AGREEMENT AND PLAN OF MERGER
Among
INTERNATIONAL BUSINESS MACHINES CORPORATION
KENNESAW ACQUISITION CORPORATION
and
MRO SOFTWARE, INC.

Dated as of August 3, 2006

AGREEMENT AND PLAN OF MERGER dated as of August 3 2006 (this "Agreement"), by and among INTERNATIONAL BUSINESS MACHINES CORPORATION, a New York corporation ("Parent"), KENNESAW ACQUISITION CORPORATION, a Massachusetts corporation and a wholly owned subsidiary of Parent ("Sub"), and MRO SOFTWARE, INC., a Massachusetts corporation (the "Company").

WHEREAS the Board of Directors of each of the Company and Sub deems it in the best interests of their respective stockholders to consummate the merger (the "Merger"), on the terms and subject to the conditions set forth in this Agreement, of Sub with and into the Company in which the Company would become a wholly-owned subsidiary of Parent, and such Boards of Directors have adopted this Agreement (and, in the case of the Board of Directors of the Company, recommended that this Agreement be approved by the Company's stockholders);

WHEREAS Parent, Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the Merger;

WHEREAS concurrently with the execution of this Agreement and as a condition to the willingness of Parent to enter into this Agreement, certain employees of the Company have executed offer letters (the "Offer Letters") regarding the employment of such employees following the consummation of the Merger; and

WHEREAS concurrently with the execution of this Agreement and as a condition to the willingness of Parent to enter into this Agreement, Parent has entered into agreements pursuant to which certain stockholders and employees have agreed, among other things, to certain non-competition, non-solicitation and no hire restrictions.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I

The Merger

SECTION 1.01. The Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Massachusetts Business Corporation Act (the "MBCA"), Sub shall be merged with and into the Company at the Effective Time. At the Effective Time, the separate corporate existence of Sub shall cease and the Company shall continue as the surviving corporation (the "Surviving Corporation").

SECTION 1.02. Closing. The closing of the Merger (the "Closing") will take place at 10:00 a.m., New York time, on a date to be specified by the parties, which shall be no later than the second business day after satisfaction or waiver of the conditions set forth in Article VI (other than those that by their terms are to be satisfied or waived at the Closing, it being understood that the occurrence of the Closing shall remain subject to the satisfaction or waiver of such conditions at Closing), at the offices of Cravath, Swaine & Moore LLP, 825 Eighth Avenue, New York, New York 10019, unless another time, date or place is agreed to in writing by Parent and the Company; provided, however, that if all the conditions set forth in Article VI shall not have been satisfied or waived on such second business day, then the Closing shall take place on the first business day on which all such conditions shall have been satisfied or waived. The date on which the Closing occurs is referred to in this Agreement as the "Closing Date".

SECTION 1.03. Effective Time of the Merger. Upon the terms and subject to the conditions set forth in this Agreement, prior to the Closing Parent and the Company shall jointly prepare, and immediately following the Closing the Company and Sub shall execute and cause to be filed with the Secretary of the Commonwealth of Massachusetts, articles of merger (the "Articles of Merger") in such form as is required by, and executed in accordance with, the relevant provisions of the MBCA. The Merger shall become effective at such date and time as the Articles of Merger are duly filed with the Secretary of the Commonwealth of Massachusetts or at such subsequent date and time as Parent and the Company shall agree and specify in the Articles of Merger. The date and time at which the Merger becomes effective is referred to in this Agreement as the "Effective Time".

SECTION 1.04. Effects of the Merger. The Merger shall have the effects set forth in the applicable provisions of the MBCA.

SECTION 1.05. Articles of Organization and Bylaws. (a) The Restated Articles of Organization of the Company, as amended, (the "Company Articles") as in effect immediately prior to the Effective Time shall be the Articles of Organization of the Surviving Corporation except that Article III of the Company Articles shall be amended at the Effective Time to provide that the total number of shares of stock that the Surviving Corporation is authorized to issue shall be 1,000 shares of Common Stock having a par value of $0.01 per share, and, as so amended, such Restated Articles of Organization shall be the Restated Articles of Organization of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable Law.

(b) The Bylaws of Sub as in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable Law.

SECTION 1.06. Directors. The directors of Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

SECTION 1.07. Officers. The officers of the Sub immediately prior to the Effective Time shall be the officers of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

ARTICLE II

Conversion of Securities

SECTION 2.01. Conversion of Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holder of any shares of Common Stock, par value $0.01 per share, of the Company (the "Company Common Stock"), or the holder of any shares of capital stock of Sub:

(a) Capital Stock of Sub. Each issued and outstanding share of common stock of Sub, par value $0.01 per share, shall be converted into and become one fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.

(b) Cancelation of Treasury Stock and Parent-Owned Stock. All shares of Company Common Stock that are owned as treasury stock by the Company or owned by Parent or Sub immediately prior to the Effective Time shall automatically be canceled and retired and shall cease to exist and no consideration shall be delivered or deliverable in exchange therefor.

(c) Conversion of Company Common Stock. Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (after giving effect to the purchase described in Section 5.04(b) with respect to the ESPP and other than (i) shares to be canceled and retired in accordance with Section 2.01(b) and (ii) Restricted Shares to the extent set forth in Section 5.04) shall be converted into the right to receive $25.80 in cash, without interest (the "Merger Consideration"). At the Effective Time such shares shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of a certificate that immediately prior to the Effective Time represented any such shares (a "Certificate") shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration in accordance with the terms of this Agreement. The right of any holder of any share of Company Common Stock to receive the Merger Consideration shall be subject to and reduced by the amount of any withholding that is required under applicable Tax Law, such withholding to be pursuant to the terms of Section 2.02(f) hereof and any other requirements under applicable Tax Law.

SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to the Effective Time, Parent shall designate a bank or trust company reasonably acceptable to the Company to act as agent for the payment of the Merger Consideration upon surrender of Certificates (the "Paying Agent"), and, from time to time after the Effective Time, Parent shall make available to the Paying Agent funds in amounts and at the times necessary for the payment of the Merger Consideration pursuant to Section 2.01(c) upon surrender of Certificates, it being understood that any and all interest or other amounts earned with respect to funds made available to the Paying Agent pursuant to this Agreement shall be turned over to Parent.

(b) Exchange Procedure. As soon as reasonably practicable after the Effective Time, the Paying Agent shall mail to each holder of record of a Certificate (i) a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates held by such person shall pass, only upon proper delivery of the Certificates to the Paying Agent and shall be in a form and have such other provisions as Parent may reasonably specify and the Company shall reasonably approve prior to the Effective Time) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon surrender of a Certificate for cancelation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly completed and validly executed, and such other documents as may reasonably be required by the Paying Agent, the holder of such Certificate shall be entitled to receive in exchange therefor the amount of cash equal to the Merger Consideration that such holder has the right to receive pursuant to Section 2.01(c), and the Certificate so surrendered shall forthwith be canceled. Subject to the terms of this Agreement, neither Parent nor Sub shall take any action that would prevent the Paying Agent from making payment of the Merger Consideration in accordance with its customary procedures. In the event of a transfer of ownership of Company Common Stock that is not registered in the stock transfer books of the Company, payment of the Merger Consideration in exchange therefor may be made to a person other than the person in whose name the Certificate so surrendered is registered if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting `such payment shall pay any transfer or other Taxes required by reason of the payment to a person other than the registered holder of such Certificate or establish to the satisfaction of the Surviving Corporation that such tax has been paid or is not applicable. No interest shall be paid or shall accrue on the cash payable upon surrender of any Certificate.

(c) No Further Ownership Rights in Company Common Stock. All cash paid upon the surrender of a Certificate in accordance with the terms of this Article II shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock formerly represented by such Certificate. At the close of business on the day on which the Effective Time occurs, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Paying Agent for transfer or any other reason, they shall be canceled and exchanged as provided in this Article II.

(d) No Liability. None of Parent, Sub, the Company or the Paying Agent shall be liable to any person in respect of any cash which would otherwise have been payable in respect of any Certificate which is delivered to a public official in accordance with any applicable abandoned property, escheat or similar Law. If any Certificates shall not have been surrendered prior to two years after the Effective Time (or immediately prior to such earlier date on which any Merger Consideration would otherwise escheat to or become the property of any Governmental Entity), any such Merger Consideration in respect thereof shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation, free and clear of all claims or interest of any person previously entitled thereto.

(e) Lost Certificates. If any Certificate shall have been lost, stolen, defaced or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen, defaced or destroyed and, if required by the Surviving Corporation, the posting by such person of a bond in such reasonable and customary amount as the Surviving Corporation may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent shall pay the Merger Consideration in respect of such lost, stolen, defaced or destroyed Certificate.

(f) Withholding Rights. Parent, the Surviving Corporation or the Paying Agent shall be entitled to deduct and withhold from the Merger Consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Common Stock such amounts as Parent, the Surviving Corporation or the Paying Agent is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the "Code"), or any provision of state, local or foreign Tax Law. To the extent that amounts are so withheld and paid over to the appropriate taxing authority by Parent, the Surviving Corporation or the Paying Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock in respect of which such deduction and withholding was made by Parent, the Surviving Corporation or the Paying Agent.

ARTICLE III

Representations and Warranties

SECTION 3.01. Representations and Warranties of the Company. Except as set forth in the Company Letter (with specific reference to the section of this Agreement to which the information stated in such disclosure relates; provided that information contained in any section of the Company Letter shall be deemed to be disclosed with respect to any other section of this Agreement to the extent that it is readily apparent from the face of such disclosure that such information is applicable to such other section of this Agreement) delivered by the Company to Parent prior to the execution and delivery of this Agreement, the Company represents and warrants to Parent and Sub as follows:

(a) Organization, Standing and Corporate Power. Each of the Company and the Subsidiaries (i) is a corporation duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization (except, in the case of good standing, for entities organized under the Laws of any jurisdiction that does not recognize such concept), (ii) has all requisite corporate, company, partnership or other organizational power and authority to carry on its business as now being conducted and (iii) is duly qualified or licensed to do business and is in good standing in each jurisdiction (except, in the case of good standing, any jurisdiction that does not recognize such concept) in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary or desirable, other than where the failure to be so organized, existing, qualified or licensed or in good standing (except in the case of clause (i) above with respect to the Company), individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect on the Company. The Company has made available to Parent complete and accurate copies of the Company Articles and the Bylaws of the Company, as amended (the "Company Bylaws") and the certificate of incorporation and bylaws (or similar organizational documents) of each of the Subsidiaries, in each case as amended to the date of this Agreement. The Company has made available to Parent and its representatives complete and accurate copies of the minutes (or, in the case of draft minutes, the most recent drafts thereof) of all meetings of the stockholders, the Board of Directors and each committee of the Board of Directors of the Company and each of the Subsidiaries held since October 1, 2003.

