annex
      A
      by check
      or wire transfer of immediately available U.S. funds.

    

    (h) Capital
      Transaction Nature of the Purchase of the Notes.
      Each
      party hereto agrees that Radware is purchasing the Notes and will treat such
      purchase as a capital transaction. 

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

       

    

    SECTION
      2.07 Effect
      on Incentive Plans.

    

    (a) Key
      Contributor Plan.

    

    (i) On
      the
      Closing Date, pursuant to the Key Contributor Plan, each of the Key Contributor
      Plan Participants shall receive the amounts set forth opposite his, her or
      its
      name on Annex
      A
      attached
      hereto (collectively, the “Initial
      Key Contributor Plan Amount”),
      which
      amounts Radware shall pay to the Key Contributor Plan Participants.

    

    (ii) If
      an
      Additional Payment is payable to the Company Recipients pursuant to Section
      2.08(d),
      Radware
      shall pay the Additional Key Contributor Plan Amount to the Key Contributor
      Plan
      Participants, allocated as set forth on Annex
      A,
      at the
      same time that the Additional Payment is required to be made pursuant to
Section
      2.08,
      and the
      amount of the Additional Payment shall be net of the Additional Key Contributor
      Plan Amount. In the event any Additional Key Contributor Plan Amount is
      undesignated as to the recipient at the time of payment, the Sellers
      Representatives shall provide Radware with the names and amounts of the
      recipients.

    

    (b) Investor
      Incentive Agreement.
      

    

    (i) On
      the
      Closing Date, pursuant to the Investor Incentive Agreement, each of the Investor
      Incentive Agreement Recipients shall receive the amounts set forth opposite
      his,
      her or its name on Annex
      A
      attached
      hereto (collectively, the “Initial
      Investor Incentive Agreement Amount”),
      which
      amounts Radware shall pay to the Investor Incentive Agreement
      Recipients.

    

    (ii) If
      an
      Additional Payment is payable to the Company Recipients pursuant to Section
      2.08(d),
      Radware
      shall pay the Additional Investor Incentive Agreement Amount to the Investor
      Incentive Agreement Recipients, allocated as set forth on Annex
      A,
      at the
      same time that the Additional Payment is required to be made pursuant to
Section
      2.08,
      and the
      amount of the Additional Payment shall be net of the Additional Investor
      Incentive Agreement Amount. In the event any Additional Investor Incentive
      Agreement Amount is undesignated as to the recipient at the time of payment,
      the
      Sellers Representatives shall provide Radware with the names and amounts of
      the
      recipients.

     

    SECTION
      2.08 Additional
      Payment.

    

    (a) Additional
      Payment.
      Subject
      to the terms and conditions set forth in this Section
      2.08
      and this
      Agreement, Radware shall make a payment to the Company Recipients as follows:
      a
      one-time cash payment (the “Additional
      Payment”)
      equal
      to that positive number representing the sum of (i) the product of two
      multiplied by the Net Revenues recognized by the Inflight and Percept Product
      Lines during the twelve (12)
      months beginning April 1, 2007 and ending March 31, 2008 (the “First
      Anniversary Date”)
      (including Net Revenues recognized during April and prior to
      Closing),
      minus
      (ii) Seven Million Five Hundred Thousand Dollars ($7,500,000); provided
      that
(x)
      the
      Additional Payment shall be reduced by the Additional Key Contributor Plan
      Amount and the Additional Investor Incentive Agreement Amount, respectively
      and
      (y)
      the sum
      of (1) the Additional Payment, (2) the Additional Key Contributor Plan Amount
      and (3) the Additional Investor Incentive Agreement Amount
      shall
      not exceed Eight Million Five Hundred Thousand Dollars ($8,500,000). The Company
      has sold certain products to BB&T Corporation and has received payment but
      has not yet recognized the revenues under GAAP for accounting purposes (the
      “BB&T
      Revenue”).
      In
      the event that (i) Parent does not recognize the BB&T Revenue as part of its
      net revenues for accounting purposes during the period
      beginning on the date hereof and ending March 31, 2008,
      then
      the BB&T Revenue shall not constitute Net Revenues and (ii) Parent does
      recognize all or part of the BB&T Revenue as part of its net revenues for
      accounting purposes during the period
      beginning on the date hereof and ending March 31, 2008,
      then
      the BB&T Revenue, to the extent so recognized by Parent, shall constitute
      Net Revenues.

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

       

    

    (b) Additional
      Payment and Dispute Notice by the Company Recipients.
      Within
      forty five (45) days of the First Anniversary Date, Radware shall provide the
      Sellers Representatives with its calculation of the Additional Payment, the
      additional amounts that shall be payable to the Key Contributor Plan
      Participants pursuant to the terms of the Key Contributor Plan (collectively,
      the “Additional
      Key Contributor Plan Amount”)
      and
      the additional amounts that shall be payable to the Investor Incentive Agreement
      Recipients pursuant to the terms of the Investor Incentive Agreement
      (collectively, the “Additional
      Investor Incentive Agreement Amount”)
      (the
      date on which such notice is delivered, the “Notice
      Date”).
      Unless both Sellers Representatives deliver a Dispute Notice (a
      “Timely
      Dispute Notice”)
      to
      Radware on or prior to thirty (30) days following the Notice
      Date (the “Dispute
      Notice Date”),
      the
      Company Recipients shall be deemed to have accepted and agreed to Radware’s
      determination of the Additional Payment, the Additional Key Contributor Plan
      Amount and the Additional Investor Incentive Agreement Amount, if any, that
      is
      payable to the Company Recipients, the Key Contributor Plan Participants and
      the
      Investor Incentive Agreement Recipients, respectively.

    

    (c) Disputes.
      If the
      Sellers Representatives timely provide a Dispute Notice to Radware, the
      representatives of Radware and both Sellers Representatives shall, within thirty
      (30) days following the date of the Dispute Notice (the “Earn
      Out Resolution Period”),
      attempt in good faith to resolve their differences and any resolution by them
      that is agreed by the parties in writing shall be final, binding and conclusive.
      In connection with any such dispute, each party will cooperate with the other
      party to attempt to resolve such dispute including making available to such
      other parties personnel, books and records, material and other information
      reasonably requested for making determinations as to the dispute and related
      computations. If at the conclusion of the Earn Out Resolution Period there
      are
      amounts remaining in dispute, then all amounts remaining in dispute shall be
      submitted for resolution to a recognizable, reputable and impartial certified
      public accounting firm that is mutually acceptable to Radware and both Sellers
      Representatives (the “Neutral
      Firm”).
      If
      Radware and both Sellers Representatives cannot agree upon a Neutral Firm within
      ten (10) days, a mediator selected by JAMS at the request of the parties shall
      choose a recognized, reputable, and impartial certified public accounting firm
      to act as the Neutral Firm. The Neutral Firm shall promptly resolve the amounts
      remaining in dispute between the parties and shall, within thirty (30) days
      of
      its engagement, deliver its determination of the amounts remaining in dispute
      in
      writing to Radware and the Sellers Representatives, which determination shall
      be
      final, binding and conclusive. The fees and expenses of the Neutral Firm shall
      be shared by Radware, on the one hand, and the Company Recipients, on the other
      hand, in inverse proportion to the relative amounts of the disputed amounts
      determined in favor of Radware, on the one hand, and the Company Recipients,
      on
      the other hand, respectively.

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

       

    

    (d) Payment
      of Additional Payment.
      Within
      ten (10) days of the final determination of the amounts of the Additional
      Payment, the Additional Key Contributor Plan Amount and the Additional Investor
      Incentive Agreement Amount in accordance with this Section
      2.08,
      Radware
      shall, in reliance on certifications received from all of the Company
      Recipients, the Key Contributor Plan Participants and the Investor Incentive
      Agreement Recipients, (i) pay the Company Recipients the Additional Payment
      pursuant to Section
      2.06(f);
      (ii)
      pay the Key Contributor Plan Participants the Additional Key Contributor Plan
      Amount pursuant to Section
      2.07(a)(ii);
      and
      (iii) pay the Investor Incentive Agreement Recipients the Additional Investor
      Incentive Agreement Amount pursuant to Section
      2.07(b)(ii).
      Upon
      payment of these amounts, Radware shall receive a binding acknowledgement
      executed by each of the Company Recipients, the Key Contributor Plan
      Participants and the Investor Incentive Agreement Recipients, respectively,
      acknowledging that they have each received any and all proceeds that they are
      entitled to pursuant to this Agreement. Notwithstanding the foregoing, in the
      event that amounts are released from escrow pursuant to Section
      2.09(a),
      an
      amount equal to the Escrow Release Amount shall be withheld from the Additional
      Payment until the later of (x) the Escrow Termination Date and (y) if at the
      Escrow Termination Date there are any then pending and unresolved claims for
      indemnification under Article
      VIII,
      then
      the final resolution of such claims (to the extent of such claims) and the
      withheld amounts shall be applied in accordance with Article
      VIII.

    

    (e) Price
      Protection.
      Radware
      and Parent shall adhere to their ordinary course pricing policies in the sale
      of
      any product in the Inflight or Percept Product Line, and will not alter their
      pricing practices in order to reduce the amount of the Additional Payment due
      under this Agreement. In addition, Radware and Parent agree that in the event
      of
      the sale of any Radware or Parent products bundled with a product in the
      Inflight or Percept Product Line, the percentage of list price discount applied
      to the product in the Inflight or Percept Product Line will not exceed the
      percentage of list price discount applied to the Radware or Parent
      product.

     

    SECTION
      2.09 Escrow
      Accounts.

    

    (a) At
      the
      Effective Time, Radware shall deliver from the Net Aggregate Merger
      Consideration to the escrow agent (the “Escrow
      Agent”),
      (i)
      under the escrow agreement dated the Closing Date, in substantially the form
      attached as Exhibit
      A
      hereto
      (the “Escrow
      Agreement”),
      the
      Escrow Amount to be held in an escrow account (the “Escrow
      Indemnity Account”)
      in
      accordance with the terms of the Escrow Agreement. The Escrow Amount will be
      available to satisfy claims for Losses made by the Radware Indemnitees pursuant
      and subject to Article
      VIII
      hereof.
      Unless all of the Escrow Amount is released earlier to a Radware Indemnitee
      pursuant to the Escrow Agreement, the Escrow Amount (or any portion thereof
      remaining in the Escrow Indemnity Account) will be held by the Escrow Agent
      until the first anniversary of the Closing Date (the “Escrow
      Termination Date”).
      Upon
      the Escrow Termination Date, Radware shall cause any amount remaining in the
      Escrow Indemnity Account at such time to be paid to the Company Recipients
      in
      accordance with Annex
      A.
      Notwithstanding the foregoing, 

    

    (x)
      to
      the extent that any then pending and unresolved claims for indemnification
      under
Article
      VIII
      exist
      for which Radware has timely provided notice in accordance with Section
       8.04(d),
      the
      funds reasonably necessary to satisfy such claims will be retained by the Escrow
      Agent pursuant to the terms of the Escrow Agreement until such claims are
      resolved in accordance with the terms thereof and the terms of this Agreement;
      and

    

    
      
         

      

      
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    (y)
      (1)
      on a date that is forty five (45) days following the six (6) month anniversary
      of the Closing Date, the parties shall release from escrow, for payment in
      accordance with Annex
      A,
      an
      amount, if any, equal to seventy five percent (75%) of the Additional Payment
      that is anticipated to be due based on the revenues recognized from the Inflight
      and Precept Product Lines during the six (6) months following the Closing Date
      as set forth in the quarterly revenue update delivered by Radware pursuant
      to
Section
      9.17
      (such
      amount, if any, the “Interim
      Escrow Release”)
      and
      (2) following the final determination of the Additional Payment pursuant to
      Section
      2.08,
      the
      parties shall release from escrow, for payment in accordance with Annex
      A,
      an
      amount, if any, equal to the difference between (i) Additional Payment finally
      determined to be due pursuant to Section
      2.08
      and (ii)
      the Interim Escrow Release (such amount, together with the Interim Escrow
      Release, the “Escrow
      Release Amount”);
      provided in each of the cases of clauses (1) and (2), that there are not
      outstanding at such time and pending any unresolved claims for indemnification
      under Article
      VIII.

    

    (b) On
      or
      immediately prior to the Closing Date, the Company shall deliver to Radware
      a
      statement of all Transaction Expenses, including final invoices for any hourly
      or similar unfixed Transaction Expenses being presented by vendors immediately
      prior to Closing. At or as soon as practicable after the Effective Time, Radware
      shall pay the Transaction Expenses (the aggregate amount of which shall reduce
      the Closing Date Purchase Price) to the parties to whom such Transaction
      Expenses are payable.

     

    SECTION
      2.10 Surrender.

    

    (a) Each
      holder of Notes or shares of Company Common Stock or Company Preferred Stock
      shall, at Closing, surrender to Radware the Notes or applicable certificate
      or
      certificates representing such shares of Company Common Stock or Company
      Preferred duly endorsed for transfer or accompanied by appropriate undated
      note
      powers or stock powers, as the case may be, transferring such securities to
      Radware.

    

    (b) After
      the
      Effective Time, there shall be no further registration of transfers of shares
      of
      Company Capital Stock outstanding prior to the Effective Time. If, after the
      Effective Time, certificates representing shares of Company Capital Stock
      outstanding prior to the Effective Time are presented to the Surviving
      Corporation, they shall be cancelled and exchanged for the applicable
      Stockholder Consideration, and in accordance with the procedures set forth
      in
      this Agreement.

    

    (c) If
      any of
      the Notes or Company Common Stock or Company Preferred Stock certificates shall
      have been lost, stolen or destroyed, the holder thereof shall deliver in
      exchange for such lost, stolen or destroyed certificates, upon the making of
      an
      affidavit of that fact by the holder thereof, the applicable portion of such
      holder’s Net Aggregate Merger Consideration; provided,
      however, that Radware may, in its discretion and as a condition precedent to
      the
      issuance and delivery thereof, require the owner of such lost, stolen or
      destroyed certificates to deliver a reasonable and customary indemnity as it
      may
      reasonably direct against any claim that may be made against Radware or the
      Company with respect to such certificates alleged to have been lost, stolen
      or
      destroyed.

    

    
      
         

      

      
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    (d) To
      the
      extent permitted by applicable Law, none of Radware, Parent, Merger Sub, the
      Company or the Surviving Corporation shall be liable to any holder of Notes,
      Company Common Stock or Company Preferred Stock for any portion of the Net
      Aggregate Merger Consideration required to be delivered to a public official
      pursuant to any applicable abandoned property, escheat or similar
      law.

    

    (e) Each
      of
      Radware and the Surviving Corporation shall be entitled to deduct and withhold
      from the portion of the Net Aggregate Merger Consideration otherwise payable
      to
      Company Stockholders, Company Noteholders, Investor Incentive Agreement
      Recipients and Key Contributor Plan Participants such amounts as it is required
      to deduct and withhold with respect to the making of such payment under the
      Code
      or any provision of state, local, provincial or foreign tax law. To the extent
      that amounts are so withheld, such withheld amounts shall be treated for all
      purposes of this Agreement as having been paid to the holder of Company
      Preferred Stock in respect of which such deduction and withholding was
      made.

     

    SECTION
      2.11 Dissenting
      Shares.
      Each
      Company Stockholder will have waived any appraisal rights under Delaware law
      in
      connection with the Merger prior to the Closing Date.

