Sample Business Contracts

Agreement and Plan of Merger - Concerto Software Inc. and Aspect Communications Corp.

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

CONCERTO SOFTWARE, INC.,

ASCEND MERGER SUB, INC.

AND

ASPECT COMMUNICATIONS CORPORATION

DATED AS OF JULY 5, 2005

TABLE OF CONTENTS


		Page
ARTICLE I THE MERGER			1
1.1	Effective Time of the Merger.		1
1.2	Closing.		2
1.3	Effects of the Merger.		2
1.4	Articles of Incorporation.		2
1.5	By-laws.		2
1.6	Directors and Officers of the Surviving Corporation.		3
ARTICLE II CONVERSION OF SECURITIES			3
2.1	Conversion of Capital Stock.		3
2.2	Exchange of Certificates.		4
2.3	Company Stock Options.		6
2.4	Dissenting Shares.		7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY			8
3.1	Organization; Standing and Power; Charter Documents; Subsidiaries.		8
3.2	Capital Structure.		10
3.3	Authority; No Conflict; Required Filings and Consents.		11
3.4	SEC Filings; Financial Statements; Information Provided.		13
3.5	No Undisclosed Liabilities.		14
3.6	Absence of Certain Changes or Events.		15
3.7	Taxes.		15
3.8	Owned and Leased Real Properties.		17
3.9	Tangible Personal Property.		17
3.10	Intellectual Property.		18
3.11	Contracts.		21
3.12	Litigation.		23
3.13	Environmental Matters.		24
3.14	Employee Benefit Plans.		25
3.15	Compliance With Laws.		28
3.16	Permits.		28
3.17	Labor Matters.		28
3.18	Insurance.		29
3.19	Opinion of Financial Advisor.		29
3.20	Brokers; Fees.		29
3.21	Transactions with Affiliates.		29
3.22	Information in the Proxy Statement.		30
3.23	State Takeover Statutes.		30
3.24	Rights Agreement.		30
3.25	Change of Control Payments; Expenses.		30
3.26	No Further Representations and Warranties.		31


ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE MERGER SUB		31
4.1	Organization, Standing and Power.	31
4.2	Authority; No Conflict; Required Filings and Consents.	31
4.3	Buyer Financial Statements.	33
4.4	Absence of Certain Changes or Events.	33
4.5	No Undisclosed Liabilities.	34
4.6	Information Provided.	34
4.7	Operations of the Merger Sub.	34
4.8	Litigation.	35
4.9	Financing.	35
4.10	Section 1203 of the CGCL.	35
4.11	No Further Representations and Warranties.	36
ARTICLE V CONDUCT OF BUSINESS		36
5.1	Covenants of the Company.	36
5.2	Confidentiality.	39
ARTICLE VI ADDITIONAL AGREEMENTS		40
6.1	No Solicitation.	40
6.2	Proxy Statement.	44
6.3	Nasdaq Quotation.	45
6.4	Access to Information.	45
6.5	Stockholders Meeting.	45
6.6	Legal Requirements.	46
6.7	Public Disclosure.	47
6.8	Indemnification.	48
6.9	Notification of Certain Matters.	50
6.10	Exemption from Liability Under Section 16.	50
6.11	Employee Stock Purchase Plan.	50
6.12	Employee Compensation.	50
6.13	Accrued Personal, Sick or Vacation Time.	51
6.14	Service Credit.	51
6.15	401(k) Plan.	52
6.16	Resignations.	52
6.17	Financing.	52
ARTICLE VII CONDITIONS TO MERGER		54
7.1	Conditions to Each Party's Obligation to Effect the Merger.	54
7.2	Additional Conditions to Obligations of the Buyer and the Merger Sub.	55
7.3	Additional Conditions to Obligations of the Company.	57
ARTICLE VIII TERMINATION AND AMENDMENT		58
8.1	Termination.	58
8.2	Effect of Termination.	59
8.3	Fees and Expenses.	60
8.4	Amendment.	62