(b) Subsidiaries. Section 3.01(b) of the Company Letter sets forth a complete and accurate list of each Subsidiary and its place of organization. All the outstanding shares of capital stock of, or other equity or voting interests in, each such Subsidiary are owned by the Company, by one or more wholly-owned Subsidiaries or by the Company and one or more wholly-owned Subsidiaries, free and clear of all pledges, claims, liens, charges, options to purchase, security interests or other encumbrances of any kind or nature whatsoever (collectively, "Liens"), except for transfer restrictions imposed by applicable securities Laws and are duly authorized, validly issued, fully paid and nonassessable. Except for the capital stock of, or other equity or voting interests in, the Subsidiaries, the Company does not own, directly or indirectly, any capital stock of, or other equity or voting interests in, any person.

(c) Capital Structure. (i) The authorized capital stock of the Company consists of 50,000,000 shares of Company Common Stock and 1,000,000 shares of Preferred Stock, par value $0.01 per share of the Company (the "Company Preferred Stock"). At the close of business on July 17, 2006, (A) 26,624,356 shares of Company Common Stock (excluding treasury shares) were issued and outstanding, including 431,991 shares of Company Common Stock that are subject to transfer restrictions and subject to forfeiture back to the Company or repurchase by the Company pursuant to agreements with the Company ( "Restricted Shares"), (B) 11,699 shares of Company Common Stock were held by the Company as treasury shares, (C) 4,786,129 shares of Company Common Stock were subject to outstanding options (other than rights under the Company's 2002 Employee Stock Purchase Plan (the "ESPP")) to acquire shares of Company Common Stock pursuant to the Company's Amended and Restated 1999 Equity Incentive Plan (the "1999 Equity Incentive Plan") and the Company's 1994 Incentive and Nonqualified Stock Option Plan (the "1994 Stock Option Plan") (such plans, together with the ESPP, the "Company Stock Plans") (together with any other stock options granted after July 17, 2006 under the Company Stock Plans pursuant to the terms of this Agreement or disclosed in the Company Letter, the "Stock Options") and (D) 543,071 shares of Company Common Stock were reserved and available for issuance by the Company pursuant to the ESPP. Other than the Company Stock Plans, there is no Contract, plan or other arrangement providing for the grant of options exercisable for or into shares of Company Common Stock by the Company or any of the Subsidiaries. No shares of Company Preferred Stock are issued or outstanding. No shares of Company Common Stock are owned by any Subsidiary. The Company has made available to Parent (A) a complete and accurate list, as of the close of business on July 17, 2006, of all outstanding Stock Options, the number of shares subject to each such Stock Option, the grant date, exercise price and expiration date of each such Stock Option and the name of the holder thereof and an indication of whether or not such Stock Option was intended at the time of grant to qualify as an "incentive stock option" under Section 422 of the Code and (B) a complete and accurate list, as of the close of business on July 17, 2006, of all Restricted Shares, the grant dates, the names of the holders thereof and the form of Restricted Share grant agreement, and any Restricted Share grant agreements that differ in any material respect from such form, pursuant to which each Restricted Share was granted. As of the date of this Agreement, other than pursuant to the Stock Options, rights under the ESPP, the Restricted Shares and the Company's Series A Junior Participating Preferred Stock purchase rights (the "Company Rights") issued pursuant to the Rights Agreement dated January 27, 1998, between the Company and BankBoston, N.A. (the "Company Rights Agreement"), there are no outstanding rights of any person to receive from the Company Company Common Stock under the Company Stock Plans or otherwise, on a deferred basis or otherwise. Based upon the assumptions set forth in Section 3.01(c)(i) of the Company Letter, and further assuming that the fair market value per share of Company Common Stock on the last day of the ESPP Offering Period will be equal to the Merger Consideration, the Company estimates that 24,853 shares of Company Common Stock will be issued under the ESPP immediately prior to the Effective Time pursuant to the exercise of purchase rights by participants in the current ESPP Offering Period.

(ii) Except as set forth in Section 3.01(c)(i), as of the close of business on July 17, 2006, no shares of capital stock of, or other equity or voting interests in, the Company, or options, warrants, shares of deferred stock, restricted stock awards, stock appreciation rights, phantom stock awards or other rights to acquire any such stock or securities or similar rights that are linked to the value of the Company Common Stock or the value of the Company or any part thereof, in each case issued by the Company, were outstanding. From July 17, 2006 to the date of this Agreement, (A) there have been no issuances by the Company of shares of capital stock of, or other equity or voting interests in, the Company other than issuances of shares of Company Common Stock and attached Company Rights pursuant to the exercise of Stock Options or rights under the ESPP, in each case outstanding as of July 17, 2006 and only if and to the extent required by their terms as in effect on July 17, 2006 and (B) there have been no issuances by the Company of options, warrants, shares of deferred stock, restricted stock awards, stock appreciation rights, phantom stock awards, other rights to acquire shares of capital stock or other equity or voting interests from the Company or other rights that are linked to the value of Company Common Stock or the value of the Company or any part thereof, other than rights under the ESPP.

(iii) All outstanding shares of capital stock of the Company are, and all shares that may be issued pursuant to the Company Stock Plans will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no (A) bonds, debentures, notes or other indebtedness of the Company or any of the Subsidiaries, and (B) except as set forth in this Section 3.01(c), securities or other instruments or obligations of the Company or any of the Subsidiaries, in each case under clause (A) or (B), the value of which is in any way based upon or derived from any capital stock of, or other equity or voting interests in, the Company or which has or which by its terms may have at any time (whether actual or contingent) the right to vote (or which is convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or any of the Subsidiaries may vote. Except (1) as set forth in this Section 3.01(c) and (2) for rights under the ESPP, the Company Rights Agreement or the Stock Options in effect as of the date of this Agreement, there are no securities, options, warrants, calls, rights or Contracts of any kind to which the Company or any of the Subsidiaries is a party, or by which the Company or any of the Subsidiaries is bound, obligating the Company or any of the Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of, or other equity or voting interests in, or securities convertible into, or exchangeable or exercisable for, shares of capital stock of, or other equity or voting interests in, the Company or any of the Subsidiaries or obligating the Company or any of the Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right or Contract. With respect to the Stock Options, (u) each Stock Option intended to qualify as an "incentive stock option" under Section 422 of the Code so qualifies, (v) each grant of a Stock Option was duly authorized no later than the date on which the grant of such Stock Option was by its terms to be effective (the "Grant Date") by all necessary corporate action, including, as applicable, approval by the Board of Directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, (w) the award agreement governing such grant (if any) was duly delivered by the Company to the recipient, (x) each such grant was made in accordance with the terms of the Company Stock Plan under which it was issued, the Exchange Act and all other applicable Laws and regulatory rules or requirements, including the rules of The Nasdaq Global Select Market or any other exchange on which Company securities are traded, (y) the per share exercise price of each Stock Option was greater than or equal to the fair market value of a share of Company Common Stock on the applicable Grant Date and (z) each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company and disclosed in the Company's Filed SEC Documents in accordance with the Exchange Act and all other applicable Laws. Except for the Restricted Shares outstanding as of the date of this Agreement, there are no outstanding contractual or other obligations of the Company or any of the Subsidiaries to (A) repurchase, redeem or otherwise acquire any shares of capital stock of, or other equity or voting interests in, the Company or any of the Subsidiaries or (B) vote or dispose of any shares of capital stock of, or other equity or voting interests in, the Company or any of the Subsidiaries. The Company is not a party to any voting agreements with respect to any shares of capital stock of, or other equity or voting interests in, the Company or any of the Subsidiaries and, to the knowledge of the Company, as of the date of this Agreement there are no irrevocable proxies and no voting agreements with respect to any shares of capital stock of, or other equity or voting interests in, the Company or any of the Subsidiaries. All Stock Options and Restricted Shares may be treated in accordance with Section 5.04(a).

(iv) Neither the Company nor any of the Subsidiaries has any (A) indebtedness for borrowed money, (B) indebtedness evidenced by any bond, debenture, note, mortgage, indenture or other debt instrument or debt security, (C) accounts payable to trade creditors and accrued expenses not arising in the ordinary course of business, (D) amounts owing as deferred purchase price for the purchase of any property (other than accounts payable, accrued expenses and amounts owing referred to in clauses (C) and (D) taken in the aggregate which do not exceed $350,000) or (E) guarantees with respect to any indebtedness or obligation of a type described in clauses (A) through (D) above of any other person (other than, in the case of clauses (A), (B) and (D), accounts payable to trade creditors and accrued expenses arising in the ordinary course of business) (collectively, "indebtedness", which term shall exclude any indebtedness of the Company or any wholly-owned Subsidiary to any wholly-owned Subsidiary or of any wholly-owned Subsidiary to the Company).