    

    SECTION
      2.12 Further
      Action.
      If, at
      any time after the Effective Time, any further action is necessary or desirable
      to carry out the purposes of this Agreement and to vest the Surviving
      Corporation with full right, title and possession to all assets, property,
      rights, privileges, powers and franchises of the Company and Merger Sub, the
      officers and directors of the Company and Merger Sub are fully authorized in
      the
      name of their respective corporations or otherwise to take, and will take,
      all
      such lawful and necessary action.

    

    SECTION
      2.13 Annex
      A.
      The
      hardcopy version of Annex
      A
      attached
      hereto reflects payment of the maximum Additional Payment and no claims against
      the Escrow Amount. The Company shall attach a sealed envelope to each copy
      of
      this Agreement containing the spreadsheets used to generate Annex
      A
      (the
“Payment
      Calculator”)
      and at
      the appropriate time shall input the actual Additional Payment and the amount
      released from the escrow to generate a final revised Annex
      A.

    

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

    

    The
      Company represents and warrants to Radware, Parent and Merger Sub as of the
      date
      hereof that the statements contained in this Article
      III
      are true
      and correct, except as set forth in the disclosure schedule delivered by the
      Company to Radware on the date hereof (the “Company
      Disclosure Schedule”).
      The
      Company Disclosure Schedule shall be arranged in paragraphs corresponding to
      the
      numbered and lettered paragraphs in this Article
      III
      and the
      disclosure in any paragraph shall qualify other paragraphs in this Article
      III
      only to
      the extent that it is specifically indicated in such paragraph.

     

    
      
         

      

      
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    SECTION
      3.01 Organization
      and Qualification; Subsidiaries.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and has the requisite corporate power
      and authority necessary to own, lease and operate the properties it owns, leases
      or operates and to carry on its business as it is now being conducted. The
      Company does not have any subsidiaries. The Company is duly qualified or
      licensed as a foreign corporation to do business, and is in good standing,
      in
      each jurisdiction where the character of its properties owned, leased or
      operated by it or the nature of its activities makes such qualification or
      licensing necessary, except for such failures to be so duly qualified or
      licensed and in good standing that would not have, individually or in the
      aggregate, a Company Material Adverse Effect. Each jurisdiction in which the
      Company is so qualified or licensed is set forth in Section
      3.01
      of the
      Company Disclosure Schedule. The Company does not own, directly or indirectly,
      any equity or similar interest in, or any interest convertible into or
      exchangeable or exercisable for any equity or similar interest in, any
      corporation, partnership, joint venture, limited liability company or other
      business association or entity, whether incorporated or
      unincorporated.

     

    SECTION
      3.02 Certificate
      of Incorporation and By-Laws.
      The
      Company has previously furnished to Radware a complete and correct copy of
      its
      Amended and Restated Certificate of Incorporation (as amended and restated,
      the
“Company
      Certificate of Incorporation”)
      and
      By-Laws (the “Company
      By-Laws”),
      each
      as amended to date. Such Company Certificate of Incorporation and Company
      By-Laws are in full force and effect. The Company is not in violation of any
      of
      the provisions of the Company Certificate of Incorporation or Company
      By-Laws.

     

    SECTION
      3.03 Capitalization.

    

    (a) The
      authorized capital stock of the Company consists of 8,000,000 shares of Company
      Common Stock and 4,275,627 shares of Company Preferred Stock, par value $0.001
      per share. As of the date hereof, (i) 1,307,652 shares of Company Common
      Stock are issued and outstanding, (ii)  938,733 shares of Company
      Common Stock are reserved for issuance pursuant to outstanding Existing Options,
      (iii) 100,000 shares of Company Common Stock are reserved for issuance pursuant
      to outstanding warrants, and (iv) 4,275,627 shares of Company Preferred
      Stock are issued and outstanding. As of the date hereof, Notes in the aggregate
      principal amount of $4,125,000 are issued and outstanding. As of the date
      hereof, there are no other shares of Company Capital Stock issued and
      outstanding or reserved for future issuance.

    

    All
      of
      the issued and outstanding shares of Company Capital Stock are duly authorized,
      validly issued, fully paid and non-assessable. None of the issued and
      outstanding shares of Company Capital Stock has been issued in violation of
      the
      Company Certificate of Incorporation, any applicable federal or state Law or
      any
      preemptive rights or rights to subscribe for or purchase securities. Except
      as
      set forth in the Rights Agreements, this Section
      3.03
      or
Section
      3.11
      hereof,
      there are no options, convertible notes, warrants, calls or preemptive rights
      relating to the issued or unissued capital stock of the Company or obligating
      the Company to issue, transfer, deliver or sell, or cause to be issued,
      transferred, delivered or sold, any shares of capital stock of, or any
      securities directly or indirectly convertible into or exercisable or
      exchangeable for any shares of capital stock of, the Company. The Company does
      not have issued and outstanding any stock appreciation rights, phantom stock,
      performance based rights or similar rights or obligations. There are no
      obligations, contingent or otherwise, of the Company to repurchase, redeem
      or
      otherwise acquire any shares of capital stock of the Company or to provide
      funds
      to or make any investment (in the form of a loan, capital contribution or
      otherwise) in the Company or any other entity. Except as set forth in the Rights
      Agreements, there are no voting trusts, proxies or other agreements or
      understandings with respect to any Company Capital Stock to which the Company
      or, to the knowledge of the Company, any other person is a party or by which
      the
      Company or any such other person is bound.

    

    
      
         

      

      
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    (b) Section
      3.03(b)
      of the
      Company Disclosure Schedule lists (i) all holders of Company Capital Stock
      as of
      the date hereof, as well as the number, class and series of shares of Company
      Capital Stock held by each such holder and (ii) all holders of
      Notes.

    

    (c) Section
      3.03(c)
      of the
      Company Disclosure Schedule sets forth a true and complete list of each current
      or former employee, officer, director or consultant of the Company or other
      person who holds an Existing Option as of the date hereof, together with the
      number of shares of Company Common Stock subject to such Existing Option. As
      of
      the Closing Date, in accordance with the terms and conditions of the Company
      Option Plan, all of the Existing Options shall be cancelled and terminated,
      and
      be of no further force or effect from and after the Closing.

    

    (d) Except
      for accrued dividends on the Company Preferred Stock set forth in Section
      3.03(d)
      of the
      Company Disclosure Schedule, the Company has never declared, nor is there
      accrued, any dividend or other distribution with respect to any class or series
      of Company Capital Stock.

    

    (e) Upon
      payment of the Closing Date Purchase Price as provided for in this Agreement,
      the Company Stockholders, Company Noteholders and the optionholders of the
      Company will have no further right or claim against the Company, Radware, Merger
      Sub or the Surviving Corporation or any of their respective directors, officers,
      employees, agents or advisors, for any amount owing to such noteholders,
      stockholders or optionholders (i) in their capacity as noteholders, stockholders
      and optionholders of the Company, (ii) pursuant to the Company Certificate
      of
      Incorporation or Company By-Laws or the Delaware Law, (iii) relating to or
      in
      connection with this Agreement, the Merger or the other transactions
      contemplated hereby or (iv) pursuant to the Key Contributor Plan or the Investor
      Incentive Agreement, other than the right to receive the Escrow Amount, the
      Additional Payment, the Additional Key Contributor Amount and the Additional
      Investor Incentive Amount in accordance with this Agreement.

     

    SECTION
      3.04 Authority
      Relative to this Agreement; Corporate Action.
      (a) The
      Company has all necessary corporate power and authority to execute and deliver
      this Agreement and each of the Ancillary Agreements to which it is a party
      and
      to perform its obligations hereunder and thereunder and to consummate the
      transactions contemplated hereby and thereby. The execution and delivery of
      this
      Agreement and the Ancillary Agreements to which it is a party by the Company
      and
      the consummation by the Company of the transactions contemplated hereby and
      thereby have been duly and validly authorized by all necessary corporate action
      on the part of the Company. This Agreement and the Ancillary Agreements to
      which
      the Company is a party have been duly and validly executed and delivered by
      the
      Company and, assuming the due authorization, execution and delivery of this
      Agreement and the Ancillary Agreements by each of the other parties hereto
      and
      thereto, constitutes, or, in the case of the Ancillary Agreements to which
      it is
      a party have been or, if executed after the date hereof and at or prior to
      the
      Effective Time, will constitute, legal, valid and binding obligations of the
      Company, enforceable against the Company in accordance with their respective
      terms, except as the same may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting the enforcement of
      creditors’ rights generally and general equitable principles regardless of
      whether such enforceability is considered in a proceeding at law or in
      equity.

    

    
      
         

      

      
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    (b) Necessary
      Actions; Notice. The Company has taken all necessary steps so that all
      corporate actions, proceedings, instruments, and documents required to carry
      out
      the transactions contemplated hereby or incidental hereto and all other related
      legal matters are reasonably satisfactory to, and has furnished Radware’s
      counsel with, such certified copies of such corporate actions and proceedings
      and such other instruments and documents as Radware’s counsel shall have
      reasonably requested.

    

    (c) The
      Second Global Amendment to Secured Convertible Promissory Notes, entered into
      as
      of April 19, 2007, by and among the Company and the Company Noteholders, has
      been duly and validly executed and delivered by the parties thereto and
      constitutes the legal, valid and binding obligation of the Company, enforceable
      in accordance with its terms.

     

    SECTION
      3.05 No
      Conflict; Required Filings and Consents.

    

    (a) The
      execution and delivery of this Agreement and the Ancillary Agreements to which
      it is a party by the Company do not, and the performance of this Agreement
      and
      the Ancillary Agreements to which it is a party by the Company and the
      consummation by the Company of the transactions contemplated hereby and thereby
      will not, (i) conflict with or violate the Company Certificate of
      Incorporation or Company By-Laws, (ii) conflict with or violate any Law
      applicable to the Company or by which any of its properties or operations is
      bound or affected, (iii) conflict with, result in any breach of, or
      constitute a default (or an event that with notice or lapse of time or both
      would become a default) under, or impair the Company’s rights or alter the
      rights or obligations of any third party under, or give to others any rights
      of
      termination, amendment, acceleration or cancellation of, or result in the
      creation of an Encumbrance on any of the properties or assets of the Company
      pursuant to, any material note, bond, mortgage, indenture, contract, agreement,
      lease, license, permit, franchise or other instrument or obligation to which
      the
      Company is a party or by which the Company, or any of its properties, is bound,
      except, in the cases of clauses (ii) and (iii), as would not have a Company
      Material Adverse Effect.

    

    (b) Except
      as
      set forth in Section
      3.05(b)
      of the
      Company Disclosure Schedule (the “Company
      Required Consents”)
      the
      execution and delivery of this Agreement and the Ancillary Agreements to which
      it is a party by the Company do not, and the performance of this Agreement
      and
      the Ancillary Agreements to which it is a party by the Company and the
      consummation by the Company of the transactions contemplated hereby and thereby
      will not, require the Company to obtain any waiver, consent, approval,
      authorization or permit of, or make any filing with or notification to, any
      Governmental Entity or other third party, except (i) the filing of the
      Certificate of Merger as required by the Delaware Law and (ii) where the failure
      to obtain such consents, approvals, authorizations or permits, or to make such
      filings or notifications, would not prevent or delay consummation of the Merger,
      or otherwise prevent or delay the Company from performing its obligations under
      this Agreement.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

       

    

    SECTION
      3.06 Compliance,
      Permits.

    

    (a) The
      Company and its properties and operations, are and since inception have been
      in
      compliance with all foreign, federal, state and local statutes, laws, rules,
      regulations, ordinances, orders, judgments, decrees and other authorizations
      and
      approvals of Governmental Entities (collectively, “Laws”),
      applicable to the Company or by which any of its properties or operations is
      bound except as would not have a Company Material Adverse Effect. The Company
      has not received any notice or other communication (whether written or oral)
      from any Governmental Entity regarding any actual, alleged, possible or
      potential violation of, or any failure to comply with, any Law.

    

    (b) The
      Company possesses all permits, licenses, consents, franchises, orders,
      approvals, certifications, registrations and authorizations from Governmental
      Entities necessary to enable it to continue to own, lease, operate and use
      its
      assets and properties and conduct its business as presently conducted
      (collectively, the “Company
      Permits”)
      except
      as would not have a Company Material Adverse Effect. All of the Company Permits
      are valid and in full force and effect, and the Company has no reason to believe
      that any Governmental Entity will revoke, cancel, rescind, refuse to renew
      in
      the ordinary course or modify any of the Company Permits, nor is any proceeding
      pending for any such purpose except as would not have a Company Material Adverse
      Effect. The Company is in compliance in all material respects with the terms
      of
      the Company Permits and with all material requirements, standards and procedures
      of the Governmental Entities that issued them, and with any limitation on any
      Company Permit.

     

    SECTION
      3.07 Financial
      Statements.
      Attached as Section
      3.07
      of the
      Company Disclosure Schedule are (i) the unaudited consolidated balance sheet
      of
      the Company as of March 31, 2007 (the “Unaudited
      Balance Sheet”)
      and
      the related consolidated statements of income, cash flows and changes in
      stockholders’ equity for the ten (10) months then ended (the “Interim
      Financial Statements”),
      and
      (ii) the audited consolidated balance sheet of the Company as of May 31, 2006
      and the related consolidated statements of income, cash flows and changes in
      stockholders’ equity for the year then ended, accompanied by the report of the
      Company’s independent public accountants thereon (the “Audited
      Financial Statements”
and,
      together with the Interim Financial Statements, the “Financial
      Statements”).
      Each
      of the Financial Statements (including, in each case, the related notes thereto)
      was prepared in accordance with the books and records of the Company and in
      accordance with GAAP applied on a consistent basis throughout the periods
      involved (except as may be indicated therein or in the notes thereto) and is
      true and correct, and each fairly presents in all material respects the
      consolidated financial position of the Company as at the respective dates
      thereof and the consolidated results of its operations and cash flows for the
      periods indicated, except that the Interim Financial Statements are subject
      to
      normal and recurring year-end adjustments which will not be material in amount
      and such Interim Financial Statements and may not contain all notes required
      by
      GAAP.

     

    
      
         

      

      
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    SECTION
      3.08 Absence
      of Certain Changes or Events.
      Since
      the date of the Unaudited Balance Sheet, the Company has conducted its business
      in the ordinary course consistent with past practice and there has not been:
      (i) any Company Material Adverse Effect; (ii) any damage to,
      destruction or loss of any material assets of the Company (whether or not
      covered by insurance); (iii) any revaluation by the Company of any of its
      assets, including, without limitation, writing down the value of capitalized
      software or inventory or writing off notes or accounts receivable, other than,
      in each case, in the ordinary course of business; (iv) any transaction,
      commitment, contract or agreement entered into by the Company requiring the
      Company to pay, or any relinquishment by the Company of any contract or other
      right, in any case having a value of or involving aggregate payments or value
      in
      excess of Twenty Five Thousand Dollars ($25,000) other than in the ordinary
      course of business; (v) any material adverse change in any customer,
      supplier, licensee or licensor relationship, including any cancellation,
      termination or adverse modification or, threatened cancellation, termination
      or
      adverse modification of any such relationship; or (vi) any grant of any
      severance or termination pay to any Company employee or consultant or any
      increase in the rate or terms of compensation payable or to become payable
      by
      the Company to any of its employees or consultants or any increase in the rate
      or terms of any bonus, pension or other employee benefit plan covering any
      of
      the Company’s employees (including any new or amended employment, consulting or
      other compensation agreement).

     

    SECTION
      3.09 No
      Undisclosed Liabilities.
      The
      Company does not have any liabilities (absolute, accrued, contingent or
      otherwise) whether or not required to be disclosed in the Financial Statements,
      except liabilities (i) provided for in the Unaudited Balance Sheet,
      (ii) incurred in the ordinary course of business and consistent with past
      practice and that could not reasonably be expected to have a Company Material
      Adverse Effect, or (iii) set forth in Section
      3.09
      of the
      Company Disclosure Schedule.