8.5	Extension; Waiver.	62
ARTICLE IX MISCELLANEOUS		62
9.1	Nonsurvival of Representations, Warranties and Agreements.	62
9.2	Notices.	62
9.3	Entire Agreement.	64
9.4	No Third Party Beneficiaries.	64
9.5	Assignment.	64
9.6	Severability.	65
9.7	Counterparts and Signature.	65
9.8	Interpretation.	65
9.9	Governing Law.	66
9.10	Remedies.	66
9.11	Submission to Jurisdiction.	66
9.12	WAIVER OF JURY TRIAL.	67
9.13	Knowledge of the Company.	67

iii

TABLE OF DEFINED TERMS


Terms		Reference in Agreement
Acquired Company Plan		Section 3.14(a)
Acquisition Proposal		Section 6.1(g)
Acquisition Transaction		Section 8.3(c)
Affiliate		Section 3.4(b)
Agreement		Preamble
Agreement of Merger		Section 1.1
Alternative Acquisition Agreement		Section 6.1(b)(ii)
Antitrust Laws		Section 6.6(b)
Antitrust Order		Section 6.6(b)
Bankruptcy and Equity Exception		Section 3.3(a)
Business Day		Section 1.2
Buyer		Preamble
Buyer Balance Sheet		Section 4.3
Buyer Financial Statements		Section 4.3
Buyer Material Adverse Effect		Section 4.1
Buyer Parent		Section 4.3
Buyer Subsidiary		Section 4.3
Certificate		Section 2.2(b)
CGCL		Recitals
Change in the Company Recommendation		Section 6.1(b)(iii)
Closing		Section 1.2
Closing Date		Section 1.2
Code		Section 2.2(f)
Commitment Letters		Section 4.9
Company		Preamble
Company Balance Sheet		Section 3.5
Company Board		Section 3.3(a)
Company Charter Documents		Section 3.1(b)
Company Common Consideration		Section 2.1(d)
Company Common Stock		Section 2.1(b)
Company Disclosure Schedule		Article III
Company Employees		Section 3.14(a)
Company Employee Plans		Section 3.14(a)
Company Material Adverse Effect		Section 3.1(a)
Company Material Contract		Section 3.11(a)
Company Meeting		Section 3.3(d)
Company Permits		Section 3.16
Company Recommendation		Section 6.2
Company SEC Reports		Section 3.4(a)


Terms		Reference in Agreement
Company Series A Preferred Stock		Section 3.2(a)
Company Series B Merger Consideration		Section 2.1(c)
Company Series B Preferred Stock		Section 2.1(c)
Company Software		Section 3.10(c)
Company Stock Options		Section 2.3(a)(i)
Company Stock Plans		Section 2.3(a)(i)
Company Stockholder Approval		Section 3.3(a)
Company Termination Fee		Section 8.3(b)
Company Voting Proposal		Section 3.3(a)
Commitment Letters		Section 4.9
Confidentiality Agreement		Section 5.2
Continuing Employees		Section 6.12
Contract		Section 3.3(b)
Costs		Section 6.8(a)
D&O Tail		Section 6.8(c)
Debt Commitment Letter		Section 4.9
Debt Financing		Section 4.9
Deferred Compensation Plan		Section 3.14(j)
Dissenting Shares		Section 2.4(a)
Effective Time		Section 1.1
Employee Benefit Plan		Section 3.14(a)
Employee Stock Purchase Plan		Section 3.2(a)
Environmental Law		Section 3.13(b)
Equity Commitment Letter		Section 4.9
Equity Financing		Section 4.9
ERISA		Section 3.14(a)
ERISA Affiliate		Section 3.14(a)
Exchange Act		Section 3.1(a)
Exchange Agent		Section 2.2(a)
Exchange Fund		Section 2.2(a)
Expenses		Section 8.3(a)
Financing		Section 4.9
First-Lien Term Facility		Section 4.9
Foreign Benefit Plan		Section 3.14(i)
GAAP		Section 3.4(a)
Governmental Entity		Section 3.3(c)
Hazardous Substance		Section 3.13(c)
HSR Act		Section 3.3(c)
Identified Company Representation		Section 7.2(a)
Indemnified Parties		Section 6.8(a)
Insurance Cap		Section 6.8(c)
Intellectual Property		Section 3.10(a)