(d) Authority; Noncontravention. The Company has the requisite corporate power and authority to execute and deliver this Agreement, to consummate the Merger and the other transactions contemplated by this Agreement (subject to obtaining the Stockholder Approval) and to comply with the provisions of this Agreement. The execution and delivery of this Agreement by the Company, the consummation by the Company of the Merger and the other transactions contemplated by this Agreement and the compliance by the Company with the provisions of this Agreement have been duly authorized by all necessary corporate action on the part of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement, to comply with the terms of this Agreement or to consummate the Merger and the other transactions contemplated by this Agreement, subject, in the case of the Merger, to obtaining the Stockholder Approval. This Agreement has been duly executed and delivered by the Company and, assuming the due execution and delivery of this Agreement by Parent and Sub, constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to the enforcement of creditors' rights generally and by general principles of equity. The Board of Directors of the Company, at a meeting duly called and held at which all directors of the Company were present, duly and unanimously adopted resolutions (i) adopting this Agreement, (ii) declaring that it is in the best interests of the Company's stockholders that the Company enter into this Agreement and consummate the Merger on the terms and subject to the conditions set forth in this Agreement, (iii) declaring that the consideration to be paid to the Company's stockholders in the Merger is fair to such stockholders, (iv) directing that the approval of this Agreement be submitted to a vote at a meeting of the Company's stockholders to be held as set forth in Section 5.01(c) and (v) recommending that the Company's stockholders approve this Agreement. The execution and delivery of this Agreement by the Company, the consummation by the Company of the Merger and the other transactions contemplated by this Agreement and compliance by the Company with the provisions of this Agreement do not and will not conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancelation or acceleration of any obligation or to a loss of a benefit under, or result in the creation of any Lien in or upon any of the properties or assets of the Company or any of the Subsidiaries under, or give rise to any increased, additional, accelerated or guaranteed rights or entitlements under (including any right of a holder of a security of the Company or any of the Subsidiaries to require the Company or any of the Subsidiaries to acquire such security), any provision of (i) the Company Articles or the Company Bylaws or the certificate of incorporation or bylaws (or similar organizational documents) of any of the Subsidiaries, (ii) any loan or credit agreement, bond, debenture, note, mortgage, indenture, guarantee, lease, contract, agreement, license or instrument or any other legally binding commitment, arrangement, understanding, obligation or undertaking, whether oral or written (each, including all amendments thereto, a "Contract") or Permit to which the Company or any of the Subsidiaries is a party or bound by or any of their respective properties or assets are bound by or subject to or (iii) subject to the governmental filings and other matters referred to in the following sentence, any (A) Federal, state or local, domestic or foreign, statute, law, code, ordinance, rule or regulation (each, a "Law") or (B) Federal, state or local, domestic or foreign, judgment, injunction, order, writ or decree (each, a "Judgment"), in each case under clause (A) or (B), applicable to the Company or any of the Subsidiaries or their respective properties or assets, other than in the case of clause (i) solely with respect to the Subsidiaries and in the case of clauses (ii) and (iii), any such conflicts, violations, breaches, defaults, rights, results, losses, Liens, rights or entitlements that individually or in the aggregate are not reasonably likely to (x) have a Material Adverse Effect on the Company, (y) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (z) prevent, materially impede or materially delay the consummation of the Merger and the other transactions contemplated by this Agreement. No consent, approval, order or authorization of, registration, declaration or filing with, or notice to, any Federal, state or local, domestic or foreign, government or any court, administrative agency or commission or other governmental or regulatory authority or agency, domestic or foreign (a "Governmental Entity"), is required by or with respect to the Company or any of the Subsidiaries in connection with the execution and delivery of this Agreement by the Company, the consummation by the Company of the Merger or the other transactions contemplated by this Agreement or the compliance by the Company with the provisions of this Agreement, except for (A) the filing of a premerger notification and report form by the Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the termination or expiration of the waiting period thereunder, and the provision of such information as may be requested by the Department of Justice or the Federal Trade Commission in connection therewith, and the filings and receipt, termination or expiration, as applicable, of such other approvals or waiting periods required under any other applicable competition, merger control, antitrust or similar Law, (B) the filing with the Securities and Exchange Commission (the "SEC") of a proxy statement relating to the approval of this Agreement by the Company's stockholders (as amended or supplemented from time to time, the "Proxy Statement") and such reports under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), as may be required in connection with the execution and delivery of this Agreement by the Company, the consummation by the Company of the Merger and the other transactions contemplated by this Agreement or the compliance by the Company with the provisions of this Agreement, (C) the filing of the Articles of Merger with the Secretary of the Commonwealth of Massachusetts and appropriate documents with the relevant authorities of other states in which the Company or any of the Subsidiaries is qualified to do or does business, (D) any filings required under the rules and regulations of The Nasdaq Stock Market, Inc. and (E) such other consents, approvals, orders, authorizations, registrations, declarations, filings and notices, the failure of which to be obtained or made individually or in the aggregate are not reasonably likely to have a Material Adverse Effect on the Company or that individually or in the aggregate are not reasonably likely to (x) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (y) prevent, materially impede or materially delay the consummation of the Merger and the other transactions contemplated by this Agreement.

(e) SEC Documents. (i)The Company has made available to Parent, or the Electronic Data Gathering, Analysis and Retrieval (EDGAR) database of the SEC contains in a publicly available format, complete and accurate copies of all reports, schedules, forms, statements and other documents filed with or furnished to the SEC by the Company since October 1, 2003 (together with all information incorporated therein by reference, the "SEC Documents"). The Company has filed with or furnished to the SEC each report, schedule, form, statement or other document or filing required by Law to be filed or furnished by the Company. No Subsidiary is required to file or furnish any report, schedule, form, statement or other document or make any other filing with, or furnish any other material to, the SEC. As of their respective dates, each of the SEC Documents complied in all material respects with the requirements of the Exchange Act, the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, and the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder ("SOX"), in each case, to the extent applicable to such SEC Document at the time of filing or furnishing, and none of the SEC Documents at the time it was filed or furnished contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Except to the extent that information contained in any SEC Document filed or furnished and publicly available prior to the date of this Agreement (a "Filed SEC Document") has been revised or superseded by a later filed or furnished Filed SEC Document, none of the SEC Documents contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Each of the financial statements (including the related notes) of the Company included in the SEC Documents complied at the time it was filed as to form in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto in effect at the time of filing, was prepared in accordance with generally accepted accounting principles in effect from time to time in the United States of America ("GAAP") (except, in the case of unaudited statements, as permitted by the rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in accordance with GAAP in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and their consolidated results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal and recurring year-end audit adjustments). Except (x) as set forth or fully reserved against in the most recent financial statements included in the Filed SEC Documents (the "Baseline Financials"), or (y) as incurred since the date of the most recent balance sheet in the Baseline Financials in the ordinary course of business consistent with past practice, the Company and the Subsidiaries have no material liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise).

(ii) The Company is, and has been, in compliance in all material respects with the provisions of SOX applicable to it on or prior to the date hereof and has implemented such reasonable programs and has taken the reasonable steps necessary to ensure the Company's future compliance (not later than the relevant statutory and regulatory deadlines therefore) in all material respects with all provisions of SOX which shall become applicable to the Company after the date hereof.

(iii) Each of the principal executive officer of the Company and the principal financial officer of the Company has made all certifications required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of SOX as applicable with respect to the SEC Documents, and the statements contained in such certifications were true and accurate as of the date they were made. For purposes of this Agreement, "principal executive officer" and "principal financial officer" shall have the meanings given to such terms in SOX. Neither the Company nor any of the Subsidiaries has outstanding, or has arranged any outstanding, "extension of credit" to directors or executive officers of the Company within the meaning of Section 402 of SOX.

(iv) Neither the Company nor any of the Subsidiaries is a party to, or has any legally binding commitment to become a party to, any joint venture, off-balance sheet partnership or any similar Contract (including any Contract relating to any transaction or relationship between or among the Company and any of the Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand or any "off-balance sheet arrangements" (as defined in Item 303(a) of Regulation S-K of the SEC)), where the purpose or intended or known result or effect of such joint venture, partnership or Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company or any of the Subsidiaries in the Company's or such Subsidiary's published financial statements or other SEC Documents.

(v) The books, records and accounts of the Company, all of which have been made available to Parent upon Parent's request, are complete and correct in all material respects and represent actual, bona fide transactions and have been maintained in all material respects in accordance with customary and reasonable business practices and the requirements of the Exchange Act, the Securities Act, and to the extent in effect, SOX.

(vi) The Company's "internal control over financial reporting" (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) is sufficient in all material respects to provide reasonable assurance (A) regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, (B) that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, (C) that receipts and expenditures of the Company are made only in accordance with the authorizations of management and directors of the Company, and (D) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

(vii) The Company's "disclosure controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are reasonably designed to ensure that (A) information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and (B) all such information is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

(f) Information Supplied. None of the information included or incorporated by reference in the Proxy Statement will, at the date it is first mailed to the Company's stockholders, at the time of the Stockholders Meeting or at the time of any amendment or supplement thereof, as amended or supplemented at such date or time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation is made by the Company with respect to statements made or incorporated by reference therein based on information supplied or to be supplied by Parent or Sub specifically for inclusion or incorporation by reference in the Proxy Statement. The Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act.

(g) Absence of Certain Changes or Events. (i) Since September 30, 2005, (A) the Company and the Subsidiaries have conducted their respective businesses only in the ordinary course consistent with past practice, (B) there has not been (1) any Material Adverse Effect on the Company, (2) any material write-down by the Company or any of the Subsidiaries of any of the assets of the Company or any of the Subsidiaries, (3) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of the Company's or any of the Subsidiaries' capital stock or other equity or voting interests, except for dividends or distributions by a direct or indirect wholly-owned Subsidiary to its parent, (4) any split, combination or reclassification of any of the Company's or any of the Subsidiaries' capital stock or other equity or voting interests or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of, or other equity or voting interests in, the Company or any of the Subsidiaries, (5) any change in financial or tax accounting principles, methods or practices by the Company or any of the Subsidiaries, except insofar as may have been required by a change in GAAP or applicable Law, (6) any material Tax election or change in any material Tax election or any settlement or compromise of any material income Tax liability or (7) any licensing or other agreement with regard to the acquisition or disposition of any material Intellectual Property or rights thereto, other than nonexclusive licenses granted in the ordinary course of the business of the Company and the Subsidiaries and (C) each of the Company and the Subsidiaries has continued all pricing, sales, receivables and payables practices in accordance with the ordinary course of business consistent with past practice and has not engaged, except in the ordinary course of business consistent with past practice, in (1) any promotional sales or discount activity with any customers or distributors with the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) sales to the trade or otherwise that would otherwise be expected to occur in subsequent fiscal quarters, (2) any practice which would have the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected to be made in subsequent fiscal quarters, (3) any practice which would have the effect of postponing to subsequent fiscal quarters payments by the Company or any of the Subsidiaries that would otherwise be expected to be made in prior fiscal quarters (including the current fiscal quarter) or (4) any other promotional sales or discount activity.