     

    SECTION
      3.10 Absence
      of Litigation.
      Except
      as set forth in Section
      3.10
      of the
      Company Disclosure Schedule, there are no claims, actions, suits, proceedings
      or
      investigations pending or, to the knowledge of the Company, threatened against
      the Company, or any properties of the Company, or, to the knowledge of the
      Company, against any officers, directors or employees of the Company in their
      capacity as such, before any arbitrator or arbitral forum or tribunal or
      Governmental Entity. None of the Company, any of its properties or, to the
      knowledge of the Company, any of the Company’s officers, directors or employees
      in their capacity as such is subject or party to any judgment, order, decree
      or
      other direction of, or stipulation with, any Governmental Entity.

     

    SECTION
      3.11 Employee
      Benefit Plans; Employment Agreements.

    

    (a) Section
      3.11(a)
      of the
      Company Disclosure Schedule sets forth a true and complete list of all “employee
      benefit plans” within the meaning of Section 3(3) of the Employee Retirement
      Income Security Act of 1974, as amended (“ERISA”),
      and
      any other bonus, profit sharing, compensation, pension, severance, deferred
      compensation, fringe benefit, insurance, welfare, post-retirement, health,
      life,
      stock option, stock purchase, restricted stock, tuition refund, service award,
      company car, scholarship, relocation, disability, accident, sick, vacation,
      holiday, termination, unemployment, individual employment, consulting, executive
      compensation, incentive, commission, payroll practices, retention, change in
      control, non-competition and other plans, agreements, policies, trust funds
      or
      arrangements (whether written or unwritten, insured or self-insured, domestic
      or
      foreign) (1) established, maintained, sponsored or contributed to (or with
      respect to which there is any obligation to contribute) by the Company or any
      entity that would be deemed a “single employer” with the Company under Section
      414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA (an “ERISA
      Affiliate”)
      or on
      behalf of any employee, officer, director, consultant or stockholder of the
      Company (whether current, former or retired) or their beneficiaries or
      (2) with respect to which the Company or any ERISA Affiliate has or has had
      any obligation on behalf of any such employee, officer, director, consultant,
      stockholder or beneficiary (each a “Company
      Plan”
and,
      collectively, the “Company
      Plans”).
      

    

    
      
         

      

      
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    (b) With
      respect to each Company Plan, the Company has delivered to Radware true,
      accurate and complete copies of each of the following: (i) the plan document
      together with all amendments thereto or a written summary of all material plan
      terms in the case of an unwritten plan, (ii) to the extent applicable, any
      trust
      agreements, custodial agreements, insurance policies, administrative agreements
      and similar agreements, and investment management or investment advisory
      agreements, (iii) the summary plan description, employee handbooks and
      similar employee communications, (iv) to the extent applicable, the most recent
      determination letter from the IRS and any related correspondence, and any
      pending request for such determination, (v) to the extent applicable, the three
      most recently filed Forms 5500, with schedules attached.

    

    (c) No
      Company Plan (i) is subject to, and no circumstances exist under which the
      Company could have any material liability under, Section 412 of the Code,
      Section 302 of ERISA or Title IV of ERISA; (ii) that is a welfare plan is funded
      through a “welfare benefit fund” within the meaning of Section 419 of the Code;
      (iii) provides or promises welfare benefits after the termination of employment
      or other service, except as required by applicable Law; (iv) is funded
      through a trust intended to meet the requirements of Section 501(c)(9) of the
      Code; (v) is subject to the laws of a jurisdiction outside of the United
      States; or (vi) is a nonqualified employee pension benefit plan, deferred
      compensation plan or excess benefit plan.

    

    (d) (i) Each
      Company Plan intended to qualify under Section 401(a) of the Code is so
      qualified and has either received a favorable determination letter from the
      United States Internal Revenue Service (the “IRS”)
      or is
      in a prototype or voluntarily submitted plan form that has been pre-approved
      by
      the IRS and that covers all tax law changes prior to the Economic Growth and
      Tax
      Relief Reconciliation Act of 2001 and nothing has occurred or, to the knowledge
      of the Company, is expected to occur through the date of the Effective Time
      that
      could cause the loss of such qualification or the imposition of any material
      penalty or material tax liability; (ii) all payments required to be made
      with respect to a Company Plan, whether under the terms of such plan, a
      collective bargaining agreement, insurance policy, other agreement, or by law,
      have been made on or before the applicable due date or have been provided for
      by
      the Company in accordance with the provisions of such Company Plan, applicable
      Law and GAAP; (iii) no claim, lawsuit, arbitration or other action has been
      asserted, instituted or, to the knowledge of the Company, is threatened or
      anticipated against any Company Plan (other than routine claims for benefits
      and
      appeals of such claims), any trustee or fiduciaries thereof, the Company, any
      ERISA Affiliate, any director, officer or employee thereof, or any of the assets
      of any trust of any Company Plan; (iv) each Company Plan complies in all
      material respects with and has been maintained and operated, in all material
      respects, in accordance with its terms and applicable Law, including, without
      limitation, ERISA and the Code; (v) no non-exempt “prohibited transaction,”
within the meaning of Section 4975 of the Code and Section 406 of ERISA, has
      occurred with respect to a Company Plan; (vi) no Company Plan is under, and
      the Company has not received any notice of, an audit or investigation by the
      IRS, U.S. Department of Labor or any other Governmental Entity and no such
      completed audit, if any, has resulted in the imposition of any tax or penalty;
      and (vii) with respect to each Company Plan that is funded wholly or
      partially through an insurance policy, neither the Company nor any ERISA
      Affiliate has any material liability in the nature of retroactive rate
      adjustment, loss sharing arrangement or other actual or contingent liability
      arising wholly or partially out of events occurring on or before the date of
      this Agreement or is reasonably expected to have such liability with respect
      to
      periods through the Effective Time.

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

       

    

    (e) Neither
      the Company, nor any director, officer or employee of the Company (including
      any
      ERISA Affiliate thereof) has made any promise or commitment, whether or not
      legally binding, to create any new Company Plan, or to modify or amend any
      existing Company Plan. No event, condition or circumstance exists (or will
      exist
      following and as a result of the consummation of the transactions contemplated
      hereby) that (i) would reasonably be expected to result in a material increase
      of the benefits provided under any Company Plan or the expense of maintaining
      any Company Plan from the level of benefits or expense incurred for the most
      recent fiscal year ended before the Effective Time or (ii) would limit the
      right
      of the Company to amend, merge or terminate any Company Plan or its related
      trust. 

    

    (f) The
      Company does not have, and no circumstances exist under which the Company would
      reasonably be expected to have, any liability for the misclassification of
      employees as independent contractors, leased employees or otherwise, or vice
      versa.

    

    (g) Except
      as
      set forth on Section
      3.12(g)
      of the
      Company Disclosure Schedule, the consummation of the transactions contemplated
      by this Agreement, either alone or in combination with any other event, will
      not
      give rise to any liability under any Company Plan, including, without
      limitation, liability for severance or termination pay, unemployment
      compensation or withdrawal liability, or accelerate the time of payment or
      vesting or increase the amount of compensation or benefits due to any employee,
      director or stockholder of the Company (whether current, former or retired)
      or
      their beneficiaries, except that vesting of certain of the Existing Options
      may
      be accelerated.

     

    SECTION
      3.12 Employees;
      Labor Matters.

    

    (a) No
      employee or former employee of the Company is owed any wages, benefits or other
      compensation for past services (other than wages, benefits and compensation
      accrued in the ordinary course of business during the current pay period and
      accrued vacation).

    

    (b) There
      are
      no labor disputes, including, without limitation, charges of unfair labor
      practices within the meaning of the National Labor Relations Act, pending or,
      to
      the knowledge of the Company, threatened against the Company. The Company has
      and is not knowingly engaged in any unfair labor practices within the meaning
      of
      the National Labor Relations Act. The Company is not presently a party to,
      bound
      by, or in the process of negotiating any collective bargaining agreement or
      union contract. No organizing activities are presently being made or, to the
      knowledge of the Company, are anticipated by or on behalf of any labor union
      with respect to any employees of the Company. There are no strikes, slowdowns,
      work stoppages, picketing or lockouts pending or, to the knowledge of the
      Company, threatened, by or with respect to any employees of the Company, and
      there have been no such strikes, slowdowns, work stoppages, picketing or
      lockouts within the past two (2) years. The Company is in material compliance
      with all applicable Laws relating to employment and employment practices,
      workers’ compensation, terms and conditions of employment, worker safety, wages
      and hours and the Worker Adjustment and Retraining Notification Act. There
      has
      been no harassment, discrimination, retaliatory act or similar claim against
      any
      officer, director or employee of the Company at any time during the past two
      (2)
      years.

     

    
      
         

      

      
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    SECTION
      3.13 Restrictions
      on Business Activities.
      Other
      than this Agreement, there is no non-competition or similar agreement,
      commitment, judgment, injunction, order or decree binding upon the Company
      which
      has the effect of prohibiting or impairing any business operations of the
      Company as currently conducted. The Company has not entered into any agreement
      under which it is restricted from selling, licensing or otherwise distributing
      any of its technology or products, or providing services to, customers or
      potential customers, in any geographic area, during any period of time or any
      segment of the market or line of business.

     

    SECTION
      3.14 Taxes.
      Except
      as set forth in Section
      3.14
      of the
      Company Disclosure Schedule:

    

    (a) All
      Tax
      Returns required to be filed on or before the date hereof by, or with respect
      to, the Company have been filed when due. All such Tax Returns were prepared
      in
      compliance with all applicable laws and regulations and accurately reflect
      in
      all material respects the Taxes due with respect to such Tax Returns. All Taxes
      (whether or not shown on any Tax Return) owed by, or with respect to, the
      Company on or before the date hereof, have been timely paid, except those,
      if
      any, which are presently being contested in good faith (which are set forth
      on
Section
      3.14
      of the
      Company Disclosure Schedule) and for which exist adequate Tax Reserves. The
      Company has provided to Radware, for the last three (3) taxable years, copies
      of
      all income or franchise Tax Returns, including amendments thereto, of the
      Company. The Company also has provided to Radware copies of all examination
      reports and statements of deficiencies assessed with respect to the Company
      for
      the last three (3) taxable years.

    

    (b) No
      Tax
      Proceeding is currently being conducted with respect to the Company, no issues
      that had been raised in writing by a Tax Authority are pending, no information
      related to Tax matters has been requested of the Company by any Tax Authority
      that the Company has failed to provide and the Company has not received
      notification from any Tax Authority that it intends to commence a Tax Proceeding
      with respect to the Company. All deficiencies asserted or assessments made
      as a
      result of any Tax Proceeding have been paid in full. Any adjustment of Taxes
      of
      the Company made by the Internal Revenue Service in any Tax Proceeding, which
      adjustment is required to be reported to the appropriate state, local or foreign
      Tax Authority, has been so reported.

    

    
      
         

      

      
        24

        
          

        

      

      
         

      

       

    

    (c) There
      are
      no agreements for the extension or waiver of the time for assessment of any
      Taxes relating to the Company. There are no liens other than liens for Taxes
      not
      yet due and payable.

    

    (d) No
      claim
      has been made in writing by any Tax Authority in a jurisdiction where the
      Company does not file Tax Returns that the Company is or may be subject to
      taxation by that jurisdiction.

    

    (e) The
      Company is not a party to any joint venture, partnership, or other arrangement
      or contract which is treated as a partnership for federal income tax
      purposes.

    

    (f) The
      Company is not a party to any arrangement that would result in the payment
      of
      any “excess parachute payment”, as defined in Section 280G of the Code
      (determined without regard to subsection (b)(4)(B) thereof).

    

    (g) The
      Company is not a party to, is not bound by, and does not have any obligation
      under any Tax sharing or Tax indemnification agreement, provision or
      arrangement, whether formal or informal. No power of attorney, which is
      currently in effect, has been granted with respect to any matter relating to
      Taxes of the Company.

    

    (h) The
      Company is not required to include any adjustment in taxable income under
      Section 481 of the Code (or any similar provision of the Tax laws of any
      jurisdiction) as a result of any change in method of accounting or otherwise.
      No
      application is pending with respect to the Company with any Tax Authority
      requesting permission for any change in accounting method.

    

    (i) All
      Taxes
      the Company is or was obligated to withhold from amounts owing or paid to any
      past or present employee, shareholder, creditor or other party have been
      withheld and remitted to the appropriate Tax Authority within the time required
      by law.

    

    (j) The
      amount of Taxes (excluding any provision for deferred Taxes) reflected as a
      liability on the Unaudited Balance Sheet is a full and adequate reflection
      of
      the amount of accrued and unpaid Taxes with respect to the Company for all
      periods through the date of the Unaudited Balance Sheet for which Tax Returns
      have not been filed and, since the date of the Unaudited Balance Sheet, the
      Company has not incurred or accrued any liability for Taxes of any nature
      (matured, unmatured, fixed or contingent) except for those Taxes incurred or
      accrued in the ordinary course of business of the Company.

    

    (k) There
      are
      no Tax rulings specifying the Company, requests for rulings or closing
      agreements relating to the Company which could affect the Company’s liability
      for Taxes after the Closing Date.

    

    (l) The
      Company does not own any interest in real property in any jurisdiction in which
      a Tax is imposed on the transfer of a controlling interest in an entity that
      owns any interest in real property.

    

    (m) Section
      3.14(m)
      of the
      Company Disclosure Schedule sets forth a list of all jurisdictions to which
      any
      Tax is properly payable by, or with respect to, the Company.

    

    
      
         

      

      
        25

        
          

        

      

      
         

      

       

    

    (n) The
      Company does not have any corporate acquisition indebtedness as described in
      Section 279 of the Code.

    

    (o) The
      Company has not engaged in any “reportable transaction,” as such term is defined
      in Treasury Regulations Section 1.6011-4(b).

     

    SECTION
      3.15 Environmental
      Matters.
      Except
      as set forth in Section
      3.15
      of the
      Company Disclosure Schedule and except as would not, individually or in the
      aggregate, have a Company Material Adverse Effect:

    

    (a) The
      operations of the Company have been and are currently being conducted in
      compliance in all material respects with all applicable Environmental Laws,
      and
      the Company is not aware of the existence of any condition or event that would
      give rise to material liability on the part of the Company under applicable
      Environmental Laws.

    

    (b) The
      Company has not contractually, by operation of law or otherwise, assumed or
      succeeded to any material Environmental Liabilities of any predecessors or
      any
      other person or entity.

    

    (c) The
      Company has not received any written notice from any Governmental Entity or
      third party asserting any liability under or violation of any Environmental
      Laws
      that remains outstanding or unresolved.

     

    SECTION
      3.16 Brokers.
      Other
      than the amount set forth on Annex
      A
      as part
      of the Transaction Expenses, no broker, finder or investment banker is entitled
      to any brokerage, finder’s or other fee or commission in connection with the
      transactions contemplated by this Agreement based upon arrangements made by
      or
      on behalf of the Company.

     

    SECTION
      3.17 Intellectual
      Property.