Terms		Reference in Agreement
IRS		Section 3.7(b)
Leases		Section 3.8(b)
Liens		Section 3.1(c)
Merger		Recitals
Merger Consideration		Section 2.1(d)
Merger Sub		Preamble
Morgan Stanley		Section 3.19
Option Consideration		Section 2.3(b)
Outside Date		Section 8.1(b)
Owned Real Property		Section 3.8(a)
Pre-Closing Period		Section 5.1
Proxy Statement		Section 3.4(b)
Required Company Shareholder Vote		Section 3.3(d)
Representatives		Section 6.1(a)
Revolving Facility		Section 4.9
Rights Agreement		Section 3.24
SEC		Section 3.1(a)
Second-Lien Facility		Section 4.9
Securities Act		Section 3.4(b)
Subsidiary		Section 3.1(a)
Subsidiary Charter Documents		Section 3.1(b)
Superior Proposal		Section 6.1(g)
Surviving Corporation		Section 1.3
Surviving Corporation Employee Plan		Section 6.14
Tax Returns		Section 3.7(a)
Taxes		Section 3.7(a)
Third Party Software		Section 3.10(c)
To the knowledge of the Company		Section 9.13
401(k) Plan		Section 6.15

iii

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as of July 5, 2005, by and among Concerto Software, Inc., a Delaware corporation (the "Buyer"), Ascend Merger Sub, Inc., a California corporation and a wholly owned subsidiary of the Buyer (the "Merger Sub"), and Aspect Communications Corporation, a California corporation (the "Company").

RECITALS

A. The Boards of Directors of the Buyer and the Company deem it advisable and in the best interests of each corporation and their respective shareholders that the Buyer acquire the Company in order to advance the long-term business interests of the Buyer and the Company;

B. The acquisition of the Company shall be effected through a merger (the "Merger") of the Merger Sub with and into the Company in accordance with the terms of this Agreement and the California General Corporation Law (the "CGCL"), as a result of which the Company shall become a wholly owned subsidiary of the Buyer;

C. Concurrently with the execution of this Agreement, and as a condition and inducement to the Buyer's willingness to enter into this Agreement, Vista Equity Fund II, L.P. is entering into a voting agreement with the Buyer; and

D. The respective Boards of Directors of the Buyer, the Merger Sub and the Company deem it advisable and in the best interests of their respective shareholders to consummate the Merger on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below, the Buyer, the Merger Sub and the Company agree as follows:

ARTICLE I
THE MERGER

1.1 Effective Time of the Merger.

Subject to the provisions of this Agreement, at or prior to the Closing, the Buyer and the Company shall jointly prepare and cause to be filed with the Secretary of State of California an agreement of merger (the "Agreement of Merger") in such form as is required by, and executed by the Company, the Buyer and Merger Sub in accordance with, the relevant provisions of the CGCL and shall make all other filings or recordings required under the CGCL. The Merger shall become effective upon the filing of the Agreement of Merger with the Secretary of State of California or at such later time as is

established by the Buyer and the Company and set forth in the Agreement of Merger (the "Effective Time").

1.2 Closing.

The closing of the Merger (the "Closing") shall take place at 10:00 a.m., Pacific Time, on a date to be specified by the Buyer and the Company (the "Closing Date"), which shall be no later than the fifth Business Day after satisfaction or waiver of the conditions set forth in Article VII (other than delivery of items to be delivered at the Closing and other than satisfaction of those conditions that by their nature are to be satisfied at the Closing, it being understood that the occurrence of the Closing shall remain subject to the delivery of such items and the satisfaction or waiver of such conditions at the Closing), at the offices of Heller Ehrman LLP, 275 Middlefield Road, Menlo Park, California, unless another date, place or time is agreed to in writing by the Buyer and the Company. For purposes of this Agreement, a "Business Day" shall be any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions located in San Francisco, California are permitted or required by law, executive order or governmental decree to remain closed.