(ii) Since March 31, 2006, there has not been (A)(1) any grant by the Company or any of the Subsidiaries to any current or former director, officer, employee, contractor or consultant of the Company or any of the Subsidiaries (collectively, "Company Personnel") of any bonus opportunity, any loan or any increase in any type of compensation or benefits, except for grants of normal bonus opportunities and normal increases of base compensation and benefits, in each case, prior to the date of this Agreement in the ordinary course of business consistent with past practice, or (2) any payment by the Company or any of the Subsidiaries to any Company Personnel of any bonus, except for bonuses paid or accrued in the ordinary course of business consistent with past practice, (B) any grant by the Company or any of the Subsidiaries to any Company Personnel of any severance, change in control, termination or similar compensation or benefits or increases therein or of the right to receive any severance, change in control, termination or similar compensation or benefits or increases therein, (C) any adoption of or entry by the Company or any of the Subsidiaries into, any amendment of or modification to or agreement to amend or modify (or announcement of an intention to amend or modify) or any termination, in each case, by the Company or any Subsidiary of, (1) any employment, deferred compensation, change in control, severance, termination, employee benefit, loan, indemnification, retention, stock repurchase, stock option, consulting or similar Contract between the Company or any of the Subsidiaries, on the one hand, and any Company Personnel, on the other hand, (2) any Contract between the Company or any of the Subsidiaries, on the one hand, and any Company Personnel, on the other hand, the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving the Company of the nature contemplated by this Agreement or (3) any trust or insurance Contract or other agreement to fund or otherwise secure payment of any compensation or benefit to be provided to any Company Personnel (all such Contracts under this clause (C), including any such Contract which is entered into on or after the date of this Agreement, collectively, "Benefit Agreements"), (D) any grant or amendment by the Company or any Subsidiary of any incentive award (including Stock Options, Restricted Shares, stock appreciation rights, performance units, stock repurchase rights or other stock-based or stock-related awards) or the removal or modification by the Company or any Subsidiary of any restrictions in any such award.

(h) Litigation. Section 3.01(h) of the Company Letter sets forth a complete and accurate list of all actions, suits or judicial, administrative or regulatory proceedings pending or, to the knowledge of the Company, threatened, or to the knowledge of the Company, any claims or investigations pending or threatened, by or against the Company or any of the Subsidiaries as of the date of this Agreement (i) which involves an amount in controversy in excess of $250,000 (or the equivalent amount in any other applicable currency based on the exchange rate published in the Financial Times (or such other authority agreed by Parent and the Company) on the business day five days prior to the date of this Agreement as the mid-point closing U.S. dollar exchange rate with respect to such currency for the most recent prior business day), (ii) which seeks material injunctive relief, (iii) which may give rise to any legal restraint on or prohibition against or limit the Surviving Corporation's ability to operate the business of the Company and the Subsidiaries substantially as it was operated immediately prior to the date of this Agreement or (iv) which if resolved in accordance with plaintiff's demands is reasonably likely to have a Material Adverse Effect on the Company. There is no Judgment of any Governmental Entity or arbitrator outstanding against, or, to the knowledge of the Company, investigation, proceeding, notice of violation, order of forfeiture or complaint by any Governmental Entity involving the Company or any of the Subsidiaries that individually or in the aggregate is reasonably likely to have a Material Adverse Effect on the Company. There are no actions, suits or judicial, administrative or regulatory proceedings pending or, to the knowledge of the Company, threatened, or to the knowledge of the Company, any claims or investigations pending or threatened, by or against the Company or any of the Subsidiaries which seek injunctive or similar relief against the Company or any of the Subsidiaries that would apply to Parent or any of its existing subsidiaries or any of their existing businesses following the Merger. There is no Judgment of any Governmental Entity or arbitrator outstanding against, or, to the knowledge of the Company, investigation, proceeding, notice of violation, order of forfeiture or complaint by any Governmental Entity involving the Company or any of the Subsidiaries that would apply to Parent or any of its existing subsidiaries or any of their existing businesses following the Merger.

(i) Contracts. (i) Section 3.01(i) of the Company Letter contains a complete and accurate list, as of the date hereof, of:

(A) each Contract pursuant to which the Company or any of the Subsidiaries has agreed not to compete with any person or in any area or to engage in any activity or business, or pursuant to which any benefit or right is required to be given or lost as a result of so competing or engaging;

(B) each Contract to which the Company or a Subsidiary is a party providing for exclusivity to any other person or any similar requirement, or pursuant to which the Company or any of the Subsidiaries is restricted in any way, or which after the Effective Time could restrict Parent or any of its subsidiaries in any way, with respect to the development, manufacture, marketing or distribution of their respective products or services or otherwise prohibits any activity in respect of the operation of their businesses, or pursuant to which any benefit or right is required to be given or lost as a result of non-compliance with any such exclusive or restrictive requirements or which requires the Company or any Subsidiary to refrain from granting license or franchise rights to any other person;

(C) each Contract between the Company or a Subsidiary (or by which the Company or a Subsidiary is bound), on the one hand, and, on the other hand, (1) any affiliate of the Company or any of the Subsidiaries, (2) any Company Personnel, (3) any union or other labor organization or (4) any affiliate of any director or executive officer of the Company (other than, in each case, (I) offer letters or employment agreements that are terminable at will by the Company or any of the Subsidiaries both without any penalty and without any obligation of the Company or any of the Subsidiaries to pay severance or other compensation or benefits (other than accrued base salary, accrued commissions, accrued bonuses, accrued vacation pay, accrued floating holidays and legally mandated benefits), (II) invention assignment and confidentiality agreements relating to the assignment of inventions to the Company or any of the Subsidiaries not involving the payment of money and (III) Benefit Plans and Benefit Agreements);

(D) each Contract under which the Company or any of the Subsidiaries has incurred any indebtedness having an aggregate principal amount in excess of $100,000;

(E) each material Contract to which the Company or a Subsidiary is a party that requires consent, approval or waiver of, or notice to, a Governmental Entity or other third party in the event of or with respect to the Merger or any of the other transactions contemplated by this Agreement, including in order to avoid termination of or loss of a material benefit under any such Contract;

(F) each Contract to which the Company or a Subsidiary is a party creating or granting a Lien (including Liens upon properties acquired under conditional sales, capital leases or other title retention or security devices), other than (1) Liens for Taxes not yet due and payable, that are payable without penalty or that are being contested in good faith and for which adequate reserves have been recorded, (2) Liens for assessments and other governmental charges or Liens of landlords, carriers, warehousemen, mechanics and repairmen incurred in the ordinary course of business, in each case for sums not yet due and payable or due but not delinquent or being contested in good faith by appropriate proceedings, (3) Liens incurred in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and similar obligations and (4) Liens incurred in the ordinary course of business that are not reasonably likely to adversely interfere in a material way with the use of assets encumbered thereby ("Permitted Liens");

(G) each material Contract containing any provisions (1) having the effect of providing that the consummation of the Merger or any of the other transactions contemplated by this Agreement or the execution, delivery or effectiveness of this Agreement will materially conflict with, result in a material violation or material breach of, or constitute a default (with or without notice or lapse of time or both) under, such Contract or give rise under such Contract to any right of, or result in, a termination, right of first refusal, material amendment, revocation, cancelation or material acceleration, or a loss of a material benefit or the creation of any material Lien upon any of the properties or assets of the Company, Parent or any of their respective subsidiaries, or to any increased, guaranteed, accelerated or additional material rights or material entitlements of any person or (2) having the effect of providing that the consummation of the Merger or any of the other transactions contemplated by this Agreement or the execution, delivery or effectiveness of this Agreement will require that a third party be provided with access to source code of the Company or any Subsidiary or that any source code of the Company or any Subsidiary be released from escrow and provided to any third party;

(H) each Contract to which the Company or a Subsidiary is a party providing for payments by the Company or a Subsidiary of royalties or other license fees to third parties in excess of $100,000 annually that is not terminable on 90 days or less notice;

(I) each Contract granting a third party any license to Intellectual Property that is not limited to the internal use of such third party, it being understood that internal use may include use by third party customers in the ordinary course of business consistent with past practice without any sublicense or similar rights;

(J) each Contract to which the Company or a Subsidiary is a party granting the other party to such Contract or a third party "most favored nation" pricing or terms that (1) applies to the Company or any of the Subsidiaries or (2) following the Merger would apply to Parent or any of its subsidiaries other than the Surviving Corporation;

(K) each Contract pursuant to which the Company or any of the Subsidiaries has agreed or is required to provide any third party with access to source code or to provide for source code of the Company or any Subsidiary to be put in escrow;

(L) each Contract to which the Company or a Subsidiary is a party for any joint venture (whether in partnership, limited liability company or other organizational form) (or any similar arrangement that provides for the sharing of profits and losses);

(M) each Contract to which the Company or a Subsidiary is a party with any Governmental Entity;

(N) each material Contract entered into in the last five years in connection with the settlement or other resolution of any suit, claim, action, investigation or proceeding;

(O) each Contract to which the Company or a Subsidiary is a party providing for future performance by the Company or a Subsidiary in consideration of amounts previously paid, other than maintenance and support Contracts entered into in the ordinary course of business consistent with past practice;

(P) each Contract to which the Company or a Subsidiary is a party providing for liquidated damages (other than in an aggregate amount for all Contracts containing liquidated damages provisions that is immaterial to the business of the Company and the Subsidiaries, taken as a whole) by the Company or any Subsidiary;

(Q) each material Contract under which the Company or a Subsidiary has agreed to provide professional services for a fixed fee and that guarantees a specific result;

(R) each Contract between the Company or any of the Subsidiaries and any of the 20 largest customers of the Company and the Subsidiaries (determined on the basis of aggregate software license revenues recognized by the Company and the Subsidiaries in the twelve months ended June 30, 2006) (each such customer, a "Major Customer" and each such Contract, a "Major Customer Contract");

(S) each Contract between the Company or any of the Subsidiaries, on the one hand, and any of the ten largest licensors or any of the ten largest non-licensor suppliers to the Company and the Subsidiaries, on the other hand (determined on the basis of aggregate amounts paid by the Company and the Subsidiaries in the twelve months ended June 30, 2006) (each such licensor or other supplier, a "Major Supplier" and each such Contract, a "Major Supplier Contract");

(T) each Contract which has aggregate sums due to or from the Company and the Subsidiaries, taken as a whole, during the twelve months ending June 30, 2007 in excess of $500,000; and

(U) each other material Contract to which the Company or a Subsidiary is a party not made in the ordinary course of business.