    

    (a) “Intellectual
      Property”
means
      all intellectual property owned, used or licensed (as licensor or licensee)
      by
      the Company, including:

    

    (i) all
      domestic and foreign copyright interests in any original work of authorship,
      whether registered or unregistered, including but not limited to all copyright
      registrations or foreign equivalent, all applications for registration or
      foreign equivalent, all moral rights, and all rights to register and obtain
      renewals and extensions of copyright registrations, together with all other
      copyright interests accruing by reason of international copyright convention
      (“Copyrights”);

    

    (ii) all
      domestic and foreign patents (including certificates of invention and other
      patent equivalents), provisional applications, patent applications and patents
      issuing therefrom as well as any division, continuation or continuation in
      part,
      reissue, extension, reexamination, certification, revival or renewal of any
      patent (“Patents”);

    

    (iii) all
      domestic and foreign trademarks, trade dress, service marks, trade names, icons,
      logos, slogans, and any other indicia of source or sponsorship of goods and
      services, designs and logotypes related to the above, in any and all forms,
      all
      trademark registrations and applications for registration related to such
      trademarks (including, but not limited to intent to use applications), and
      all
      goodwill related to the foregoing (“Trademarks”);

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

       

    

    (iv) all
      domain name registrations (“Domain
      Names”);

    

    (v) any
      formula, design, device, database or compilation, or other information which
      is
      used or held for use by a business, which gives the holder thereof an advantage
      over competitors which do not have or use the same, and which is not generally
      known by the public. Trade Secrets can include, by way of example, formulas,
      algorithms, market surveys, market research studies, information contained
      on
      drawings and other documents, and information relating to research, development
      or testing (“Trade
      Secrets”);

    

    (vi) novel
      devices, processes, compositions of matter, methods, techniques, know how,
      discoveries and apparatuses or machines, whether or not patentable
      (“Inventions”);

    

    (vii) (A)
      any
      and all computer programs and/or software programs (including all source code,
      object code, firmware, programming tools and/or documentation), (B) machine
      readable databases and compilations, including any and all data and collections
      of data, and (C) all content contained on Internet site(s) (“Software”);
      

    

    (viii) all
      documentation and media constituting, describing or relating to the above,
      including memoranda, manuals, technical specifications and other records
      wherever created throughout the world; and

    

    (ix) the
      right
      to sue for past, present, or future infringement and to collect and retain
      all
      damages and profits related to the foregoing.

    

    (b) Section
      3.17(b)
      of the
      Company Disclosure Schedule lists (i) all issued Patents, and all pending
      applications for Patents, owned by the Company; (ii) all registered Trademarks,
      and all pending applications for Trademarks, owned by the Company; (iii) all
      registered Copyrights, and all pending applications for Copyrights, owned by
      the
      Company; and (iv) all Domain Names owned by the Company.

    

    (c) Section
      3.17(c)
      of the
      Company Disclosure Schedule lists all licenses, sublicenses, agreements or
      instruments involving the Intellectual Property of the Company including
      (i) licenses by the Company to any person of any Intellectual Property; and
      (ii) all licenses by any other person to the Company of any Intellectual
      Property (except with respect to generally available “off-the-shelf” software)
      (each a “License”).
      Except as set forth in Section
      3.17(c)
      of the
      Company Disclosure Schedule (i) with respect to each License, there is no
      material default (or event that with the giving of notice or passage of time
      would constitute a material default) by the Company, or to the knowledge of
      the
      Company, the other party thereto, (ii) there are no pending or, to the knowledge
      of the Company, threatened claims with respect to any License and (iii) each
      License is valid, subsisting, in full force and effect and binding upon the
      Company and, to the knowledge of the Company, the other parties thereto, in
      accordance with its terms, except as the same may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
      the
      enforcement of creditors’ rights generally and general equitable principles
      regardless of whether such enforceability is considered in a proceeding at
      law
      or in equity.

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

       

    

    (d) Except
      as
      set forth in Section
      3.17(d)
      of the
      Company Disclosure Schedule, the Company has good and valid title to, or
      otherwise possesses the rights to use, all Intellectual Property necessary
      to
      permit the Company to conduct the business and operations of the Company from
      and after the Closing Date, in the same manner as it is being conducted as
      of
      the date hereof, and to the knowledge of the Company, as currently contemplated
      to be conducted by the Company. Except as set forth in Section
      3.17(d)
      of the
      Company Disclosure Schedule, neither the consummation of the transactions
      contemplated by this Agreement nor the Company’s performance hereunder will
      result in the termination or forfeiture of the Company’s rights in such
      Intellectual Property or the Licenses. All officers, employees and contractors
      of the Company who have created Intellectual Property that is owned by the
      Company, have executed an agreement under which all rights, title and ownership
      in and to such Intellectual Property have been assigned to the
      Company.

    

    (e) Except
      as
      disclosed in Section
      3.17(e)
      of the
      Company Disclosure Schedule, to the knowledge of the Company, the Company has
      not infringed upon, misappropriated or misused any intellectual property rights
      of another person or entity. Except as set forth in Section
      3.17(e)
      of the
      Company Disclosure Schedule, the Company has not received notice of any alleged
      infringement, misappropriation or misuse by the Company of the intellectual
      property rights of another person or entity. Except
      as
      disclosed in Section
      3.17(e)
      of the
      Company Disclosure Schedule,
      there
are
      no
      pending, and to the knowledge of the Company, threatened claims or proceedings
      contesting or challenging the Company’s Intellectual Property, or the Company’s
      use of the Intellectual Property owned by another person or entity. To the
      knowledge of the Company, no third party, including any current or former
      employee or contractor of the Company, is infringing upon, misappropriating,
      or
      otherwise violating the Company’s rights to the Intellectual Property owned by
      the Company.

    

    (f) Patents.
      Except
      as set forth on Section
      3.17(f)
      of the
      Company Disclosure Schedule:

    

    (i) All
      of
      the issued Patents and pending applications for Patents of the Company are
      currently in compliance in all material respects with all legal requirements
      (including payment of filing, examination, and maintenance fees).

    

    (ii) No
      Patent
      of the Company has been or is now involved in any infringement, interference,
      reissue or reexamination proceeding and, to the knowledge of the Company, no
      such action is threatened with respect to any of the Patents of the
      Company.

    

    (g) Trademarks.

    

    (i) All
      registered Trademarks, and pending applications for Trademarks with the United
      States Patent and Trademark Office (“PTO”)
      or any
      other country’s trademark office, of the Company are currently in compliance in
      all material respects with all legal requirements (including the filing of
      affidavits of use and renewal applications as applicable).

    

    
      
         

      

      
        28

        
          

        

      

      
         

      

       

    

    (ii) No
      Trademark of the Company has been or is now involved in any opposition,
      infringement, dilution, unfair competition or cancellation proceeding and,
      to
      the knowledge of the Company, no such action is threatened with respect to
      any
      of the Trademarks of the Company.

    

    (h) Copyrights.

    

    (i) All
      registered Copyrights and pending applications for Copyrights of the Company
      are
      currently in compliance in all material respects with all legal
      requirements.

    

    (ii) No
      Copyright of the Company has been or is now the subject of any invalidation
      or
      infringement Proceeding and, to the knowledge of the Company, no such action
      is
      threatened with respect to any Copyright of the Company.

    

    (i) Domain
      Names.

    

    (i) All
      registered Domain Names of the Company are currently in compliance in all
      material respects with all legal requirements.

    

    (ii) No
      Domain
      Name of the Company has been or is now the subject of any dispute resolution
      or
      infringement Proceeding and, to the knowledge of the Company, no such action
      is
      threatened with respect to any Domain Name of the Company.

    

    (j) Section
      3.17(j)
      of the
      Company Disclosure Schedule lists all products distributed or sold by the
      Company.

    

    (k) The
      Company has taken commercially reasonable steps to protect the proprietary
      nature of the Intellectual Property owned by the Company and to maintain in
      confidence all Trade Secrets owned or used by the Company. To the knowledge
      of
      the Company, no Trade Secret of the Company has been disclosed or authorized
      to
      be disclosed to any person, including any employee, agent, contractor, or other
      entity, other than pursuant to a non-disclosure agreement or other conditional
      obligation that protects the Company’s proprietary interests in and to such
      Trade Secrets.

    

    (l) Section
      3.17(l)
      of the
      Company Disclosure Schedule contains a true and complete list of all of the
      (i)
      Software owned by the Company that is included, embedded or incorporated in
      or
      developed for inclusion in the Company’s products or websites, or used in the
      delivery of the Company’s services (the “Company
      Software”)
      and
      (ii) third-party Software that is licensed to the Company and is included,
      embedded or incorporated in or developed for inclusion in the Company’s products
      or websites, or used in the delivery of the Company’s services (except with
      respect to generally available “off-the-shelf” software) (the “Third-Party
      Software”).
      The
      Company owns full and unencumbered right and good, valid and marketable title
      to
      the Company Software and has valid licenses to use the Third-Party Software,
      and
      the Company Software is owned by the Company free and clear of any and all
      Encumbrances. Except as identified in Section
      3.17(l)
      of the
      Company Disclosure Schedule, no open source or public library software,
      including any version of any software licensed pursuant to any GNU public
      license, is, in whole or in part, embodied or incorporated in the Company
      Software Programs.

    

    
      
         

      

      
        29

        
          

        

      

      
         

      

       

    

    (m) The
      Company employs commercially reasonable measures to ensure that the Company
      Software contain no “viruses.” For the purposes of this Agreement, “virus” means
      any computer code intentionally designed to wrongfully disrupt, disable or
      harm
      in any manner the operation of any software or hardware. 

    

    (n) The
      Intellectual Property owned by the Company (and, to the knowledge of the
      Company, the Intellectual Property of third parties licensed to the Company),
      is
      free and clear of any and all Encumbrances. 

    

    (o) Section
      3.17(o)
      of the
      Company Disclosure Schedule sets forth all agreements by which the Company
      is
      obligated to make to third parties any payments related to Intellectual
      Property.

    

    (p) Other
      than as set forth in Section
      3.17(p)
      of the
      Company Disclosure Schedule, to the knowledge of Company, there has been no
      breach of security involving any the Company websites or information assets.
      All
      data which has been collected, stored, maintained or otherwise used by the
      Company has been, to the knowledge of the Company, collected, stored, maintained
      and used in accordance with all applicable U.S. and foreign laws, rules,
      regulations, guidelines and industry standards. The Company has not received
      a
      notice of noncompliance with applicable data protection laws, rules,
      regulations, guidelines or industry standards.

     

    SECTION
      3.18 Material
      Contracts.
      Section
      3.18
      of the
      Company Disclosure Schedule contains a list of each of the following contracts
      (or, in the case of oral contracts, summaries thereof) to which the Company
      is a
      party or by which the Company, or any of the Company’s assets or properties, is
      bound or subject (collectively, the “Material
      Contracts”):

    

    (a) any
      agreement or series of related agreements requiring aggregate payments by or
      to
      the Company of more than Fifty Thousand Dollars ($50,000) per year;

    

    (b) any
      agreement with or for the benefit of any current or former officer or director,
      holder of any security, employee or consultant of the Company under which the
      Company has any obligations as of the date hereof and that (i) involves the
      making of payments exceeding Fifty Thousand Dollars ($50,000) in any year,
      other
      than regular salary and bonus amounts, (ii) contains non-competition
      provisions imposing restrictions on the Company or a senior executive officer
      or
      key employee of the Company (other than those in favor of the Company), or
      (iii) involves any severance or termination payments or other similar
      obligation;

    

    (c) any
      agreement with any labor union or association representing any employee of
      the
      Company;

    

    (d) any
      agreement for the sale of any of the assets, properties or securities of the
      Company other than in the ordinary course of business or for the grant to any
      person of any option, right of first refusal or preferential or similar right
      to
      purchase any such assets, properties or securities (other than the Rights
      Agreements);

    

    (e) any
      agreement of surety, guarantee or indemnification, other than agreements in
      the
      ordinary course of business with respect to obligations in an aggregate amount
      not in excess of Fifty Thousand Dollars ($50,000), other than the security
      agreement relating to the Notes;

    

    
      
         

      

      
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    (f) any
      agreement, note or other document relating to or evidencing outstanding
      indebtedness of the Company for borrowed money (including capitalized lease
      obligations) in excess of Fifty Thousand Dollars ($50,000), other than the
      Notes;

    

    (g) any
      phantom stock plan or bonus, incentive or similar agreement, arrangement or
      understanding, other than the Key Contributor Plan and the Investor Incentive
      Agreement;

    

    (h) any
      agreement involving the assignment, transfer, license (whether as licensee
      or
      licensor), pledge or Encumbrance of any Intellectual Property owned or used
      by
      the Company, except for any generally available “off-the-shelf” Software, other
      than the security agreement relating to the Notes;

    

    (i) any
      distribution or sales representative agreement or agreement appointing any
      agent; and

    

    (j) any
      other
      agreement that is material to the business, operations or financial condition
      of
      the Company.

    

    True
      and
      complete copies of all Material Contracts (and all amendments, waivers or other
      modifications thereto) have been furnished or made available to Radware. Each
      Material Contract is valid, subsisting, in full force and effect and binding
      upon the Company and, to the knowledge of the Company, the other parties thereto
      in accordance with its terms. The Company is not in default (and, to the
      knowledge of the Company, no condition exists that, with notice or lapse of
      time
      or both, would constitute a default by the Company) under any Material Contract,
      which default would give the other party the right to terminate or modify such
      Material Contract or would accelerate any obligation or payment by the Company,
      nor, to the knowledge of the Company, is any other party to any Material
      Contract in default thereunder (or, does any condition exist that, with notice
      or lapse of time or both, would constitute a default by any such party). None
      of
      the Material Contracts is currently being renegotiated. The validity,
      continuation and effectiveness of each of the Material Contracts will not be
      materially adversely affected solely as a result of the transactions
      contemplated by this Agreement. To the knowledge of the Company, no party to
      any
      of the Material Contracts has made, asserted or has any defense, setoff or
      counterclaim under its Material Contract or has exercised any option granted
      to
      it to cancel, terminate or shorten the term of its Material Contract.
      Notwithstanding anything in this Agreement to the contrary, each party
      acknowledges and agrees that the consent set forth on Schedule 3.05(a) will
      not
      be obtained, and that the Company is not making any representation in relation
      to the requirement of such consent. 

     

    SECTION
      3.19 Title
      to Properties; Absence of Encumbrances.
      The
      Company has good and valid title to or, in the case of leases and licenses,
      valid and subsisting leasehold interests or licenses in, all of its properties
      and assets of whatever kind (whether real or personal, tangible or intangible)
      used or held for use in its business, including, without limitation, all
      properties and assets that are shown on the Unaudited Balance Sheet (except
      for
      assets sold in the ordinary course of business since the date of such Unaudited
      Balance Sheet), which represent all such property and assets that are used
      in
      the conduct of its businesses as presently conducted, in each case free and
      clear of any and all Encumbrances, except (i)  for those securing Taxes,
      assessments and other governmental charges or levies not yet due and payable
      (excluding any imposed pursuant to any of the provisions of ERISA),
      (ii) such imperfections in title, liens and easements as do not detract
      from or interfere with the use of the properties subject thereto or affected
      thereby or otherwise impair business operations involving such properties,
      and
      (iii) Encumbrances securing any debt which is reflected in the Financial
      Statements (encumbrances in clauses (i) - (iii) being “Permitted
      Encumbrances”).

     

    
      
         

      

      
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    SECTION
      3.20 Real
      Property.
      Section
      3.20
      of the
      Company Disclosure Schedule contains a complete and correct list of all real
      property (including buildings and structures) leased or subleased by the Company
      and all interests therein (including a street address). The Company does not
      own
      and has never owned any real property. No condemnation or other proceeding
      is
      pending or, to the knowledge of the Company, threatened which would affect
      the
      use of any such property by the Company. The Company enjoys peaceful and
      undisturbed possession under all real property leases under which it is
      operating in accordance with the terms of such leases, and all rents and
      additional rents due to date from the Company under such leases have been paid
      in full.