1.3 Effects of the Merger.

At the Effective Time, the separate existence of the Merger Sub shall cease and the Merger Sub shall be merged with and into the Company (the Company surviving the Merger is sometimes referred to herein as the "Surviving Corporation"). The Merger shall have the effects set forth in Sections 1107 and 1107.5 of the CGCL.

1.4 Articles of Incorporation.

At the Effective Time, the Articles of Incorporation of the Company, as in effect immediately prior to the Effective Time, shall be amended and restated to read in their entirety so as to conform to the Articles of Incorporation of the Merger Sub, as in effect immediately prior to the Effective Time, and, as so amended and restated, shall be the Articles of Incorporation of the Surviving Corporation until thereafter amended in accordance with the provisions thereof and as provided by applicable law.

1.5 By-laws.

At the Effective Time, the By-laws of the Company, as in effect immediately prior to the Effective Time, shall be amended and restated to read in their entirety so as to conform to the By-laws of the Merger Sub, as in effect immediately prior the Effective Time, and, as so amended and restated, shall become the By-laws of the Surviving Corporation until thereafter amended as provided by applicable law, the Articles of Incorporation of the Surviving Corporation and such By-laws.

1.6 Directors and Officers of the Surviving Corporation.

(a) The directors of the Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the Articles of Incorporation and By-laws of the Surviving Corporation.

(b) The officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, each to hold office in accordance with the Articles of Incorporation and By-laws of the Surviving Corporation.

ARTICLE II
CONVERSION OF SECURITIES

2.1 Conversion of Capital Stock.

As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any shares of the capital stock of the Company or capital stock of the Merger Sub:

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

(b) Cancellation of Treasury Stock and Buyer-Owned Stock. All shares of common stock, $0.01 par value per share, of the Company ("Company Common Stock") that are owned by the Company as treasury stock and any shares of Company Common Stock owned by the Buyer, the Merger Sub or any other wholly owned Subsidiary of the Buyer immediately prior to the Effective Time shall be cancelled and shall cease to exist and no consideration shall be delivered in exchange therefore.

(c) Merger Consideration for Series B Preferred Stock. Subject to Section 2.2, each share of Series B convertible preferred stock, par value $ 0.01 per share, of the Company (the "Company Series B Preferred Stock") issued and outstanding immediately prior to the Effective Time shall be automatically converted into the right to receive an amount in cash equal to $5,155.5555 per share (the "Company Series B Merger Consideration"). As of the Effective Time, all such shares of Company Series B Preferred Stock shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a certificate representing any such shares of Company Series B Preferred Stock shall cease to have any rights with respect thereto, except the right to receive the Company Series B Merger Consideration pursuant to this Section 2.1(c) upon the surrender of such certificate in accordance with Section 2.2, without interest.

(d) Merger Consideration for Company Common Stock. Subject to Section 2.2, each share of Company Common Stock (other than (i) shares to be cancelled in accordance with Section 2.1(b) and (ii) Dissenting Shares (as defined in Section 2.4(a) below)) issued and outstanding immediately prior to the Effective Time shall be automatically converted into the right to receive an amount in cash equal to $11.60 per share (the "Company Common Consideration" and, together with the Company Series B Merger Consideration, the "Merger Consideration"). To the extent any vesting condition or any other condition requiring forfeiture to the Company would otherwise apply to any share of Company Common Stock as of immediately prior to the Effective Time, such vesting or forfeiture condition shall lapse in full as of immediately prior to the Effective Time. As of the Effective Time, all such shares of Company Common Stock shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a certificate representing any such shares of Company Common Stock shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration pursuant to this Section 2.1(d) upon the surrender of such certificate in accordance with Section 2.2, without interest.