The Company has made available to Parent complete and accurate copies of the Contracts referred to above (the "Specified Contracts"). Each Specified Contract is in full force and effect (except for those Specified Contracts that have expired or terminated in accordance with their terms) and is a legal, valid and binding agreement of the Company or its Subsidiary, as the case may be and, to the knowledge of the Company, of each other party thereto, enforceable against the Company or such Subsidiary, as the case may be, and, to the knowledge of the Company, against the other party or parties thereto, in each case, in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to the enforcement of creditors' rights generally and by general principles of equity. Each of the Company and the Subsidiaries has performed or is performing all material obligations required to be performed by it under the Specified Contracts and is not (with or without notice or lapse of time or both) in breach in any material respect or default and has not knowingly waived or failed to enforce any material rights or benefits thereunder, other than in the ordinary course of business consistent with past practice, and, to the knowledge of the Company, as of the date of this Agreement no other party to any of the Specified Contracts is (with or without notice or lapse of time or both) in breach in any material respect or default thereunder and to the knowledge of the Company, as of the date of this Agreement there has occurred no event giving (with or without notice or lapse of time or both) to others any right of termination, material amendment or cancelation of any such Specified Contract.

(ii) As of the date of this Agreement, since October 1, 2005, none of the Major Customers or Major Suppliers has terminated, failed to renew or requested any material amendment to any of its Major Customer Contracts or Major Supplier Contracts (other than renewals and amendments in the ordinary course of business not adverse in any material respect to the Company or any Subsidiary), with the Company or any of the Subsidiaries.

(j) Compliance with Laws. The Company and the Subsidiaries have in effect all material Permits that are necessary for them to own, lease or operate their properties and assets and to carry on their businesses as presently conducted. The Company and the Subsidiaries have complied and are in compliance in all material respects with all applicable Laws and Judgments; provided, however, that no representation is made in this Section 3.01(j) with respect to any Laws or Judgments which are the subject of representations made in Sections 3.01(e), (l), (m) and (n). The execution and delivery of this Agreement by the Company does not, and the consummation by the Company of the Merger and the other transactions contemplated by this Agreement and compliance by the Company with the terms of this Agreement are not reasonably likely to, cause the revocation or cancelation of any material Permit. As of the date hereof, neither the Company nor any of the Subsidiaries has received any written communication during the past three years from any person that alleges that the Company or any of the Subsidiaries is not in compliance in all material respects with, or is subject to liability under, any material Permit, Law or Judgment or relating to the revocation or modification of any material Permit. As of the date hereof, neither the Company nor any of the Subsidiaries has received any written notice that any investigation or review by any Governmental Entity is pending with respect to the Company or any of the Subsidiaries or any of the assets or operations of the Company or any of the Subsidiaries or that any such investigation or review is contemplated, other than any audit, examination or review of any Tax Return in the ordinary course of business.

(k) Absence of Changes in Benefit Plans; Employment Agreements; Labor Relations. (i) Except as disclosed in the Filed SEC Documents, since September 30, 2005, none of the Company or any of the Subsidiaries has adopted, entered into, terminated, amended, modified or agreed to adopt, enter into, terminate, amend or modify (or announced an intention to adopt, enter into, terminate, amend or modify) in any material respect any collective bargaining agreement or any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock appreciation, restricted stock, stock repurchase rights, stock option (including the Company Stock Plans), phantom stock, stock-based compensation, performance, retirement, savings, paid time off, perquisite, vacation, severance, change in control, termination, retention, disability, death benefit, hospitalization, medical or other welfare benefit or other plan, program, arrangement or understanding (whether oral or written, formal or informal, funded or unfunded and whether or not legally binding or subject to the Laws of the United States), sponsored, maintained, contributed to or required to be maintained or contributed to by the Company, any of the Subsidiaries or any other person that, together with the Company, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or with respect to which the Company is otherwise jointly or severally liable under applicable Law (each, a "Commonly Controlled Entity"), in each case, providing compensation or benefits to any Company Personnel, but not including the Benefit Agreements (all such plans, programs, arrangements and understandings, including any such plan, program, arrangement or understanding entered into or adopted on or after the date of this Agreement, collectively, "Benefit Plans"), or has made any change in any actuarial or other assumption used to calculate funding obligations with respect to any Pension Plan, or any change in the manner in which contributions to any such Pension Plan are made or the basis on which such contributions are determined.

(ii) As of the date of this Agreement, there are no collective bargaining or other labor union agreements to which the Company or any of the Subsidiaries is a party or by which it is bound. Since October 1, 2003, neither the Company nor any of the Subsidiaries has encountered any labor union organizing activity, or had any actual or threatened employee strikes, work stoppages, slowdowns or lockouts. As of the date of this Agreement, none of the employees of the Company or any of the Subsidiaries is represented by any union with respect to his or her employment by the Company or such Subsidiary. Each of the Company and the Subsidiaries is, and since October 1, 2003, has been, in compliance in all material respects with all applicable Laws and Judgments relating to employment and employment practices, occupational safety and health standards, terms and conditions of employment and wages and hours, and is not, and since October 1, 2003, has not, engaged in any unfair labor practice. As of the date of this Agreement, the Company has not received notice of any unfair labor practice charge or complaint against the Company or any of the Subsidiaries that is pending and, to the knowledge of the Company, there is no unfair labor practice charge or complaint against the Company or any of the Subsidiaries threatened, in each case before the National Labor Relations Board or any comparable Governmental Entity.

(l) Environmental Matters. (i)(A) Each of the Company and the Subsidiaries is and has been, in compliance in all material respects with all applicable Environmental Laws, and neither the Company nor any of the Subsidiaries has received any written communication alleging that the Company or such Subsidiary is in violation of, or may have liability under, any Environmental Law; (B) each of the Company and the Subsidiaries possesses all material Permits required under Environmental Laws for the conduct of its operations and is in compliance in all material respects with such Permits, and neither the Company nor any of the Subsidiaries has been advised in writing by any Governmental Entity of any actual or potential change in any material respect in the status or terms and conditions of any such Permit; (C) there are no material Environmental Claims pending or, to the knowledge of the Company, threatened against the Company or any of the Subsidiaries; (D) there has been no Release of any Hazardous Material that could reasonably be expected to form the basis of any material Environmental Claim against the Company or any of the Subsidiaries or against any person whose liabilities for such Environmental Claims the Company or any of the Subsidiaries has, or may have, retained or assumed, either contractually or by operation of Law; (E) neither the Company nor any of the Subsidiaries has retained or assumed, either contractually or by operation of Law, any liabilities or obligations that are reasonably likely to form the basis of any material Environmental Claim against the Company or any of the Subsidiaries; (F) there are no aboveground or underground storage tanks or known or suspected asbestos-containing materials for which the Company or any of the Subsidiaries could reasonably be expected to be responsible at, on, under or about property owned, operated or leased by the Company or any of the Subsidiaries, nor, to the knowledge of the Company, were there any underground storage tanks on, under or about any such property in the past; (G) neither the Company nor any of the Subsidiaries stores, generates or disposes of Hazardous Materials (excluding office, cleaning or similar supplies used in the ordinary course of the Company's or the Subsidiaries' operations) at, on, under, about or from property owned or leased by the Company or any of the Subsidiaries; and (H) there are no past or present events, conditions, circumstances, activities, practices, incidents, actions or plans that could reasonably be expected to form the basis of any material Environmental Claim against the Company or any of the Subsidiaries.

(ii) For all purposes of this Agreement, (A) "Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, Judgments, demands, directives, claims, Liens, investigations, proceedings or written or oral notices of noncompliance or violation by or from any person alleging liability of any kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resource damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from (1) the presence or Release of, or exposure to, any Hazardous Material at any location, or (2) the failure to comply with any Environmental Law; (B) "Environmental Law" means any Law, Judgment, legally binding agreements or Permit issued, promulgated or entered into by or with any Governmental Entity relating to pollution, the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), natural resources or human health and safety; (C) "Hazardous Materials" means any petroleum or petroleum products, radioactive materials or wastes, asbestos in any form, polychlorinated biphenyls and any other chemical, material, substance or waste that is prohibited, limited or regulated under any Environmental Law; and (D) "Release" means any actual or threatened release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within any building, structure, facility or fixture.

(m) ERISA Compliance. (i) Section 3.01(m)(i) of the Company Letter sets forth a complete and accurate list of all "employee pension benefit plans" (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) (each, a "Pension Plan") and all other Benefit Plans and Benefit Agreements that, in each case, are in effect as of the date of this Agreement. The Company has made available to Parent complete and accurate copies of (A) each Benefit Plan and each Benefit Agreement (or, in the case of any unwritten Benefit Plans or Benefit Agreements, descriptions thereof), (B) the two most recent annual reports, or such similar reports, statements, information returns or material correspondence required to be filed, with or delivered to any Governmental Entity, if any, with respect to each Benefit Plan (including reports filed on Form 5500), (C) the most recent summary plan description (if any), and any summary of material modifications prepared for each Benefit Plan for which such summary plan description is required under applicable Law and (D) each trust agreement and group annuity or insurance Contract and other documents relating to the funding or payment of compensation or benefits under any Benefit Plan or Benefit Agreement. Each Benefit Plan has been administered in all material respects in accordance with its terms. The Company and the Subsidiaries and all the Benefit Plans are in compliance in all material respects with applicable Law, including ERISA and the Code.