     

    SECTION
      3.21 Transactions
      with Affiliates; Management Relationships.

    

    (a) The
      Company has not, directly or indirectly, engaged in any continuing transactions
      or financial or commercial arrangements (i) with any stockholder of the
      Company, other than as a board member or pursuant to the Company’s financing
      activities or (ii) (except for employment arrangements with its employees)
      with any officer or director or, to the knowledge of the Company, with any
      of
      their respective affiliates or relatives (each a “Related
      Party”).
      Except for (i) employment arrangements with its employees, (ii) the
      Company Certificate of Incorporation, (iii) the Company By-Laws,
      (iv) applicable Law, (v) the agreements evidencing Existing Options
      and (vi) the Key Contributor Plan and the Investor Incentive Agreement, the
      Company does not have any obligation to or claim against any Related Party,
      and
      no Related Party has any obligation to or claim against the Company.

    

    (b) No
      executive officer or director of the Company owns any interest in any property
      or assets of the Company (except as a stockholder of the Company) and, to the
      knowledge of the Company, no executive officer of the Company owns any interest
      in (i) any current competitor, customer or supplier of the Company or
      (ii) any person that is currently a party to any material contract or
      agreement with the Company, other than holdings of less than 1% of a class
      of a
      company’s publicly traded securities.

     

    SECTION
      3.22 Insurance.
      Section
      3.22
      of the
      Company Disclosure Schedule lists all insurance policies owned or held by the
      Company on the date hereof. The insurance coverage afforded by such policies
      is
      customary and adequate for companies in similar lines of business, similarly
      situated. All such policies are in full force and effect, all premiums with
      respect thereto have been paid to the extent due, no notice of cancellation
      or
      termination has been received with respect to any such policy and no claim
      is
      currently pending under any such policy involving an amount in excess of Twenty
      Thousand Dollars ($20,000).

     

    
      
         

      

      
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    SECTION
      3.23 Books
      and Records.

    

    (a) The
      books
      and records of the Company are complete and correct in all material respects
      and
      have been maintained in accordance with sound business practices.

    

    (b) The
      minute books of the Company, which have been previously provided to Radware,
      contain complete and accurate records of all meetings and accurately reflect
      all
      other corporate action of the stockholders and board of directors of the Company
      through the date of this Agreement.

    SECTION
      3.24 Intentionally
      Omitted.

     

    SECTION
      3.25 Employee
      Conflicts.
      To the
      knowledge of the Company, no employee of the Company is in violation of any
      term
      of any employment contract, inventions disclosure agreement, confidentiality
      agreement, non-competition agreement or restrictive covenant to or with a former
      employer relating to the right of any such employee to be employed by the
      Company because of the nature of the business conducted or presently proposed
      to
      be conducted by the Company or relating to the use of trade secrets or
      proprietary information of others.

     

    SECTION
      3.26 Certain
      Business Practices.
      The
      Company has not (i) used any funds for unlawful contributions, gifts,
      entertainment or other unlawful payments related to a political activity,
      (ii) made any unlawful payment to any foreign or domestic government
      official or employee or to any foreign or domestic political party or campaign
      or violated any provision of the Foreign Corrupt Practices Act of 1977, as
      amended or (iii) made any other unlawful payment.

     

    SECTION
      3.27 Bank
      Accounts.
      Section
      3.27
      of the
      Company Disclosure Schedule sets forth a complete and correct list of each
      bank
      in which the Company has an account or safe deposit or lockbox, the account
      or
      box number, as the case may be, and the name of every person authorized to
      draw
      thereon or having access thereto.

     

    SECTION
      3.28 No
      Required Disclosure.
      The
      Company is not required to disclose the existence of this Agreement, the terms
      hereof, or the transactions contemplated hereby, to any person (other than
      to
      its directors, officers, employees, any Company Recipient or any holder of
      Existing Options).

     

    SECTION
      3.29 Internal
      Controls.
      The
      Company maintains a system of internal accounting controls sufficient to provide
      reasonable assurance that (i) transactions are executed in accordance with
      management’s general or specific authorizations, (ii) transactions are recorded
      as necessary to permit preparation of financial statements in conformity with
      GAAP and to maintain asset accountability, (iii) access to assets is permitted
      only in accordance with management’s general or specific authorization, and (iv)
      the recorded accountability for assets is compared with the existing assets
      at
      reasonable intervals and appropriate action is taken with respect to any
      differences.

     

    
      
         

      

      
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    SECTION
      3.30 Key
      Contributor Plan and Investor Incentive Agreement.

    

    (a) Key
      Contributor Plan.
      On the
      Closing Date, pursuant to the Key Contributor Plan, the amounts set forth
      opposite each Key Contributor Plan Participant’s name on Annex A
      hereto
      are the amounts owing and payable to the Key Contributor Plan Participants
      and
      no other amounts are owed to any other parties pursuant to the Key Contributor
      Plan as a result of the transactions contemplated hereby other than as described
      in Sections
      2.07(a)(ii) and 2.08(b),
      if
      applicable.

    

    (b) Investor
      Incentive Agreement.
      On the
      Closing Date, pursuant to the Investor Incentive Agreement, the amounts set
      forth opposite each Investor Incentive Agreement Recipient’s name on
Annex A
      hereto
      are the amounts owing and payable to the Investor Incentive Agreement Recipients
      and no other amounts are owed to any other parties pursuant to the Investor
      Incentive Agreement as a result of the transactions contemplated hereby, other
      than as described in Section
      2.07(b)(ii) and 2.08(b),
      if
      applicable.

     

    SECTION
      3.31 Disclosure.
      No
      representation or warranty by the Company herein, the Company Disclosure
      Schedule, nor any certificate or exhibit furnished pursuant to this Agreement
      or
      in connection with the transactions contemplated herein, contains any untrue
      statement of a material fact, or omits a material fact necessary to make the
      statements contained herein or therein, in light of the circumstances in which
      they were made, not misleading.

    

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY RECIPIENTS

    

    Each
      Company Recipient hereby represents and warrants to Radware, Parent and Merger
      Sub on the date hereof, with respect only to himself, herself or itself and
      the
      Company securities held by him, her or it, as follows (and the Company hereby
      represents and warrants to Radware, Parent and Merger Sub on the date hereof
      with respect to Section 4.02 as it relates to the Company Stockholders set
      forth
      on Schedule
      4.02):

     

    SECTION
      4.01 Title
      to Notes and Shares.
      Each
      Company Stockholder and Company Noteholder represents that he, she or it owns
      the Notes and/or number of shares of Company Capital Stock set forth opposite
      his, her or its name on Section
      3.03(b)
      of the
      Company Disclosure Schedule, free and clear of any and all Encumbrances other
      than the Registration Rights Agreement dated March 24, 2004, as amended (the
      “Registration
      Rights Agreement”)
      and
      the Investors Rights Agreement dated March 24, 2004, as amended (the
“Investors
      Rights Agreement”
and
      with the Registration Rights Agreement the “Rights
      Agreements”).
      Upon
      consummation of the Closing, in accordance with the terms set forth in this
      Agreement, Radware shall acquire good, valid and marketable title to the Notes
      and Company Capital Stock being sold by each Company Noteholder and Company
      Stockholder hereunder, as the case may be, free and clear of any liens or
      restrictions on transfer and free and clear of any Encumbrances, other than
      the
      Rights Agreements.

     

    
      
         

      

      
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    SECTION
      4.02 Authority
      Relative to this Agreement; Action.
      Each
      Company Stockholder and Company Noteholder has all necessary power and authority
      to execute and deliver this Agreement and each of the Ancillary Agreements
      to
      which it is a party and to perform its obligations hereunder and thereunder
      and
      to consummate the transactions contemplated hereby and thereby. The execution
      and delivery of this Agreement and the Ancillary Agreements to which it is
      a
      party by each Company Stockholder and Company Noteholder and the consummation
      by
each
      Company Stockholder and Company Noteholder
      of the
      transactions contemplated hereby and thereby have been duly and validly
      authorized by all necessary action on the part of each Company Stockholder
      and
      Company Noteholder. This Agreement, Ancillary Agreements to which each Company
      Stockholder and Company Noteholder is a party have been duly and validly
      executed and delivered by each Company Stockholder and Company Noteholder and,
      assuming the due authorization, execution and delivery of this Agreement and
      the
      Ancillary Agreements by each of the other parties hereto and thereto,
      constitutes, or, in the case of the Ancillary Agreements to which it is a party
      have been or, if executed after the date hereof and at or prior to the Effective
      Time, will constitute, legal, valid and binding obligations of each Company
      Stockholder and Company Noteholder, enforceable against each Company Stockholder
      and Company Noteholder in accordance with their respective terms, except as
      the
      same may be limited by applicable bankruptcy, insolvency, reorganization,
      moratorium or similar laws affecting the enforcement of creditors’ rights
      generally and general equitable principles regardless of whether such
      enforceability is considered in a proceeding at law or in equity.

    

    SECTION
      4.03 No
      Conflict; Required Filings and Consents.
      (a)
      Each Company Recipient acknowledges that: The execution and delivery of this
      Agreement and the Ancillary Agreements to which such Company Recipient is a
      party by such Company Recipient and the consummation by such Company Recipient
      of the transactions contemplated hereby and thereby will not (i) conflict with
      or violate any Law applicable to such Company Recipient or by which any of
      its
      respective properties or operations are bound or affected or (ii) conflict
      with,
      result in any material breach of, or constitute a default (or an event which
      with notice or lapse of time or both would become a default) under, or give
      to
      others any rights of termination, amendment, acceleration or cancellation of,
      or
      result in the creation of an Encumbrance on any of the properties or assets
      of
      the Company pursuant to, any material note, bond, mortgage, indenture, contract,
      agreement, lease, license, permit, franchise or other instrument or obligation
      to which it is a party or by which its properties, is bound.

    

    (b) The
      execution and delivery of this Agreement and the Ancillary Agreements to which
      such Company Stockholder is a party by such Company Stockholder do not, and
      the
      performance of this Agreement and such Ancillary Agreements and the consummation
      of the transaction contemplated hereby and thereby, will not, require such
      Company Stockholder to obtain any waiver, consent, approval, authorization
      or
      permit of, or make any filing with or notification to, any Governmental Entity
      or other third party, except the filing of the Certificate of Merger as required
      by the Delaware Law.

    SECTION
      4.04 Legal
      Proceedings.
      There
      is no pending Proceeding against such Company Recipient that challenges, or
      may
      have the effect of preventing, delaying or making illegal, or otherwise
      interfering with, the Merger or any of the other transactions contemplated
      hereby and, to the knowledge of such Company Recipient, no such Proceeding
      has
      been threatened. To the knowledge of such Company Recipient, no event or
      circumstance exists that would give rise to or serve as a basis for the
      commencement of any such Proceeding.

     

    SECTION
      4.05 Brokers.
      Other
      than the amount set forth on Annex
      A
      as part
      of the Transaction Expenses, no broker, finder or investment banker is entitled
      to any brokerage, finder’s fee or other fee or commission in connection with the
      transactions contemplated by this Agreement based upon arrangements made by
      or
      on behalf of any Company Recipient.

    

    
      
         

      

      
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    ARTICLE
      V

    REPRESENTATIONS
      AND WARRANTIES OF RADWARE, MERGER SUB
      AND
      PARENT

    

    Radware,
      Merger Sub and Parent represent and warrant to the Company as of the date hereof
      that the statements contained in this Article
      V
      are true
      and correct, except as set forth in the disclosure schedule delivered by Radware
      to the Company on the date hereof (the “Radware
      Disclosure Schedule”).
      The
      Radware Disclosure Schedule shall be arranged in paragraphs corresponding to
      the
      numbered and lettered paragraphs in this Article
      V
      and the
      disclosure in any paragraph shall qualify other paragraphs in this Article
      V
      only to
      the extent that it is specifically indicated in such paragraph.

     

    SECTION
      5.01 Organization
      and Qualification.
      Each of
      Radware, Parent and Merger Sub is a corporation duly organized, validly existing
      and in good standing under the laws of the jurisdiction of its organization
      and
      each of Radware, Parent and Merger Sub has the requisite corporate power and
      authority necessary to own, lease and operate the properties it owns, leases
      or
      operates and to carry on its business as it is now being conducted.

     

    SECTION
      5.02 Authority
      Relative to this Agreement.
      Each
      of Radware, Parent and Merger Sub has all necessary corporate power and
      authority to execute and deliver this Agreement and each of the Ancillary
      Agreements to which it is a party and to perform its obligations hereunder
      and
      thereunder and to consummate the transactions contemplated hereby and thereby.
      The execution and delivery of this Agreement and the Ancillary Agreements to
      which it is a party by Radware, Parent and Merger Sub and the consummation
      by
      Radware, Parent and Merger Sub of the transactions contemplated hereby and
      thereby have been duly and validly authorized by all necessary corporate action
      on the part of Radware, Parent and Merger Sub, as the case may be, and no other
      corporate or stockholder proceedings on the part of Radware, Parent or Merger
      Sub are necessary to authorize this Agreement or any of the Ancillary Agreements
      to which it is a party or to consummate the transactions so contemplated. This
      Agreement has been, and the Ancillary Agreements to which it is a party have
      been or, if executed after the date hereof, will be, duly and validly executed
      and delivered by Radware, Parent and Merger Sub and, assuming the due
      authorization, execution and delivery of this Agreement and the Ancillary
      Agreements by each of the other parties hereto and thereto, constitutes, or,
      in
      the case of the Ancillary Agreements have been or, if executed after the date
      hereof and prior to the Effective Time, will constitute, legal, valid and
      binding obligations of Radware, Parent and Merger Sub, enforceable against
      Radware, Parent and Merger Sub in accordance with their respective terms, except
      as the same may be limited by applicable bankruptcy, insolvency, reorganization,
      moratorium or similar laws affecting the enforcement of creditors’ rights
      generally and general equitable principles regardless of whether such
      enforceability is considered in a proceeding at law or in equity. 

     

    
      
         

      

      
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    SECTION
      5.03 No
      Conflict; Required Filings and Consents.

    

    (a) The
      execution and delivery of this Agreement and the Ancillary Agreements to which
      it is a party by Radware, Parent and Merger Sub do not, and the performance
      of
      this Agreement and the Ancillary Agreements by Radware, Parent and Merger Sub
      and the consummation by Radware, Parent and Merger Sub of the transactions
      contemplated hereby and thereby will not, (i) conflict with or violate the
      organizational documents of Radware, Parent or Merger Sub, (ii) conflict
      with or violate any Law applicable to Radware, Parent or Merger Sub or by which
      any of their respective properties is bound or affected or (iii) conflict
      with, result in any breach of, or constitute a default (or an event that with
      notice or lapse of time or both would become a default) under, or impair
      Radware’s, Parent’s or Merger Sub’s rights or alter the rights or obligations of
      any third party under, or give to others any rights of termination, amendment,
      acceleration or cancellation of, or result in the creation of an Encumbrance
      on
      any of the properties or assets of Radware, Parent or Merger Sub pursuant to,
      any note, bond, mortgage, indenture, contract, agreement, lease, license,
      permit, franchise or other instrument or obligation to which Radware, Parent
      or
      Merger Sub is a party or by which Radware, Parent or Merger Sub or any of their
      respective properties is bound or affected except, in the case of clauses (ii)
      and (iii), for such conflicts, breaches, violations, defaults, impairments
      or
      alterations that would not prevent or delay consummation of the Merger, or
      otherwise prevent or delay Radware, Parent or Merger Sub from performing its
      obligations under this Agreement.