(e) Adjustments to Merger Consideration. The Company Common Consideration shall be adjusted to reflect fully the effect of any reclassification, stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Company Common Stock), reorganization, recapitalization or other like change with respect to Company Common Stock occurring (or for which a record date is established) after the date hereof and prior to the Effective Time.

2.2 Exchange of Certificates.

The procedures for exchanging certificates representing shares of Company Common Stock and/or Company Series B Preferred Stock for the applicable Merger Consideration pursuant to the Merger are as follows:

(a) Exchange Agent. At or promptly following the Effective Time, the Buyer shall deposit with EquiServe Trust Company, N.A. or another bank or trust company designated by the Buyer and reasonably acceptable to the Company (the "Exchange Agent"), for the benefit of the holders of shares of Company Common Stock and the holders of shares of Company Series B Preferred Stock, in each case, issued and outstanding immediately prior to the Effective Time, for payment through the Exchange Agent in accordance with this Section 2.2, cash in an amount which, together with the amount deposited with the Exchange Agent by the Company pursuant to Section 7.2(d), is sufficient to make payment of the Merger Consideration pursuant to Section 2.1(c) and 2.1(d) in exchange for all of the outstanding shares of Company Common Stock and Company Series B Preferred Stock (the "Exchange Fund").

(b) Exchange Procedures. Promptly after the Effective Time, the Buyer shall cause the Exchange Agent to mail to each holder of record of a certificate which

immediately prior to the Effective Time represented outstanding shares of Company Common Stock or Company Series B Preferred Stock (each, a "Certificate") (i) a letter of transmittal in customary form and (ii) instructions for effecting the surrender of the Certificates in exchange for the applicable Merger Consideration payable with respect thereto. Upon surrender of a Certificate for cancellation to the Exchange Agent, together with such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor the applicable Merger Consideration that such holder has the right to receive pursuant to the provisions of this Article II, and the Certificate so surrendered shall immediately be cancelled. In the event of a transfer of ownership of Company Common Stock or Company Series B Preferred Stock which is not registered in the transfer records of the Company, the applicable Merger Consideration may be paid to a person other than the person in whose name the Certificate so surrendered is registered, if such Certificate is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid. Until surrendered as contemplated by this Section 2.2, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the applicable Merger Consideration as contemplated by this Section 2.2.

(c) No Further Ownership Rights in Company Stock. All Merger Consideration paid upon the surrender for exchange of Certificates evidencing shares of Company Common Stock or Company Series B Preferred Stock in accordance with the terms hereof shall be deemed to have been paid in satisfaction of all rights pertaining to such shares of Company Common Stock or Company Series B Preferred Stock, and from and after the Effective Time there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock or Company Series B Preferred Stock which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Exchange Agent for any reason, they shall be cancelled and exchanged as provided in this Article II.

(d) Termination of Exchange Fund. Any portion of the Exchange Fund which remains undistributed to the holders of Company Common Stock or Company Series B Preferred Stock for one year after the Effective Time shall be delivered to the Buyer, upon demand, and any holder of Company Common Stock or Company Series B Preferred Stock who has not previously complied with this Section 2.2 shall look only to the Buyer (subject to abandoned property, escheat and similar laws) for payment of its claim for Merger Consideration without interest.

(e) No Liability. To the extent permitted by applicable law, none of the Buyer, the Merger Sub, the Company, the Surviving Corporation or the Exchange Agent shall be liable to any holder of shares of Company Common Stock or Company Series B Preferred Stock for any Merger Consideration in respect of such shares, cash or property

delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

(f) Withholding Rights. Each of the Buyer and the Surviving Corporation shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Common Stock, Company Series B Preferred Stock or Company Stock Options such amounts as it 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 other applicable state, local or foreign tax law. To the extent that amounts are so withheld by the Surviving Corporation or the Buyer, as the case may be, such withheld amounts (i) shall be remitted by the Buyer or the Surviving Corporation, as the case may be, to the applicable Governmental Entity, and (ii) shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock or Company Series B Preferred Stock in respect of which such deduction and withholding was made by the Surviving Corporation or the Buyer, as the case may be.