(ii) All Pension Plans intended to be tax qualified under the Code are so qualified and have been the subject of favorable determination letters from the Internal Revenue Service (the "IRS") with respect to all Tax Law changes with respect to which the IRS is currently willing to provide a determination letter to the effect that such Pension Plans are qualified and exempt from United States Federal income Taxes under Sections 401(a) and 501(a), respectively, of the Code, and no such determination letter has been revoked (nor, to the knowledge of the Company as of the date of this Agreement, has revocation been threatened) and no event has occurred since the date of the most recent determination letter or application therefor relating to any such Pension Plan that is reasonably likely to adversely affect the qualification of such Pension Plan or increase the costs relating thereto or require security under Section 307 of ERISA. All Pension Plans required to have been approved by any non-United States Governmental Entity (or permitted to have been approved to obtain any beneficial tax or other status) have been so approved or timely submitted for approval, no such approval has been revoked (nor, to the knowledge of the Company as of the date of this Agreement, has revocation been threatened) and no event has occurred since the date of the most recent approval or application therefor relating to any such Pension Plan that is reasonably likely to affect any such approval relating thereto or increase the costs relating thereto. The Company has made available to Parent a copy of the most recent determination or approval letter received with respect to each Pension Plan, as well as a copy of each pending application for a determination or approval letter, if any.

(iii) Neither the Company nor any Commonly Controlled Entity has sponsored, maintained, contributed to or been obligated to maintain or contribute to, or has any actual or contingent liability under, any Benefit Plan that is subject to Section 302 or Title IV of ERISA or Section 412 of the Code or is otherwise a defined benefit pension plan or that provides for the payment of termination indemnities.

(iv) No Benefit Plan or Benefit Agreement that provides welfare benefits (each, a "Welfare Plan") is funded through a "welfare benefits fund" (as such term is defined in Section 419(e) of the Code), or is unfunded or self-insured. There are no understandings, agreements or undertakings, written or oral, that would prevent any Welfare Plan (including any Welfare Plan covering retirees or other former employees) from being amended or terminated without material liability to the Company or any of the Subsidiaries on or at any time after the Effective Time. No Welfare Plan provides benefits after termination of employment, except where the cost thereof is borne entirely by the former employee (or his or her eligible dependents or beneficiaries) or as required by Section 4980B(f) of the Code.

(v) Section 3.01(m)(v) of the Company Letter sets forth a complete and accurate list, as of the date of this Agreement, of (A) each Benefit Plan and each Benefit Agreement pursuant to which any Company Personnel could become entitled to any additional compensation, severance or other benefits or any acceleration of the time of payment or vesting of any compensation, severance or other benefits as a result of the Merger and the other transactions contemplated by this Agreement (alone or in combination with any other event) or termination of employment, or any benefits the value of which would be calculated on the basis of the Merger and the other transactions contemplated by this Agreement (alone or in combination with any other event), (B) the names of all Company Personnel entitled to any such compensation or benefits actually payable as of the Closing Date or upon termination of employment after the Closing Date and the category or type of each such form of compensation or benefit to which such Company Personnel is entitled, (C) the aggregate value of each such form of compensation or benefit actually payable as of the Closing Date and each such form of compensation or benefit that would be payable upon termination of employment or otherwise after the Closing Date, in each case, to all Company Personnel, and (D) the aggregate value of any such compensation or benefits that would be paid to each individual set forth in Section 3.01(m)(v) of the Company Letter as of the Closing Date and upon termination of employment. Except as expressly set forth in the Offer Letters or in Section 5.04, no Company Personnel will be entitled to any severance, change in control, termination, bonus or other additional compensation or benefits from or on behalf of the Company or any of its Subsidiaries or any acceleration of the time of payment or vesting of any compensation or benefits from or on behalf of the Company or any of its Subsidiaries as a result of the Merger and the other transactions contemplated by this Agreement (alone or in combination with any other event) or any compensation or benefits from or on behalf of the Company or any of its Subsidiaries related to or contingent upon, or the value of which will be calculated on the basis of, the Merger and the other transactions contemplated by this Agreement (alone or in combination with any other event). The execution and delivery of this Agreement, the consummation of the Merger and the other transactions contemplated by this Agreement (alone or in combination with any other event) and compliance by the Company with the provisions of this Agreement do not and will not (A) trigger any funding (through a grantor trust or otherwise) of, or increase the cost of, or give rise to any other obligation under, any Benefit Plan, Benefit Agreement or any other employment arrangement, (B) trigger the forgiveness of indebtedness owed by any Company Personnel to the Company or any of its affiliates or (C) result in any violation or breach of, or a default (with or without notice or lapse of time or both) under, or limit to the Company's ability to amend, modify or terminate any Benefit Plan or Benefit Agreement.

(vi) No deduction of any amount payable pursuant to the terms of the Benefit Plans, Benefit Agreements or any other employment arrangements has been disallowed or is subject to disallowance under Section 162(m) of the Code.

(vii) As of the date of this Agreement, neither the Company nor any of the Subsidiaries has received written notice of, and, to the knowledge of the Company, there are no, pending investigations by any Governmental Entity with respect to, or pending termination proceedings or other material claims (except claims for benefits payable in the normal operation of the Benefit Plans), suits or proceedings against or involving any Benefit Plan or Benefit Agreement or asserting any rights or claims to benefits under, any Benefit Plan or Benefit Agreement.

(viii) All contributions, premiums and benefit payments under or in connection with the Benefit Plans or Benefit Agreements that are required to have been made by the Company or any of the Subsidiaries have been timely made. Neither the Company nor any of the Subsidiaries has incurred, or could reasonably be expected to incur, any unfunded liabilities in relation to any Benefit Plan or Benefit Agreement.

(ix) With respect to each Benefit Plan, (A) there has not occurred any prohibited transaction in which the Company, any of the Subsidiaries or any of their respective officers, directors or employees or, to the knowledge of the Company as of the date of this Agreement, any trustee or other fiduciary or administrator of any Benefit Plan or trust created thereunder, in each case, who is not an officer, director or employee of the Company or any of the Subsidiaries (a "Non-Affiliate Plan Fiduciary"), has engaged that is reasonably likely to subject the Company, any of the Subsidiaries or any of their respective officers, directors or employees or any Non-Affiliate Plan Fiduciary, to the tax or penalty on prohibited transactions imposed by Section 4975 of the Code or the sanctions imposed under Title I of ERISA or any other applicable Law and (B) none of the Company, any of the Subsidiaries or any of their respective officers, directors or employees, or, to the knowledge of the Company, as of the date of this Agreement, any Non-Affiliate Plan Fiduciary, nor any agent of any of the foregoing, has engaged in any transaction or acted in a manner, or failed to act in a manner, that is reasonably likely to subject the Company, any Subsidiary of the Company or, to the knowledge of the Company, as of the date of this Agreement, any Non-Affiliate Plan Fiduciary to any liability for breach of fiduciary duty under ERISA or any other applicable Law.

(x) The Company and the Subsidiaries do not have any liability or obligations (other than immaterial liabilities or obligations), including under or on account of a Benefit Plan or Benefit Agreement, arising out of the hiring of persons to provide services to the Company or any of the Subsidiaries and treating such persons as consultants or independent contractors and not as employees of the Company or any of the Subsidiaries.

(n) Taxes. (i) Each of the Company and the Subsidiaries has timely filed all material Tax Returns required to be filed by it and all such Tax Returns are complete and accurate in all material respects. Each of the Company and the Subsidiaries has timely paid all material Taxes due and owing, and the most recent financial statements contained in the Filed SEC Documents reflect an adequate reserve, in accordance with GAAP, for all material Taxes payable by the Company and the Subsidiaries for all taxable periods and portions thereof through the date of such financial statements.

(ii) As of the date of this Agreement, no material Tax Return of the Company or any of the Subsidiaries is currently under audit or examination by any Taxing Authority, and no written notice of such an audit or examination has been received by the Company or any of the Subsidiaries. There is no material deficiency, refund litigation, proposed adjustment or matter in controversy with respect to any Taxes due and owing by the Company or any of the Subsidiaries. Each deficiency resulting from any completed audit or examination or concluded litigation relating to Taxes by any Taxing Authority has been timely paid. As of the date of this Agreement, no issues relating to Taxes were raised by the relevant Taxing Authority during any presently pending audit or examination, and no issues relating to Taxes were raised by the relevant Taxing Authority in any completed audit or examination, that are reasonably likely to recur in a later taxable period, except for issues that individually or in the aggregate are not reasonably likely to result in a material liability for the Company or any of the Subsidiaries. The relevant statute of limitations is closed with respect to the U.S. federal income Tax Returns of the Company and the Subsidiaries for all tax years ending on or before December 31, 1998.

(iii) There is no currently effective agreement or other document extending, or having the effect of extending, the period of assessment or collection of any material Taxes and no currently effective power of attorney (other than powers of attorney authorizing employees of the Company to act on behalf of the Company) with respect to any material Taxes has been executed or filed with any Taxing Authority.

(iv) No material Liens for Taxes exist with respect to any assets or properties of the Company or any of the Subsidiaries, except for statutory Liens for Taxes not yet due and Liens for Taxes that the Company or any of the Subsidiaries is contesting in good faith through appropriate proceedings and for which adequate reserves, in accordance with GAAP, have been established.

(v) None of the Company or any of the Subsidiaries is a party to or bound by any Tax sharing agreement, Tax indemnity obligation or similar agreement, arrangement or practice with respect to Taxes (including any advance pricing agreement, closing agreement pursuant to Section 7121 of the Code, or other agreement relating to Taxes with any Taxing Authority).

(vi) None of the Company or any of the Subsidiaries will be required to include in a taxable period ending after the Effective Time a material amount of taxable income attributable to income that accrued (for purposes of the financial statements of the Company included in the Filed SEC Documents) in a prior taxable period but was not recognized for Tax purposes in any prior taxable period as a result of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, the cash method of accounting or Section 481 of the Code or comparable provisions of any Tax Law, or for any other reason (including as a result of prepaid amounts or deferred revenue received on or prior to the Effective Time).