    

    (b) The
      execution and delivery of this Agreement and the Ancillary Agreements by
      Radware, Parent and Merger Sub, as applicable, do not, and the performance
      of
      this Agreement and the Ancillary Agreements by Radware, Parent and Merger Sub,
      as applicable, and the consummation by Radware, Parent and Merger Sub of the
      transactions contemplated hereby and thereby, as applicable, will not, require
      any waiver, consent, approval, authorization or permit of, or filing with or
      notification to, any Governmental Entity or other third party, except
      (i) for the filing of the Certificate of Merger as required by the Delaware
      Law and (ii) where the failure to obtain such consents, approvals,
      authorizations or permits, or to make such filings or notifications, would
      not
      prevent or delay consummation of the Merger, or otherwise prevent or delay
      Radware, Parent or Merger Sub from performing its obligations under this
      Agreement.

     

    SECTION
      5.04 Financial
      Ability.
      Radware
      or Parent has sufficient cash available to enable it to pay the Closing Date
      Purchase Price at the Closing and to satisfy its other obligations
      hereunder.
      Since
      the date of Parent’s most recent public filing with the United States Securities
      and Exchange Commission containing financial statements, there has occurred
      no
      event likely to have a material adverse effect on Radware’s or Parent’s ability
      to pay the Additional Amount and fulfill its obligations under this
      Agreement.

     

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

    

    SECTION
      5.06 Restrictions
      on Business Activities.
      There
      is no non-competition or similar agreement, commitment, judgment, injunction,
      order or decree binding upon Radware or Parent which has the effect of
      prohibiting or impairing Radware or Parent from carrying out the business
      operations of the Company as currently conducted, including the marketing and
      sale of the Inflight and Percept Product Line. Neither Radware nor Parent has
      entered into any agreement under which it is restricted from selling, licensing
      or otherwise distributing the Inflight and Percept Product Line, or providing
      related services to, customers or potential customers, in any geographic area,
      during any period of time or any segment of the market or line of
      business.

    

    
      
         

      

      
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    ARTICLE
      VI

    COVENANTS
      OF THE COMPANY

     

    SECTION
      6.01 Confidentiality.
      The
      Company Recipients shall, and the Company Recipients shall cause their
      directors, officers, employees, agents, consultants and/or representatives
      to,
      maintain the Confidential Information in confidence using at least the same
      degree of care as it employs with respect to its own proprietary and
      confidential information, but in all events at least a reasonable degree of
      care. “Confidential
      Information”
shall
      mean all trade secrets, know-how, customer lists, technical information,
      proprietary information, technologies, processes and formulae, source code,
      algorithms, architecture, structure, display screens and development tools,
      data, plans and drawings and blue prints, whether tangible or intangible and
      whether or how stored, compiled, or memorialized physically, electronically,
      photographically, or otherwise, owned, used or licensed by Radware or Parent
      as
      licensee or licensor and that have been used or are used in or are material
      to
      the conduct of Radware’s or Parent’s business shall constitute Confidential
      Information.

     

    SECTION
      6.02 Public
      Announcements.
      The
      parties agree that any press release or other public statement with respect
      to
      this Agreement or the transactions contemplated hereby shall be only as agreed
      upon in advance by Radware and the Company.

    

    ARTICLE
      VII

    CLOSING
      DELIVERIES

     

    SECTION
      7.01 Closing
      Deliveries for the Company and the Company Recipients.
      The
      obligations of Radware and Merger Sub to effect the Merger are subject to
      satisfaction of the following conditions, any of which may be waived by Radware
      in writing:

    

    (a) All
      directors of the Company whom Radware has requested in writing not less than
      five (5) days prior to the scheduled Closing Date to resign shall have resigned
      or otherwise been removed from office.

    

    (b) Company
      Required Consents listed on Schedule
      7.01
      (and, in
      any event, all consents, approvals or clearances from Governmental Entities)
      shall have been obtained or made in a form and manner reasonably acceptable
      to
      Radware.

    

    (c) The
      Company, the Company Recipients and the Seller Representatives shall have
      executed and delivered the Escrow Agreement, in substantially the form attached
      as Exhibit
      A
      hereto.

    

    (d) Radware
      shall have received a certificate signed on behalf of the Company by the Chief
      Financial Officer of the Company, which shall certify that the allocation of
      the
      Net Aggregate Merger Consideration among the Company Noteholders and Company
      Stockholders set forth thereon is accurate and shall constitute the Net
      Aggregate Merger Consideration issuable to the Company Noteholders and Company
      Stockholders in exchange for the Notes and Company Capital Stock, pursuant
      to
      this Agreement (including Annex A hereto). The information and the calculations
      set forth in such certificate shall be binding on the Company Noteholders and
      Company Stockholders and Radware shall have the right to rely on such
      information and calculations.

    

    
      
         

      

      
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    (e) Pay-off
      letters evidencing either receipt in full of the Transaction Expenses or
      indicating the amount required to be paid in order to satisfy in full the
      Transaction Expenses shall have been executed and delivered by each party
      receiving any portion of the Transaction Expenses.

    

    (f) Radware
      shall have received a certificate of the Secretary of the Company dated as
      of
      the Closing Date in form and substance reasonably satisfactory to Radware
      attesting to the incumbency of the officers of the Company executing the
      Agreement or any Ancillary Agreements to which the Company is a party and
      certifying as to the following: (i) a true and correct copy of the Certificate
      of Incorporation of the Company in effect as of the Closing, certified by the
      Secretary of State of the State of Delaware, (ii) a true and correct copy of
      the
      By-Laws of the Company in effect as of the Closing, (iii) a true and correct
      copy of the resolutions of the Company’s Board of Directors authorizing the
      execution, delivery and performance of this Agreement and all agreements and
      transactions contemplated hereby, including the termination or cancellation
      of
      Existing Options, and (iv) this Agreement shall have been duly approved by
      the
      requisite vote or consent of the holders of Company Capital Stock in accordance
      with the Delaware Law.

    

    (g) The
      Company shall have delivered to Radware a certificate of good standing of the
      Company from the State of Delaware dated no more than five (5) business days
      prior to the Closing Date.

    

    (h) The
      Company shall have delivered to Radware an opinion of Wyrick Robbins Yates
&
Ponton, LLP, dated the date hereof and addressed to Radware, in substantially
      the form attached as Exhibit
      B
      hereto.

    

    (i) This
      Agreement shall have been duly approved by the requisite vote or consent of
      the
      holders of Company Capital Stock in accordance with the Delaware
      Law.

    

    (j) The
      Company shall have delivered a certificate, executed by the Chief Financial
      Officer of the Company, certifying that, in accordance with the terms of the
      Company Option Plan, each of the Existing Options that has not been exercised
      prior to the Effective Time have been cancelled and terminated, and are of
      no
      further force or effect from and after the Closing.

    

    (k) Radware
      shall have received a certificate executed by the Company acknowledging that
      each of the Key Contributor Plan Participants and the Investor Incentive
      Agreement Recipients have received any and all proceeds that they are entitled
      to as of the Closing Date pursuant to the Key Contributor Plan and the Investor
      Incentive Agreement, respectively.

    

    
      
         

      

      
        39

        
          

        

      

      
         

      

       

    

    (l) Radware
      shall have received a certificate, in the form and manner that complies with
      all
      of the requirements of Treasury Regulation Section 1.1445-2(c)(3) that its
      capital stock is not a U.S. real property interest.

    

    ARTICLE
      VIII

    INDEMNIFICATION

     

    SECTION
      8.01 General
      Indemnification of Radware.
      Subject
      to Section
      8.04,
      Radware, Parent, Merger Sub, the Surviving Corporation and their respective
      officers, directors, stockholders, partners, employees, agents and affiliates
      and their heirs, successors and assigns (collectively, the “Radware
      Indemnitees”)
      shall
      be indemnified, defended and held harmless by the Company Recipients (severally
      and not jointly as more fully set forth below) from and against any and all
      liabilities, obligations, losses, assessments, damages, deficiencies, demands,
      claims, actions, causes of action, costs and expenses (including, without
      limitation, interest, penalties, court costs and reasonable attorneys’ fees and
      expenses and any reasonable amounts paid in investigation, defense or settlement
      of any of the foregoing) of any kind, manner or nature whatsoever, whether
      or
      not arising out of third-party claims or claims by one or more parties hereto
      against any other party(ies) hereto (collectively, “Losses”),
      if,
      as and when incurred by the Radware Indemnitees, based upon, arising out of
      or
      otherwise in respect of:

    

    (a) any
      misrepresentation or breach of warranty by the Company or any Company Recipient
      contained herein, in any Ancillary Agreement or in any document or agreement
      delivered pursuant hereto or thereto or any claim by a third party which would
      constitute such a misrepresentation or breach provided that for purposes of
      determining whether there has been such a breach there shall be disregarded
      any
      Company Material Adverse Effect standard or any other materiality or similar
      materiality qualification contained in any representation, warranty or covenant
      herein or in any Ancillary Agreement;

    

    (b) any
      breach of or failure to perform any covenant or agreement by the Company or
      any
      Company Recipient or the Sellers Representatives contained herein or in any
      Ancillary Agreement;

    

    (c) any
      claim
      arising out of any dispute among any Company Recipients, or between any Company
      Recipient(s) and the Sellers Representatives, or any claims by any holders
      of
      Notes or Company Capital Stock regarding the allocation of consideration in
      the
      Merger to them;

    

    (d) Transaction
      Expenses; and

    

    (e) any
      claims for payment under the Key Contributor Agreement or the Investor Incentive
      Agreement.

    

    With
      respect to the indemnification obligations set forth in Sections
      8.01(a) and (b)
      above
      for breaches by the Company Recipients, the liability shall be indemnifiable
      individually by the breaching Company Recipient, and not by any other Company
      Recipients based on Pro Rata Interest. All other indemnification obligations
      of
      the Company Recipients shall be several and not joint based on each Company
      Recipient’s Pro Rata Interest.

     

    
      
         

      

      
        40

        
          

        

      

      
         

      

       

    

    SECTION
      8.02 Radware
      Indemnification Obligation.
      Subject
      to Section
      8.04,
      the
      Company Recipients and their respective officers, directors, employees,
      stockholders, partners, members, affiliates and agents and their heirs,
      successors and assigns (collectively, the “Company
      Recipient Indemnitees”)
      shall
      be indemnified, defended and held harmless by Radware, Parent and Merger Sub,
      joint and severally, from and against any and all Losses, if, as and when
      incurred by the Company Recipient Indemnitees based upon, arising out of or
      otherwise in respect of:

    

    (a) any
      misrepresentation or breach of warranty by Radware or Parent contained herein,
      in any Ancillary Agreement or in any document or agreement delivered pursuant
      hereto or thereto, or any claim by a third party which would constitute such
      a
      misrepresentation or breach; and

    

    (b) any
      breach of or failure to perform any covenant or agreement by Radware or Parent
      contained herein or in any Ancillary Agreement, or any claim by a third party
      which would constitute such a breach or failure.

     

    SECTION
      8.03 Procedure.

    

    (a) For
      the
      purposes of this Section
      8.03,
      the
      term “Indemnitee” shall refer to the Radware Indemnitee or the Company Recipient
      Indemnitee, as applicable, indemnified or entitled, or claiming to be entitled,
      to be indemnified pursuant to the provisions of Sections
      8.01
      or
8.02
      and the
      term “Indemnitors” shall refer to the Company Recipients, Radware, Parent or
      Merger Sub, as applicable. All actions to be taken by or on behalf of the
      Company Recipients shall be taken by both Sellers Representatives, and all
      notices by the Company Recipients or the Company Recipient Indemnitees shall
      be
      given to or by the Sellers Representatives.

    

    (b) Subject
      to subsection (vi) below, the Indemnitee shall promptly give the Indemnitor
      notice of any matter which the Indemnitee reasonably believes has given rise
      to
      a right of indemnification under this Agreement (a “Claim”),
      stating the amount of the Losses (whether actual or reasonably estimated),
      the
      method of computation thereof and the basis for the Claim and shall specify
      the
      provision or provisions of this Agreement under which the Claim is asserted,
      in
      each case with reasonable particularity. Failure to give timely notice of a
      matter that may give rise to a Claim shall not affect the rights of the
      Indemnitee to collect such Claim from the Indemnitors except to the extent
      that
      it materially and adversely prejudices the Indemnitor’s ability to defend such
      Claim and except to the extent the notice is not given during the time period
      for which indemnification claims may be asserted under this Agreement. The
      obligations and liabilities of the Indemnitors under this Article
      VIII
      with
      respect to Losses arising from Claims of any third party against the Indemnitee
      that are subject to the indemnification provided for in this Article
      VIII
      (“Third-Party
      Claims”)
      shall
      be governed by the following additional terms and conditions:

    

    (i) if
      the
      Indemnitee shall receive notice of any Third-Party Claim, the Indemnitee shall
      give the Indemnitor prompt notice of such Third-Party Claim, and shall permit
      the Indemnitor, at its option, to assume the defense and/or management of such
      Third-Party Claim at the Indemnitor’s expense and through counsel of its choice
      if the Indemnitor gives prompt notice of its intention to do so to the
      Indemnitee (the “Election
      Notice”)
      and
      does so promptly thereafter;

    

    
      
         

      

      
        41

        
          

        

      

      
         

      

       

    

    (ii) if
      the
      Indemnitor exercises its right to undertake the defense and/or management of
      any
      such Third-Party Claim, the Indemnitee shall cooperate with the Indemnitor
      in
      such defense and/or management and make available to the Indemnitor (if the
      Indemnitors are the Company Recipients, the Sellers Representatives) all
      witnesses, pertinent records, materials and information in the Indemnitee’s
      possession or under its control relating thereto as is reasonably required
      by
      the Indemnitor;

    

    (iii) if
      the
      Indemnitor does not exercise its right to assume the defense and/or management
      of any Third-Party Claim as provided above, or the Indemnitor does exercise
      such
      right but does not diligently pursue the defense of the Third Party Claim,
      the
      Indemnitee may, directly or indirectly, conduct the defense and/or management
      of
      any such Third-Party Claim in any manner it reasonably may deem appropriate
      and
      at the expense of Indemnitors, for which the Indemnitee (x) if it is a Radware
      Indemnitee, may seek reimbursement from the Escrow Indemnity Account, and (y)
      if
      it is a Company Recipient Indemnitee, may seek reimbursement from the
      Indemnitor, and the Indemnitor shall cooperate with the Indemnitee in such
      defense and/or management and make available to the Indemnitee all witnesses,
      pertinent records, materials and information in the Indemnitor’s possession or
      under its control relating thereto as is reasonably required by the
      Indemnitee;

    

    (iv) the
      Indemnitor will not consent to the entry of any judgment or enter into any
      settlement with respect to a Third-Party Claim without the prior written consent
      of the Indemnitee (not to be unreasonably withheld or delayed), unless (x)
      the
      judgment or proposed settlement does not impose an injunction or other equitable
      relief upon the Indemnitee and (y) the judgment or proposed settlement includes
      as an unconditional term thereof the giving by the claimant or plaintiff to
      the
      Indemnitee of an unconditional release from all liability in respect of such
      Third-Party Claim;

    

    (v) if
      the
      Indemnitee conducts the defense and/or management of a Third-Party Claim, as
      provided above, the Indemnitee will not consent to the entry of any judgment
      or
      enter into any settlement with respect to a Third-Party Claim without the prior
      written consent of the Indemnitor, which will not be unreasonably withheld,
      delayed or conditional; and

    

    (vi) if
      there
      is a reasonable probability that a Third-Party Claim may materially and
      adversely affect the Indemnitee other than as a result of money damages or
      other
      monetary payments, the Indemnitee shall have the right, at its own cost and
      expense, to participate in the defense of the Third-Party Claim.