(g) Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof pursuant to this Agreement.

(h) Stock Transfer Books. At the close of business, New York City time, on the day the Effective Time occurs, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers of shares thereafter on the records of the Company. From and after the Effective Time, the holders of Certificates representing shares of Company Common Stock or Company Series B Preferred Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares, except as otherwise provided in this Agreement or by applicable law. On or after the Effective Time, any Certificates presented to the Exchange Agent or the Buyer for any reason shall be canceled against delivery of the Merger Consideration to which the holders thereof are entitled pursuant to Sections 2.1(c) and 2.1(d).

2.3 Company Stock Options.

(a) The Company shall take such action as shall be required:

(i) to cause the vesting of any unvested options to purchase Company Common Stock ("Company Stock Options") granted under the Company's 1989 Stock Option Plan, as amended, Amended and Restated 1998 Directors' Stock Option Plan, Amended and Restated 1996 Employee Stock Option Plan, 1999 Equity Incentive Plan, Annual Retainer Compensation Plan for Directors, Voicetek Corporation 1992 Equity Incentive Plan, Voicetek Corporation 1996 Stock Option Plan, PakNetX

Corporation 1997 Stock Plan and Commerce Soft Inc. 1997 Stock Plan (as amended, effective August 14, 1997) (the "Company Stock Plans") to be accelerated in full effective immediately prior to the Effective Time (it being agreed and understood that for purposes of the Company Stock Plans, the Buyer, the Merger Sub and the Surviving Corporation shall be treated as having refused to assume the rights outstanding under such plans or substitute similar rights therefor);

(ii) subject to the conversion of each Company Stock Option as set forth in Section 2.3(a)(iii) below, to effectuate the cancellation, as of the Effective Time, of all Company Stock Options outstanding immediately prior to the Effective Time (without regard to the exercise price of such Company Stock Options); and

(iii) to cause each outstanding Company Stock Option to represent on the first Business Day following the Effective Time solely the right to receive, in accordance with this Section 2.3, a lump sum cash payment in the amount of the Option Consideration (as defined below), if any, with respect to such Company Stock Option and to no longer represent the right to purchase Company Common Stock or any other equity security of the Company, the Buyer, the Surviving Corporation or any other person or any other consideration.

(b) Each holder of a Company Stock Option that remains unexercised as of the Effective Time shall receive from the Buyer or the Company, in respect and in consideration of each Company Stock Option so cancelled, no later that the fifth Business Day following the Effective Time, a cash payment (net of applicable withholding taxes) equal to the product of (i) the excess, if any, of (A) the Company Common Consideration over (B) the exercise price per share of Company Common Stock subject to such Company Stock Option, multiplied by (ii) the total number of shares of Company Common Stock subject to such Company Stock Option (whether or not then vested or exercisable), without any interest thereon (the "Option Consideration"). In the event that the exercise price of any Company Stock Option is equal to or greater than the Company Common Consideration, such Company Stock Option shall be cancelled at the Effective Time without payment and have no further force or effect.

(c) As soon as practicable following the execution of this Agreement, the Company shall mail to each person who is a holder of Company Stock Options a letter describing the treatment of and payment for such Company Stock Options pursuant to this Section 2.3 and providing instructions for use in obtaining payment for such Company Stock Options.

2.4 Dissenting Shares.

(a) Notwithstanding anything to the contrary contained in this Agreement, shares of Company Common Stock held by a holder who is entitled to demand and has made a demand for purchase of such shares of Company Common Stock

in accordance with Chapter 13 of the CGCL and has not voted in favor of the approval of this Agreement (any such shares being referred to as "Dissenting Shares" until such time as such holder fails to perfect or otherwise loses such holder's dissenters' rights under the CGCL with respect to such shares) shall not be converted into or represent the right to receive Company Common Consideration in accordance with Section 2.1, but shall be entitled only to such rights as are granted by the CGCL to a holder of Dissenting Shares.