(vii) Other than agreements pursuant to which the Company or a Subsidiary may be required to make payments to persons set forth on Section 3.01(n)(vii) of the Company Letter (the "Primary Company Executives"), neither the Company nor any Subsidiary is a party to any Contract that could result in the payment of any amount or other entitlement (whether in cash or property or the vesting of property) as a result of the Merger (alone or in combination with any other event) to any person who is a "disqualified individual" (as defined in Treasury Regulation Section 1.280G-1) with respect to the Company, which payment would be characterized as an "excess parachute payment" (as defined in Section 280G(b)(1) of the Code). The Company has provided Parent with documentation evidencing the "base amount" (as defined in Section 280G(b)(3) of the Code) for each Primary Company Executive as of the date of this Agreement. No current or former director, officer, employee, contractor or consultant of the Company or any of the Subsidiaries is entitled to any gross-up, make-whole or other additional payment from the Company or any of the Subsidiaries in respect of any tax (including Federal, state, local and foreign income, excise and other taxes (including taxes imposed under Sections 280G or 409A of the Code)) or interest or penalty related thereto.

(viii) The Company and the Subsidiaries have complied in all material respects with all applicable Laws relating to the payment and withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 3121 and 3402 of the Code or similar provisions under any Laws) and have, within the time and the manner prescribed by Law, withheld from and paid over to the proper Taxing Authorities all amounts required to be so withheld and paid over under applicable Laws.

(ix) Neither the Company nor any of the Subsidiaries has ever participated in a reportable transaction within the meaning of Treasury Regulations Section 1.6011-4(b).

(x) Neither the Company nor any of the Subsidiaries has constituted either a "distributing corporation" or a "controlled corporation" (A) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the two years prior to the date of this Agreement or (B) in a distribution that could otherwise constitute part of a "plan" or "series of related transactions" (within the meaning of Section 355(e) of the Code) in conjunction with the Merger or any of the other transactions contemplated by this Agreement.

(xi) To the best of the Company's knowledge, (A) all material related party transactions involving the Company or any of the Subsidiaries are at arm's length in compliance with Section 482 of the Code and the Treasury Regulations promulgated thereunder and any comparable provision of any Tax Law, (B) none of the Company or any of the Subsidiaries is a party to any material cost-sharing agreement or similar arrangement that is not a "qualified cost sharing arrangement" within the meaning of U.S. Treasury Regulation Section 1.482-7 and any comparable provision of any Tax Law and (C) all material intercompany payments have been calculated in accordance with U.S. Treasury Regulation Section 1.482-7. Each of the Company and the Subsidiaries has maintained in all material respects all necessary documentation in connection with material related party transactions in accordance with Sections 482 and 6662 of the Code and the Treasury Regulations promulgated thereunder and any comparable provision of any Tax Law. The Company has made available to Buyer complete and correct copies of all transfer pricing studies relating to the Company or any of the Subsidiaries for all taxable years since 1999.

(xii) Neither the Company nor any of the Subsidiaries has been subject to an "accumulated earnings tax" pursuant to Section 531 of the Code or any comparable provision of any Tax Law.

(xiii) Neither the Company nor any of the Subsidiaries (A) is, to the knowledge of the Company, a "passive foreign investment company" within the meaning of Section 1297(a) of the Code and the Treasury Regulations promulgated thereunder or (B) has ever made an election under Section 1362 of the Code to be treated as an S corporation for Federal income Tax purposes or made a similar election under any comparable provision of any Tax Law.

(xiv) Each of the Company and the Subsidiaries has conducted all aspects of its business materially in accordance with the terms and conditions of all Tax rulings and Tax concessions that were provided specifically to it by any relevant Taxing Authority.

(xv) Each of the Company and the Subsidiaries has disclosed in its Federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of Federal income Tax within the meaning of Section 6662 of the Code.

(xvi) For purposes of this Agreement, "Taxes" shall include all (A) Federal, state and local, domestic and foreign, income, franchise, property, sales, excise, employment, payroll, social security, value-added, ad valorem, transfer, withholding and other taxes, including taxes based on or measured by gross receipts, profits, sales, use or occupation, tariffs, levies, impositions, assessments or governmental charges of any nature whatsoever, including any interest penalties or additions with respect thereto, and any obligations under any Permits or any Contracts with any other person with respect to such amounts, (B) liability for the payment of any amounts of the types described in clause (A) as a result of being a member of an affiliated, consolidated, combined, unitary or aggregate group and (C) liability for the payment of any amounts as a result of an obligation to indemnify any other person with respect to the payment of any amounts of the type described in clause (A) or (B). For purposes of this Agreement, "Taxing Authority" shall mean any Governmental Entity exercising regulatory authority in respect of any Taxes. For purposes of this Agreement, "Tax Return" shall mean any Federal, State and local, domestic and foreign return, declaration, report, form, claim for refund, disclosure statement (including any statement pursuant to Treasury Regulation Section 1.6011-4(a)), or information, return statement or other document relating to Taxes, including any certificate, schedule or attachment hereto, and including any amendment thereof.

(o) Properties. (i) Each of the Company and the Subsidiaries has good and marketable title to, or in the case of leased property and leased tangible assets have valid and enforceable leasehold interests in, all of its material properties and tangible assets, except for such properties and tangible assets as are no longer used or useful in the conduct of its businesses or as have been disposed of in the ordinary course of business and except for Permitted Liens and for defects in title, easements and restrictive covenants that individually or in the aggregate have not materially interfered with, and could not reasonably be expected to materially interfere with, the ability of the Company and the Subsidiaries to use such property and assets in the business of the Company and the Subsidiaries as presently conducted and as proposed by the Company and the Subsidiaries to be conducted. All such material properties and tangible assets, other than properties and tangible assets in which the Company or any of the Subsidiaries has a leasehold interest, are free and clear of all Liens, except for Permitted Liens. For purposes of this Section 3.01(o), the term "property" shall not include any Intellectual Property.

(ii) The material properties and tangible assets owned or leased by the Company and the Subsidiaries, or which they otherwise have the right to use, are sufficient (subject to normal wear and tear) to operate their businesses in substantially the same manner as they are presently conducted and as proposed by the Company and the Subsidiaries to be conducted.

(iii) Section 3.01(o)(iii) of the Company Letter sets forth a complete and accurate list as of the date of this Agreement of all real property and interests in real property leased by the Company or any of the Subsidiaries (each such property, a "Leased Real Property"). Neither the Company nor any of the Subsidiaries owns in fee any real property or interests in real property.

(iv) With respect to each Leased Real Property, as of the date of this Agreement (A) neither the Company nor any Subsidiary has subleased, licensed or otherwise granted anyone the right to use or occupy such Leased Real Property or any portion thereof and (B) neither the Company nor any Subsidiary has collaterally assigned or granted any other security interest in any such leasehold estate or any interest therein.

(v) Each of the Company and the Subsidiaries is in compliance in all material respects with the terms of all material leases to Leased Real Property to which it is a party and under which it is in occupancy, and each such material lease is a legal, valid and binding agreement of the Company or a Subsidiary, as the case may be and, to the knowledge of the Company, of each other party thereto, enforceable against the Company or such Subsidiary, as the case may be, and, to the knowledge of the Company, against the other party or parties thereto, in each case, in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to the enforcement of creditors' rights generally and by general principles of equity. Each of the Company and the Subsidiaries enjoys peaceful and undisturbed possession in all material respects under all the leases to Leased Real Property to which it is a party and under which it is in occupancy.

(p) Intellectual Property. (i) Section 3.01(p)(i) of the Company Letter sets forth a complete and accurate list of all patents, registered trademarks, tradenames, service marks, registered copyrights and pending applications for any of the foregoing owned by the Company or any of the Subsidiaries as of the date of this Agreement. The Company has made available to Parent complete and accurate copies of, and Section 3.01(p)(i) of the Company Letter sets forth a complete and accurate list of, all material Contracts under which the Company or any of the Subsidiaries is either a licensee or licensor of any Intellectual Property and which are in effect as of the date of this Agreement, other than (except with respect to licenses or rights referred to in item (ii)(K) below) nonexclusive licenses granted to or by the Company or a Subsidiary in the ordinary course of business of the Company and the Subsidiaries consistent with past practice.

(ii) (A) The Company and each of the Subsidiaries owns, or is licensed or otherwise has the right to use, free and clear of any Liens, and subject to the terms and conditions of any license therefor (which terms and conditions do not restrict the Company or the Subsidiaries from conducting their business as presently conducted), all Intellectual Property necessary for or material to the conduct of its business as presently conducted.

(B) All material issued patents, pending patent applications, registered trademarks and pending applications therefor, registered tradenames, registered service marks, registered copyrights and pending applications therefor of the Company or any of the Subsidiaries have been duly registered and/or filed, as applicable, with or issued by each applicable Governmental Entity in each jurisdiction selected by the Company for issuance or registration, all necessary affidavits of continuing use with respect thereto have been filed, and all necessary maintenance fees with respect thereto have been paid, except to the extent that the Company has made a business judgment prior to the date of this Agreement not to continue to register or maintain (or prosecute applications for) patents, registered copyrights, registered trademarks or registered service marks which are not currently used by the Company or any of the Subsidiaries.

(C) To the knowledge of the Company, none of the Company or any of the Subsidiaries or any of its or their products or services has infringed upon or otherwise violated, or is infringing upon or otherwise violating the Intellectual Property rights of any third party (excluding any infringement that is not reasonably likely to have a material adverse effect on a material product or service of the Company or any Subsidiary or to result in a material liability to the Company or any Subsidiary).

(D) There is no suit, action, or proceeding pending or, to the knowledge of the Company, threatened, or, to the knowledge of the Company, any claim or investigation pending or threatened, with respect to, and the Company has not been notified in writing of, any possible infringement or other violation in any material respect by the Company or any of the Subsidiaries or any of its or their products or services of the Intellectual Property rights of any third party.

(E) To the knowledge of the Company, no person or any product or service of any person is infringing upon or otherwise violating in any material respect any Intellectual Property rights of the Company or any of the Subsidiaries.