    

    (c) Characterizations
      of Indemnification Payment.
      The
      Company Recipients and Radware and Parent agree that they shall treat, and
      they
      shall cause their respective affiliates to treat, any and all indemnification
      payments made hereunder as an adjustment to the Net Aggregate Merger
      Consideration.

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

       

    

    SECTION
      8.04 Certain
      Limits on Indemnification.

    

    (a) Indemnification
      Caps and Other Limitations.
      The
      Radware Indemnitees shall, in full and complete satisfaction of any claims
      for
      indemnification arising under Section
      8.01
      above,
      be entitled to receive from the Escrow Indemnity Account (and delivered by
      the
      Escrow Agent) such amount as is equal to the value of the Losses as to which
      the
      Radware Indemnitees are entitled to indemnification, as determined pursuant
      to
      the terms of this Agreement and the Escrow Agreement; provided,
      that
      Radware Indemnitees shall not be entitled to receive indemnification under
      Sections 8.01(a)
      or
8.01(b)
      unless
      and until the sum of the aggregate amount of Losses under such subsections
      exceeds One Hundred Thousand Dollars ($100,000) (the “Basket
      Amount”),
      after
      which Radware Indemnitees shall be entitled to the entire amount of such Losses,
      including Losses covered by the Basket Amount incurred under such sections.
      The
      limitation set forth in this Section
      8.04(a)
      shall
      not apply with respect to (x) breaches of representations and warranties set
      forth in Sections
      3.03, 3.04, 4.01 and 4.02
      hereof.
      The Radware Indemnitees shall have the right to satisfy any claims for Losses
      arising pursuant to this Agreement (i) first, by set-off against the Additional
      Payment, the Additional Key Contributor Plan Amount and the Additional Investor
      Incentive Agreement Amount, if such payments are unpaid at the time a claim
      for
      indemnification is made; (ii) second, from the Escrow Indemnity Account; and
      (iii) third, from the Company Recipients; provided
      that in
      no event shall the liability of any Company Recipient with respect to Losses
      under this clause (iii) exceed the amount of consideration received by such
      Company Recipient under this Agreement.

    

    (b) Notwithstanding
      anything to the contrary contained herein, Radware shall have no obligation
      to
      indemnify a Company Recipient Indemnitee with respect to Losses pursuant to
      Section
      8.02
      above
      unless it shall have received written notice of a claim for indemnification
      signed by both Sellers Representatives.

    

    (c) For
      purposes of this Article
      VIII,
      the
      amount of any Losses shall be determined net of any insurance proceeds actually
      received by the applicable Indemnitees in connection with the matter out of
      which such Losses shall arise.

    

    (d) Subject
      to the proviso of this Section
      8.04(d),
      no
      claim under this Article
       VIII
      shall be
      made after the expiration of the survival periods referred to in Section
      9.01
      hereof,
provided,
      however,
      that if
      written notice of a claim is made prior to the expiration of the survival period
      (such notice setting forth in reasonable detail the basis for such claim),
      then
      the relevant representation, warranty or covenant shall survive as to such
      claim
      only until the claim has been fully and finally resolved.

    

    (e) The
      remedies provided in this Article
      VIII
      shall be
      exclusive of any other rights or remedies which might otherwise be available
      to
      any indemnified parties upon the occurrence of any event described in this
      Article
      VIII
      or which
      otherwise arise out of, relate to or with respect to this Agreement or the
      transactions contemplated hereby other than for fraud. Nothing contained herein,
      however, shall preclude indemnified parties from seeking injunctive or other
      equitable relief under circumstances where such relief might be appropriate
      with
      the proviso that the moving party shall not be entitled to ancillary relief
      in
      the nature of damages or fee awards unless specifically so provided for
      herein.

    

    
      
         

      

      
        43

        
          

        

      

      
         

      

       

    

    SECTION
      8.05 Tail
      Insurance.
      At the
      Company's election, (i) the Company shall purchase prior to the Closing, and
      the
      Surviving Entity and Radware shall maintain following the Closing, "tail" or
      "run-off" insurance policies with a claims period of six (6) years from the
      Closing Date with respect to the current directors' and officers' liability
      insurance of the Company with substantially the same coverage and in amount
      and
      scope no less favorable, in the aggregate, than the existing directors' and
      officers' liability insurance policy of the Company (the "Current
      Policy")
      for
      claims arising from facts or events that existed or occurred on or prior to
      the
      Closing Date or (ii) if the Company shall not have obtained such policies,
      Radware will provide, or cause the Company to provide, for a period of not
      less
      than six (6) years after the Closing Date, the Covered Parties who are insured
      under the Current Policy with an insurance and indemnification policy that
      provides coverage for events occurring at or prior to the Closing that is no
      less favorable, taken as a whole, than the Current Policy or, if substantially
      equivalent insurance coverage is unavailable, the best available coverage;
      provided,
      however,
      that in
      no event shall the Surviving Entity be required to expend annually in excess
      of
      two hundred and fifty percent (250%) of the annual premium currently paid by
      the
      Company under the Current Policy (the "Insurance
      Amount");
      provided,
      further,
      however,
      that if
      the premium of such insurance coverage exceeds the Insurance Amount, the Company
      shall be obligated to obtain, and the Surviving Corporation shall be obligated
      to maintain, a policy with the greatest coverage available for a cost not
      exceeding the Insurance Amount. Radware shall pay or cause Company to pay for
      all premiums under the tail or run-off insurance policies and directors' and
      officers' insurance and indemnification policies contemplated by this
Section
      8.05
      not
      exceeding the Insurance Amount.

    

    SECTION
      8.06 Release.
      Upon
      payment of the Closing Date Purchase Price as provided for in this Agreement,
      the Company Stockholders and Company Noteholders hereby acknowledge that they
      are not owed any additional amounts and hereby release the Company, Radware,
      Parent, Merger Sub and the Surviving Corporation and any of their respective
      directors, officers, employees, agents and advisors from any amount owing to
      such noteholders or stockholders (i) in their capacity as noteholders and
      stockholders of the Company, (ii) pursuant to the Company Certificate of
      Incorporation or Company By-Laws or the Delaware Law, other than indemnification
      obligations to them in their capacity as officers and directors of the Company
      which may arise following the Closing Date
      (even if relating to events occurring prior to the Closing Date), or (iii)
      pursuant to the Key Contributor Plan or the Investor Incentive Agreement, other
      than the right to receive the Additional
      Payment,
      the Escrow Amount, the Additional Key Contributor Amount and the Additional
      Investor Incentive Amount in accordance with this Agreement; provided that
      nothing herein shall release any claims related to this Agreement or the
      performance by Radware of its obligations hereunder.

    

    ARTICLE
      IX

    GENERAL
      PROVISIONS

     

    SECTION
      9.01 Survival
      of Representations and Warranties.
      The
      representations and warranties made by the Company in this Agreement or any
      Ancillary Agreements shall survive the Effective Time until the eighteen (18)
      month anniversary of the Closing Date notwithstanding any investigation made
      by
      or on behalf of any party. The representations and warranties made by Radware
      and Parent in this Agreement shall survive the Effective Time until the eighteen
      (18) month anniversary of the Closing Date notwithstanding any investigation
      made by or on behalf of any party. Notwithstanding anything herein to the
      contrary, the representations and warranties made in Sections
      3.04, 3.14, and 4.02 shall
      survive the Effective Time until the expiration of all relevant statutes of
      limitations.

     

    
      
         

      

      
        44

        
          

        

      

      
         

      

       

    

    SECTION
      9.02 Notices.
      All
      notices and other communications given or made pursuant hereto shall be in
      writing and shall be deemed to have been duly given or made as of the date
      received if delivered personally, on the day after sending if sent by nationally
      recognized overnight courier or the third day after mailing if mailed by
      registered or certified mail (postage prepaid, return receipt requested) to
      the
      parties at the following addresses (or at such other address for a party as
      shall be specified by like changes of address, which shall be effective upon
      receipt), or on the date of sending if sent by electronic transmission, with
      confirmation received, to the telecopy numbers specified below:

    

    If
      to
      Parent

     

    
      	 	
              Radware,
                Ltd.

            
	 	
              22
                Raoul Wallenberg Street

            
	 	
              Tel
                Aviv 69710

              Israel

            
	 	
              Attn:
                Vice
                President of Legal Affairs

            
	 	
              Facsimile:
                972-3-7668982

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

            
	 	 
	 	
              Kramer
                Levin Naftalis & Frankel LLP

            
	 	
              1177
                Avenue of the Americas

            
	 	
              New
                York, New York 10036

            
	 	
              Attn:
                Ernest S. Wechsler, Esq.

            
	 	
              Facsimile:
                212-715-8000

            

    

    

    If
      to
      Radware [or Merger Sub]:

     

    
      	 	
              Radware,
                Inc.

            
	 	
              c/o
                Radware, Ltd.

            
	 	
              22
                Raoul Wallenberg Street

            
	 	
              Tel
                Aviv 69710

              Israel

            
	 	
              Attn:
                Vice
                President of Legal Affairs

            
	 	
              Facsimile:
                972-3-7668982

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

            
	 	 
	 	
              Kramer
                Levin Naftalis & Frankel LLP

            
	 	
              1177
                Avenue of the Americas

            
	 	
              New
                York, New York 10036

            
	 	
              Attn:
                Ernest S. Wechsler, Esq.

            
	 	
              Facsimile:
                212-715-8000

            

    

     

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    
      	 	 
	
              If
                to the Company:

            
	 	 
	 	
              Covelight
                Systems, Inc.

            
	 	
              6501
                Weston Parkway

            
	 	
              Suite
                355

            
	 	
              Cary,
                NC 27513

            
	 	
              Attn:
                Chief Executive Officer

            
	 	
              Facsimile:
                412-809-4201

            
	 	 

    

    

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

            
	 
	 	
              Wyrick
                Robbins Yates & Ponton LLP

            
	 	
              4101
                Lake Boone Trail

            
	 	
              Suite
                300

            
	 	
              Raleigh,
                NC 27607

            
	 	
              Attn:
                W. David Mannheim

            
	 	
              Facsimile:
                (919) 781-4865

            
	 	 
	
              If
                to the Sellers Representative, the address set forth on the signature
                page
                hereto or
                such other person appointed pursuant to Section
                9.16.

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

            
	 
	 	
              Wyrick
                Robbins Yates & Ponton LLP

            
	 	
              4101
                Lake Boone Trail

            
	 	
              Suite
                300

            
	 	
              Raleigh,
                NC 27607

            
	 	
              Attn:
                W. David Mannheim

            
	 	
              Facsimile:
                (919) 781-4865

            

    

     

    SECTION
      9.03 Waiver.
      Radware
      may, with respect to the Company, and the Company or both Sellers
      Representatives may, with respect to Radware, Parent or Merger Sub,
      (a) extend the time for the performance of any of its obligations or other
      acts, (b) waive any inaccuracies in its representations and warranties
      contained herein or in any document delivered pursuant hereto or (c) waive
      compliance with any of its agreements or conditions contained herein. Any such
      extension or waiver shall be valid if set forth in an instrument in writing
      signed by the party or parties to be bound thereby.

     

    SECTION
      9.04 Headings.
      The
      headings contained in this Agreement are for reference purposes only and shall
      not affect in any way the meaning or interpretation of this
      Agreement.

     

    SECTION
      9.05 Severability.
      If any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced by any rule of Law or public policy, all other conditions and
      provisions of this Agreement shall nevertheless remain in full force and effect
      so long as the economic or legal substance of the transactions contemplated
      hereby is not affected in any manner adverse to any party. Upon such
      determination that any term or other provision is invalid, illegal or incapable
      of being enforced, the parties hereto shall negotiate in good faith to modify
      this Agreement so as to effect the original intent of the parties as closely
      as
      possible in an acceptable manner to the end that transactions contemplated
      hereby are fulfilled to the extent possible.
      To the
      extent that any or all provisions of this Agreement are not binding on any
      of
      the parties hereto, such provisions shall nevertheless remain in full force
      and
      effect and be binding on all the other parties hereto.

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

       

    

    SECTION
      9.06 Entire
      Agreement; Amendment.
      This
      Agreement (including any exhibits and schedules hereto), the Company Disclosure
      Schedule, the Ancillary Agreements and the Confidentiality Agreement constitute
      the entire agreement among the parties hereto and supersede all prior and
      contemporaneous agreements and undertakings, both written and oral, among the
      parties, or any of them, with respect to the subject matter hereof. This
      Agreement may be amended in writing executed by Radware, Parent, the Company
      and
      the Sellers Representatives, and any provision of this Agreement may only be
      waived by the party for whose benefit the applicable provision exists, provided
      that the Sellers Representatives may waive on behalf of the Company
      Recipients.

     

    SECTION
      9.07 Assignment.
      Neither
      this Agreement nor any of the rights, interests or obligations under this
      Agreement may be assigned or delegated, in whole or in part, by operation of
      law
      or otherwise by any of the parties hereto without the prior written consent
      of
      the other parties, and any such assignment without such prior written consent
      shall be null and void, except that Radware and/or Merger Sub may assign this
      Agreement to any direct or indirect wholly-owned subsidiary of Radware or Parent
      without consent of the Company, provided that Radware and Parent shall remain
      liable for all of its obligations under this Agreement. Subject to the preceding
      sentence, this Agreement shall be binding upon, inure to the benefit of, and
      be
      enforceable by, the parties hereto and their respective successors and permitted
      assigns.

     

    SECTION
      9.08 Parties
      in Interest.
      This
      Agreement shall be binding upon and inure solely to the benefit of each party
      hereto, including for purposes of Article
      VIII
      Indemnitees, and its successors and nothing in this Agreement, express or
      implied, is intended to or shall confer upon any other person any right, benefit
      or remedy of any nature whatsoever under or by reason of this
      Agreement.

     

    SECTION
      9.09 Failure
      or Indulgence Not Waiver; Remedies Cumulative.
      No
      failure or delay on the part of any party hereto in the exercise of any right
      hereunder shall impair such right or be construed to be a waiver of, or
      acquiescence in, any breach of any representation, warranty or agreement herein,
      nor shall any single or partial exercise of any such right preclude other or
      further exercise thereof or of any other right. All rights and remedies existing
      under this Agreement are cumulative to, and not exclusive of, any rights or
      remedies otherwise available.

     

    SECTION
      9.10 Governing
      Law.
      THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
      LAWS OF THE STATE OF DELAWARE.

     

    
      
         

      

      
        47

        
          

        

      

      
         

      

       

    

    SECTION
      9.11 Counterparts.
      This
      Agreement may be executed in two (2) or more counterparts, and by the different
      parties hereto in separate counterparts, each of which when executed shall
      be
      deemed to be an original but all of which taken together shall constitute one
      and the same agreement.

     

    SECTION
      9.12 Waiver
      of Jury Trial.
      EACH OF
      THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
      BY
      LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
      (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
      TO
      THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

     

    SECTION
      9.13 Jurisdiction;
      Forum.
      Each of
      the parties hereto (i) consents to submit itself to the non-exclusive
      personal jurisdiction of any federal court located in the Borough of Manhattan
      of the State of New York in the event any dispute arises out of this Agreement
      or any of the transactions contemplated by this Agreement and (ii) agrees that
      it will not attempt to deny or defeat such personal jurisdiction by motion
      or
      other request for leave from any such court.