(b) If any Dissenting Shares shall lose their status as such (through failure to perfect or otherwise), then, as of the later of the Effective Time or the date of loss of such status, such shares shall automatically be converted into and shall represent only the right to receive Company Common Consideration in accordance with Section 2.1, without interest thereon, upon surrender of the Certificates representing such shares.

(c) The Company shall give the Buyer: (i) prompt notice of any written demand for appraisal received by the Company prior to the Effective Time pursuant to the CGCL, any withdrawal of any such demand and any other demand, notice or instrument delivered to the Company prior to the Effective Time pursuant to the CGCL that relate to such demand; and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to any such demand, notice or instrument. The Company shall not make any payment or settlement offer prior to the Effective Time with respect to any such demand, notice or instrument unless the Buyer shall have given its written consent to such payment or settlement offer.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Buyer and the Merger Sub, except as set forth in the disclosure schedule delivered by the Company to the Buyer and the Merger Sub and dated as of the date of this Agreement (the "Company Disclosure Schedule"), as follows:

3.1 Organization; Standing and Power; Charter Documents; Subsidiaries.

(a) Organization; Standing and Power. The Company and each of its Subsidiaries (as defined below) (i) is a corporation or other organization duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or 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 the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted, and (iii) is duly qualified or licensed and, where applicable as a legal concept, in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such

qualification or licensing necessary, except where the failure to be so organized, qualified, licensed or in good standing, or to have such power or authority, when taken together with all other such failures, would not have a Company Material Adverse Effect (as defined below). For purposes of this Agreement, "Subsidiary," when used with respect to the Company, shall mean each subsidiary of the Company listed on Exhibit 21.1 to the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the "SEC") on March 15, 2005 pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For purposes of this Agreement, the term "Company Material Adverse Effect" means any change, event or circumstance resulting in (i) a material adverse effect on the business, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries, taken as a whole or (ii) a prohibition on the Company's ability to consummate the Merger; provided, however, that no change or effect resulting from any of the following shall be considered in determining whether there has occurred a Company Material Adverse Effect: (A) changes in national or international economic or business conditions generally or the outbreak or escalation of hostilities, including acts of war or terrorism (in each case, other than those having a materially disproportionate effect on the Company and its Subsidiaries, taken as a whole); (B) changes in factors generally affecting the industries or markets in which the Company and its Subsidiaries operate (other than any such change having a materially disproportionate impact on the Company and its Subsidiaries, taken as a whole); (C) changes in any accounting rule or regulation or GAAP or the interpretation thereof; (D) any action taken pursuant to this Agreement, including the public announcement of the transactions contemplated by this Agreement; (E) any failure by the Company to meet any published estimates of revenues or earnings for any period ending on or after the date of this Agreement and prior to the Closing Date; (F) a decline in the price of the Company Common Stock on The Nasdaq National Market; (G) disruptions in financial, banking or securities markets generally (other than any such disruptions having a materially disproportionate effect on the Company and its Subsidiaries, taken as a whole); or (H) changes resulting from the announcement of the execution of this Agreement and the consummation of the transactions contemplated hereby.

(b) Charter Documents. The Company has delivered or made available to the Buyer: (i) a true and correct copy of the Amended and Restated Articles of Incorporation and By-laws of the Company, each as amended to date (collectively, the "Company Charter Documents") and (ii) the Articles of Incorporation and By-laws, or like organizational documents (collectively, "Subsidiary Charter Documents"), of each of its Subsidiaries, and each such instrument is in full force and effect. The Company is not in violation of any of the provisions of the Company Charter Documents and each Subsidiary is not in violation of any of the provisions of its respective Subsidiary Charter Documents.