(F) The Company and the Subsidiaries have taken commercially reasonable steps to maintain in confidence the material trade secrets and confidential information of the Company and the Subsidiaries in all material respects consistent with procedures customarily used in the Company's industry to protect rights of like importance. Each of the former or current members of management or key personnel of the Company or any of the Subsidiaries, including all former and current employees, agents, consultants and independent contractors known to the Company to have contributed to or participated in the conception and development of Intellectual Property owned or intended to be owned by the Company or any of the Subsidiaries, have assigned or otherwise transferred to the Company, as necessary for the Company and the Subsidiaries to conduct their respective businesses as currently conducted, all ownership and other rights of any nature whatsoever (to the extent permitted by Law) of such person in any material Intellectual Property that is owned or intended to be owned by the Company or any of the Subsidiaries, except where the failure to do so is not reasonably likely to have a material adverse effect on a material product or service of the Company or any Subsidiary or to result in a material liability to the Company or any Subsidiary, and none of the former or current members of management or key personnel of the Company or any of the Subsidiaries, including all former and current employees, agents, consultants and independent contractors known to the Company to have contributed to or participated in the conception and development of Intellectual Property owned or intended to be owned by the Company or any of the Subsidiaries, has a valid claim against the Company or any of the Subsidiaries in connection with the involvement of such person in the conception and development of any material Intellectual Property that is owned or intended to be owned by the Company or any of the Subsidiaries, and no such claim is pending or, to the knowledge of the Company, threatened, in each case other than claims that are not reasonably likely to have a material adverse effect on a material product or service of the Company or any Subsidiary or to result in a material liability to the Company or any Subsidiary. To the knowledge of the Company, none of the current employees of the Company or any of the Subsidiaries has any patents issued or applications pending for any device, process, design or invention of any kind now used or needed by the Company or any of the Subsidiaries in furtherance of their business as presently conducted, which patents or applications have not been assigned (or are not contractually obligated to be assigned) to the Company or any of the Subsidiaries.

(G) The execution and delivery of this Agreement by the Company do not, and the consummation by the Company of the transactions contemplated by this Agreement and the compliance by the Company with the provisions of this Agreement will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time or both) under, or give rise to any right or license relating to, any material Intellectual Property owned or used by the Company or any of the Subsidiaries or with respect to which the Company or any of the Subsidiaries now has any agreement with any third party, or any right of termination, cancellation or acceleration of any material Intellectual Property right or obligation set forth in any agreement to which the Company or any of the Subsidiaries is a party, or the loss or encumbrance of any material Intellectual Property or material benefit related thereto, or result in the creation of any Lien in or upon any material Intellectual Property or right, except for such conflicts, violations, defaults, rights, licenses, losses, encumbrances or Liens as are not reasonably likely to have a material adverse effect on a material product or service of the Company or any Subsidiary or to result in a material liability to the Company or any Subsidiary.

(H) To the extent Third Party Software is (I) currently distributed to customers of the Company or any of the Subsidiaries by the Company or any of the Subsidiaries or (II) made available by the Company or any of the Subsidiaries to customers of the Company or any of the Subsidiaries under a hosting, outsourcing or similar arrangement, (1) the Company and the Subsidiaries have obtained all licenses necessary for such distribution or making available, except where the failure to obtain any such license is not reasonably likely to have a material adverse effect on a material product or service of the Company or any Subsidiary or to result in a material liability to the Company or any Subsidiary, (2) the Company's use of such Third Party Software has not obligated the Company to make any source code of the Company available to any third party and (3) no royalties or payments in excess of $100,000 are due. Section 3.01(p)(ii)(H) of the Company Letter contains a complete list of such material Third Party Software, and identifies the Contract pursuant to which the Company is licensed to distribute or make available such Third Party Software.

(I) None of the source code or other material trade secrets (other than trade secrets with respect to which the Company knowingly made a business judgment prior to the date of this Agreement to not keep such trade secrets confidential) of the Company or any of the Subsidiaries has been published or disclosed by the Company or any of the Subsidiaries to any third party, except pursuant to a written non-disclosure Contract or covenant, or, to the knowledge of the Company, by any third party to any other third party, except pursuant to licenses or other Contracts or covenants requiring such third party to keep such trade secrets confidential, in each case subject to customary and commercially reasonable exceptions.

(J) Neither the Company nor any of the Subsidiaries has assigned, sold or otherwise transferred ownership of any material issued patent, patent application, registered trademark or application therefor, service mark, registered copyright or application therefor or any other material Intellectual Property since October 1, 2003, other than assignments, sales or transfers between or among the Company and its wholly-owned Subsidiaries.

(K) No licenses or rights have been granted to a third party to distribute the source code for, or to use any source code to create Derivative Works of, any product currently marketed by, commercially available from or under development by the Company or any of the Subsidiaries for which the Company possesses the source code.

(L) Each of the Company and the Subsidiaries has created and has safely stored in a commercially reasonable manner back-up copies of all the material Software of the Company and each of the Subsidiaries.

(iii) For purposes of this Agreement, "Derivative Work" shall have the meaning set forth in 17 U.S.C. Section 101.

(iv) For purposes of this Agreement, "Intellectual Property" shall mean Software, trademarks, service marks, brand names, certification marks, trade dress, assumed names, domain names, trade names and other indications of business origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application; inventions, discoveries and ideas, whether patentable or not in any jurisdiction; patents, applications for patents (including divisions, provisionals, continuations, continuations in-part and renewal applications), and any renewals, extensions or reissues thereof, in any jurisdiction; non-public information, trade secrets, know-how, formulae, processes, procedures, research records, records of invention, software and confidential information, whether patentable or not in any jurisdiction and rights in any jurisdiction to limit the use or disclosure thereof by any person; writings and other works, whether copyrightable or not in any jurisdiction, and any renewals or extensions thereof; any similar intellectual property or proprietary rights; and any claims or causes of action of the owner of such intellectual property or proprietary rights (whether pending or threatened or which could be filed) arising out of any infringement or misappropriation of any of the foregoing. For purposes of this Agreement, "Software" shall mean all types of computer software programs, including operating systems, application programs, software tools, firmware and software imbedded in equipment, including both object code and source code. The term "Software" shall also include all written or electronic data, documentation, and materials that explain the structure or use of Software or that were used in the development of Software or are used in the operation of the Software including logic diagrams, flow charts, procedural diagrams, error reports, manuals and training materials, look-up tables and databases. For purposes of this Agreement, "Third Party Software" shall mean Software with respect to which a third party holds any copyright or other ownership right (and therefore, such Software is not owned exclusively by the Company or any of the Subsidiaries).

(q) Receivables. As of the date of this Agreement, all the Receivables (i) represent actual indebtedness or other obligations incurred by the applicable account debtors and (ii) have arisen from bona fide transactions. The Baseline Financials reflect appropriate reserves for doubtful accounts, in accordance with GAAP, as of the most recent date specified therein. For purposes of this Agreement, "Receivables" shall mean all receivables constituting the right of the Company or any of the Subsidiaries to receive payments in respect of goods or services.

(r) Insurance. The Company or the Subsidiaries maintain policies of fire and casualty, liability and other forms of insurance in such amounts, with such deductibles and against such risks and losses as are customary for businesses in the Company's and the Subsidiaries' business. All such insurance policies are in full force and effect, all premiums due and payable thereon have been paid, and no written notice of cancelation or termination has been received with respect to any such policy which has not been replaced on substantially similar terms prior to the date of such cancelation. There is no material claim pending under any such policies as to which coverage has been disputed.

(s) State Takeover Statutes; Company Articles. The Board of Directors of the Company has taken all actions necessary, if any, so that the restrictions contained in (i) Chapters 110C, 110D and 110F of the Massachusetts General Laws and (ii) Article 6A of the Company Articles ("Article 6A"), in each case to the extent, if any, such restrictions would otherwise be applicable to the execution, delivery or performance of this Agreement, the consummation of the Merger or the other transactions contemplated by this Agreement or compliance with the terms of this Agreement, shall not so apply. A majority of the Board of Directors of the Company and a majority of the "Disinterested Directors" (as defined in Article 6A) have determined (assuming the accuracy of the representations and warranties of Parent and Sub in Section 3.02(e) below) that none of Parent, Sub or any of their respective affiliates is an "Interested Stockholder" (as defined in Article 6A) such that subsection (a)(1) of such Article 6A would apply to the execution, delivery or performance of this Agreement, the consummation of the Merger or any other transaction contemplated by this Agreement or compliance with the terms hereof. No other "control share acquisition", "interested stockholder", "fair price", "moratorium" or other state takeover or similar statute or regulation or other similar provision of the Company Articles or the Company Bylaws is, or at the Effective Time will be, applicable to the execution, delivery or performance of this Agreement, the consummation of the Merger or the other transactions contemplated by this Agreement or compliance with the terms of this Agreement.

(t) Company Rights Agreement. The Company has taken all actions necessary to (i) render the Company Rights Agreement inapplicable to the execution, delivery or performance of this Agreement, the consummation of the Merger and the other transactions contemplated by this Agreement and compliance with the terms of this Agreement, (ii) ensure that (A) none of Parent, Sub or any other subsidiary of Parent is an "Acquiring Person" (as defined in the Company Rights Agreement), (B) a "Distribution Date" or a "Stock Acquisition Date" (as such terms are defined in the Company Rights Agreement) does not occur and (C) the Company Rights to purchase Series A Junior Participating Preferred Stock issued under the Company Rights Agreement do not become exercisable, in the case of clauses (A), (B) and (C), solely by reason of the execution, delivery or performance of this Agreement, the consummation of the Merger or the other transactions contemplated by this Agreement or compliance with the terms of this Agreement and (iii) provide that the "Expiration Date" (as defined in the Company Rights Agreement) shall occur immediately prior to the Effective Time.

(u) Voting Requirements. The affirmative vote at the Stockholders Meeting or any adjournment or postponement thereof of the holders of a majority of the shares of Company Common Stock outstanding and entitled to vote as of the record date for the Stockholders Meeting (or as of the new record date, if applicable, with respect to any adjournment or postponement thereof) in favor of approving this Agreement (the "Stockholder Approval") is the only vote of the holders of any class or series of the Company's capital stock necessary to approve this Agreement or the consummation of the Merger and the other transactions contemplated by this Agreement.

(v) Brokers; Schedule of Fees and Expenses. No broker, investment banker, financial advisor or other person, other than Goldman, Sachs & Co., the fees and expenses of which will be paid by the Company, is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the Merger or any of the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. The Company has provided Parent with complete and accurate copies of all agreements under which any such fees or commissi