     

    SECTION
      9.14 Definition
      of Knowledge.
      As used
      herein, the words “knowledge” or “known” shall, with respect to the Company,
      mean the actual knowledge of the persons whose names are set forth on
Schedule
      9.14.

     

    SECTION
      9.15 Specific
      Performance and Injunctive Relief.
      The
      parties hereto agree that irreparable damage would occur in the event that
      any
      of the provisions of this Agreement were not performed in accordance with their
      specific terms or were otherwise breached or threatened to be breached. It
      is
      accordingly agreed that the parties shall be entitled to seek a preliminary
      and
      permanent injunction or injunctions to prevent breaches, or threatened breaches,
      of this Agreement and to enforce specifically the terms and provisions hereof
      in
      any court of the United States or any state having jurisdiction, without the
      need to post bond or other security, this being in addition to any other remedy
      to which they are entitled at law or in equity.

     

    SECTION
      9.16 Appointment
      of Sellers Representatives.

    

    (a) Each
      Company Recipient hereby irrevocably constitutes and appoints each of Intersouth
      VI, LP and Aurora IV, LLC as a “Sellers
      Representative”
and
      (ii) irrevocably constitutes and appoints each Sellers Representative as such
      Company Recipient’s true and lawful agent, proxy and attorney-in-fact pursuant
      to this Section
      9.16
      and (ii)
      agrees to the provisions of this Section
      9.16.
      Both
      Sellers Representatives shall have full power and authority to act for each
      Company Recipient and in each Company Recipient’s name, place and stead, and in
      any and all capacities to do and perform every act and thing required or
      permitted to be done in connection with the transactions contemplated by this
      Agreement and the Escrow Agreement upon and immediately following the Effective
      Time, as fully to all intents and purposes as such Company Recipient might
      or
      could do in person, including, without limitation, all decisions relating to
      the
      defense and/or settlement of any claims for which any Radware Indemnitee may
      claim to be entitled to indemnity pursuant to Article VIII
      hereof,
      the amendment of this Agreement, the receipt of all payments and notices and
      the
      giving of all consents and waivers. All decisions and actions by both Sellers
      Representatives shall be binding upon all of the Company Recipients, and no
      Company Recipient shall have the right to object to, dissent from, protest
      or
      otherwise contest the same.

    

    
      
         

      

      
        48

        
          

        

      

      
         

      

       

    

    (b) Each
      Company Recipient hereby agrees that (i) the provisions of this
Section
      9.16
      are
      independent and severable, are irrevocable and coupled with an interest and
      shall be enforceable notwithstanding any rights or remedies any Company
      Recipient may have in connection with the transactions contemplated by this
      Agreement, (ii) the remedy at law for any breach of the provisions of this
Section
      9.16
      would be
      inadequate, (iii) Radware shall be entitled to temporary and permanent
      injunctive relief without the necessity of proving damages if Radware brings
      an
      action to enforce the provisions of this Section
      9.16
      and
      (iv) the provisions of this Section
      9.16
      shall be
      binding upon the heirs, successors and assigns of each Company
      Recipient.

    

    (c) Any
      notice or communication delivered by Radware, Merger Sub or the Surviving
      Corporation to both Sellers Representatives shall, as between Radware, Merger
      Sub and the Surviving Corporation, on the one hand, and the Company Recipients,
      on the other, be deemed to have been delivered to all Company Recipients.
      Radware, Merger Sub and the Surviving Corporation shall be entitled to rely
      exclusively upon any communications or writings given or executed by both
      Sellers Representatives and shall not be liable in any manner whatsoever for
      any
      action taken or not taken in reliance upon the actions taken or not taken or
      communications or writings given or executed by both Sellers Representatives.
      Any Company Recipient that wishes to deliver any notice, or take any other
      action with respect to any matter arising, under this Agreement must do so
      through the Sellers Representatives, and Radware, Merger Sub and the Surviving
      Corporation shall be explicitly entitled to disregard any notices or
      communications given or made by the Company Recipients unless given or made
      through the Sellers Representatives, and such notices or communications shall
      be
      of no force or effect.

    

    (d) Each
      Company Recipient acknowledges that the Sellers Representatives are acting
      as
      his, her or its agent as set forth above and each agrees to severally, in
      proportion to its Pro Rata Interest, indemnify and hold harmless and defend
      each
      Sellers Representative, his agents and assigns (collectively, the “Indemnitees”),
      against all liabilities, claims, actions, damages, losses and expenses
      (including, without limitation, legal and other professional fees and expenses,
      and litigation costs) of any kind (whether known or unknown, fixed or
      contingent) arising out of or in connection with (i) the Sellers
      Representative’s omissions to act, or actions taken, resulting from, arising out
      of, or incurred in connection with, or otherwise with respect to this Agreement
      and the Escrow Agreement, or (ii) services taken with respect to this Agreement
      and the Escrow Agreement or believed to be in the scope of the Indemnitee’s
      authority, provided that the Indemnitee in question has not acted with
      intentional misconduct or fraud. 

    

    (e) The
      Sellers Representatives may consult with legal counsel, independent public
      accountants and other experts selected by both Sellers Representatives. The
      Sellers Representatives shall not be responsible or liable to any Company
      Recipient for any act or omission of any kind so long as he has acted in good
      faith (any such action or omission pursuant to an order, judgment or decree
      of
      any court or administrative agency, or advice of legal counsel, public
      accountants and other experts selected by the Sellers Representative shall
      be
      conclusive evidence of such good faith), or for the expiration of rights under
      any statute of limitations with respect to this Agreement and the Escrow
      Agreement. 

    

    
      
         

      

      
        49

        
          

        

      

      
         

      

       

    

    (f) Upon
      and
      after the Effective Time, in the case of the unwillingness to serve or other
      unavailability of a Sellers Representative, the Company Recipients who receive
      a
      majority of the Net Aggregate Merger Consideration shall have the right,
      exercisable by written notice to Radware and the Escrow Agent, to designate
      a
      replacement Sellers Representative.

    

    SECTION
      9.17 QUARTERLY
      NET REVENUE UPDATES.
      From
      and after the Effective Time, Radware and Parent shall deliver to the Sellers
      Representatives quarterly statements detailing the Net Revenue (used to
      calculate the Additional Payment under this Agreement) recognized in each three
      month period from the Effective Time, with a schedule showing the products
      from
      the Inflight and Percept Product Line sold and the prices charged for such
      products, within forty (40) days of the end of each such period. It is
      understood that such updates are subject to adjustment in the ordinary course
      of
      business and only the final determination of the Additional Payment pursuant
      to
Section
      2.08
      will be
      binding on the parties.

    

    SECTION
      9.18. PARENT
      GUARANTY.
      Parent
      does hereby absolutely and unconditionally guarantee to each Company Recipient
      and its successors and assigns the due and punctual payment of all amounts
      payable and performance of all obligations by Radware under this Agreement.
      Parent expressly waives presentment, demand, protest, and notice of dishonor
      of
      any such payments and obligations. This obligation and liability on the part
      of
      the Parent shall be primary and not secondary, payable immediately upon demand
      without recourse first having been had by any Company Recipient against Radware.
      Parent covenants, warrants and represents to each Company Recipient that this
      guaranty is enforceable against Parent in accordance with its
      terms.

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
      executed as of the date first written above by a duly authorized officer or
      other person.

    

    

    COVELIGHT
      SYSTEMS, INC.

    

    By:
      /s/
      Spencer
      Snedecor                             

    Name: Spencer
      Snedecor

    Title:
      CEO

    

    

    RADWARE
      DELAWARE CORP.

    

    By:
      /s/
      Roy
      Zisapel                                  
      

    Name:
      Roy
      Zisapel

    Title:
      Chief Executive Officer 

    

    

    RADWARE,
      INC.

    

    By:
      /s/
      Roy
      Zisapel                                        

    Name:
      Roy
      Zisapel

    Title:
      Chief Executive Officer

    

    

    RADWARE,
      LTD.

    

    By:
      /s/
      Roy
      Zisapel                                        

    Name:
      Roy
      Zisapel

    Title:
      Chief Executive Officer

    
       

      
         

      

      
        S-1

        
          

        

      

      
         

      

    

    SELLERS
      REPRESENTATIVES:

    

    

    INTERSOUTH
      PARTNERS VI, L.P.

    

    
      	
              By:
                

            	
              Intersouth
                Associates VI, LLC,
                its general partner

            

    

    

    
      	By:	
              /s/
                Kip
                Frey                                     
                

            

    

    Kip
      Frey,
      Member acting pursuant to 

    power
      of
      attorney

    
      	Address:	
              Crowe
                Building

            

    

    406
      Blackwell Street

    Suite
      200

    Durham,
      NC 27701

    
      	Fax:	
              (919)
                493-6649

            

    

    

    

    AURORA
      VENTURES IV, LLC

    

    By:
      A.V.
      Management IV, L.L.C, its Managing Member

    

    By:
      /s/
      M.
      Scott
      Albert                                  

    Name:
      Scott Albert

    Title:
      Manager

    
      	Address:	
              2525
                Meridian Parkway

            

    

    Suite
      220

    Durham,
      NC 27713

    
      	Fax:	
              (919)
                484-0444

            

    

    

    
      
         

      

      
        S-2

        
          

        

      

      
         

      

    

    COMPANY
      NOTEHOLDERS:

    

    

    INTERSOUTH
      PARTNERS VI, L.P.

    

    
      	
              By:
                

            	
              Intersouth
                Associates VI, LLC,
                its general partner

            

    

    

    
      	By:	
              /s/
                Kip
                Frey                                     
                

            

    

    Kip
      Frey,
      Member acting pursuant to 

    power
      of
      attorney

    

    

    NEXTPOINT
      PARTNERS, L.P.

    

    
      	By:	
              NextPoint
                GP, LLC, its general partner

            

    

    

    
      	By:	
              /s/
                Michael
                Faber                           
                

            

    

    Michael
      Faber, Member

    

    

    AURORA
      VENTURES IV, LLC

    

    
      	By:	
              A.V.
                Management IV, L.L.C, its Managing
                Member

            

    

    

    By:
      /s/
      M.
      Scott
      Albert                                  

    Name:
      M.
      Scott Albert

    Title:
      Manager

    

    
      
         

      

      
        S-3

        
          

        

      

      
         

      

    

    COMPANY
      STOCKHOLDERS:

    

    Name
      of
      Stockholder: David
      Logan                                                                         

    

    

    By: 
      /s/
      Jim
      Ford                                                                                                          

    (signature)

    

    Name: Jim
      Ford, as Attorney-in-fact as Secretary of Covelight Systems,
      Inc. 

    

    Title
      (if
      applicable): Attorney-in-fact
      as Secretary of Covelight Systems, Inc.

    

    
      
         

      

      
        S-4

        
          

        

      

      
         

      

    

    COMPANY
      STOCKHOLDERS:

    

    Name
      of
      Stockholder: Ken
      Gramley                                                                         

    

    

    By: 
      /s/
      Jim
      Ford                                                                                                          

    (signature)

    

    Name: Jim
      Ford, as Attorney-in-fact as Secretary of Covelight Systems,
      Inc. 

    

    Title
      (if
      applicable): Attorney-in-fact
      as Secretary of Covelight Systems, Inc.

    

    
      
         

      

      
        S-5

        
          

        

      

      
         

      

    

    COMPANY
      STOCKHOLDERS:

    

    

    Name
      of
      Stockholder: David
      Motsinger                                                                 

    

    

    By: 
      /s/
      Jim
      Ford                                                                                            
             

    (signature)

    

    Name: Jim
      Ford, as Attorney-in-fact as Secretary of Covelight Systems,
      Inc.

    

    Title
      (if
      applicable): Attorney-in-fact
      as Secretary of Covelight Systems, Inc.

    

    
      
         

      

      
        S-6

        
          

        

      

      
         

      

    

    COMPANY
      STOCKHOLDERS:

    

    

    Name
      of
      Stockholder: Acuitive,
      Inc.                                                                        

    

    

    By: 
      /s/
      Jim
      Ford                                                                                                          

    (signature)

    

    Name: Jim
      Ford, as Attorney-in-fact as Secretary of Covelight Systems,
      Inc. 

    

    Title
      (if
      applicable): Attorney-in-fact
      as Secretary of Covelight Systems, Inc.

    

    
      
         

      

      
        S-7

        
          

        

      

      
         

      

    

    COMPANY
      STOCKHOLDERS:

    

    

    Name
      of
      Stockholder: James
      Beam                                                                           

    

    

    By: 
      /s/
      Jim
      Ford                                                                                                          

    (signature)

    

    Name: Jim
      Ford, as Attorney-in-fact as Secretary of Covelight Systems,
      Inc. 

    

    Title
      (if
      applicable): Attorney-in-fact
      as Secretary of Covelight Systems, Inc.

    

    
      
         

      

      
        S-8

        
          

        

      

      
         

      

    

    COMPANY
      STOCKHOLDERS:

    

    

    Name
      of
      Stockholder: Byron
      Hargett                                                                      

    

    

    By: 
      /s/
      Jim
      Ford                                                                                                          

    (signature)

    

    Name: Jim
      Ford, as Attorney-in-fact as Secretary of Covelight Systems,
      Inc. 

    

    Title
      (if
      applicable): Attorney-in-fact
      as Secretary of Covelight Systems, Inc.

    

    
      
         

      

      
        S-9

        
          

        

      

      
         

      

    

    COMPANY
      STOCKHOLDERS:

    

    

    Name
      of
      Stockholder: Doug
      Hester                                                                         

    

    

    By: 
      /s/
      Jim
      Ford                                                                                                          

    (signature)

    

    Name: Jim
      Ford, as Attorney-in-fact as Secretary of Covelight Systems,
      Inc. 

    

    Title
      (if
      applicable): Attorney-in-fact
      as Secretary of Covelight Systems, Inc.

    

    
      
         

      

      
        S-10

        
          

        

      

      
         

      

    

    COMPANY
      STOCKHOLDERS:

    

    

    Name
      of
      Stockholder: Sam
      Alsous                                                                          

    

    

    By: 
      /s/
      Jim
      Ford                                                                                                          

    (signature)

    

    Name: Jim
      Ford, as Attorney-in-fact as Secretary of Covelight Systems,
      Inc. 

    

    Title
      (if
      applicable): Attorney-in-fact
      as Secretary of Covelight Systems, Inc.

    

    
      
         

      

      
        S-11

        
          

        

      

      
         

      

    

    COMPANY
      STOCKHOLDERS:

    

    

    Name
      of
      Stockholder: Ken
      Brumer                                                                           

    

    

    By: 
      /s/
      Jim
      Ford                                                                                                          

    (signature)

    

    Name: Jim
      Ford, as Attorney-in-fact as Secretary of Covelight Systems,
      Inc. 

    

    Title
      (if
      applicable): Attorney-in-fact
      as Secretary of Covelight Systems, Inc.

    

    
      
         

      

      
        S-12

        
          

        

      

      
         

      

    

    COMPANY
      STOCKHOLDERS:

    

    

    Name
      of
      Stockholder: Anthony
      Schmidt                                                                

    

    

    By: 
      /s/
      Jim
      Ford                                                                                                          

    (signature)

    

    Name: Jim
      Ford, as Attorney-in-fact as Secretary of Covelight Systems,
      Inc. 

    

    Title
      (if
      applicable): Attorney-in-fact
      as Secretary of Covelight Systems, Inc.

    

    
      
         

      

      
        S-13

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