(c) Subsidiaries. Section 3.1(c) of the Company Disclosure Schedule lists each Subsidiary of the Company. All the outstanding shares of capital stock of, or other equity or voting interests in, each such Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable and are owned by the Company or by a direct or indirect wholly-owned subsidiary of the Company, free and clear of all material pledges, claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever, other than liens for taxes not yet due and payable (collectively, "Liens") or restrictions imposed by applicable securities laws. Other than the Subsidiaries of the Company, neither the Company nor any of its Subsidiaries owns any capital stock of, or other equity or voting interests of any nature in, or any interest convertible into or exchangeable or exercisable for, capital stock of, or other equity or voting interests of any nature in, any other person.

3.2 Capital Structure.

(a) The authorized capital stock of Company consists of 200,000,000 shares of Company Common Stock, 100,000 shares of Series A participating preferred stock, par value $0.01 per share (the "Company Series A Preferred Stock") and 50,000 shares of Company Series B Preferred Stock. At the close of business on June 30, 2005, 61,609,494 shares of Company Common Stock were issued and outstanding, no shares of Company Series A Preferred Stock were issued and outstanding and 50,000 shares of Company Series B Preferred Stock were issued and outstanding. All of the outstanding shares of capital stock of the Company are duly authorized and validly issued, fully paid and nonassessable and not subject to any preemptive rights. Section 3.2 of the Company Disclosure Schedule sets forth a complete and accurate list of: (i) all Company Stock Plans, indicating for each Company Stock Plan, as of the date hereof, the number of shares of Company Common Stock issued under such Company Stock Plan, the number of shares of Company Common Stock subject to outstanding options under such Company Stock Plan and the number of shares of Company Common Stock reserved for future issuance under such Company Stock Plan; and (ii) all outstanding Company Stock Options other than those granted following the date of this Agreement in compliance with Section 5.1(h) hereof, indicating with respect to each such Company Stock Option the name of the holder thereof, the Company Stock Plan under which it was granted, the number of shares of Company Common Stock subject to such Company Stock Option, the exercise price and the date of grant thereof. Except as set forth above, and except for shares of Company Common Stock issuable pursuant to the Company's 1990 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and as permitted to be issued pursuant to Section 5.1(h) hereof following the date of this Agreement and prior to the Closing Date (a) there are no shares of capital stock of the Company authorized, issued or outstanding; (b) there are no existing options, warrants, calls, preemptive rights, subscription or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company, obligating the Company to issue, transfer, redeem, purchase or sell or cause to be issued, transferred, redeemed,

purchased or sold any shares of capital stock of the Company or to otherwise make any payment in respect of any such shares; and (c) there are no rights, agreements or arrangements of any character which provide for any stock appreciation or similar right or grant any right to share in the equity, income, revenue or cash flow of the Company.

(b) Section 3.2(b) of the Company Disclosure Schedule sets forth a list of all stockholder agreements, voting trusts and other agreements or understandings to which the Company is a party or which are otherwise known to the Company and relating to voting or disposition of any shares of the Company's capital stock or granting to any person or group of persons the right to elect, or to designate or nominate for election, a director to the board of directors of the Company or any of its Subsidiaries.

3.3 Authority; No Conflict; Required Filings and Consents.

(a) The Company has all requisite corporate power and authority to enter into this Agreement and, subject to the adoption of this Agreement (the "Company Voting Proposal") by the Company's shareholders under the CGCL (the "Company Stockholder Approval"), to perform its obligations under and consummate the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, the Board of Directors of the Company (the "Company Board"), at a meeting duly called and held, with all directors present voting in favor, (i) determined that the Merger is fair and in the best interests of the Company and its shareholders, (ii) approved the Merger in accordance with the provisions of the CGCL, and (iii) directed that this Agreement be submitted to the shareholders of the Company for their approval and resolved to recommend (subject to the provisions of Section 6.1 of this Agreement) that the shareholders of the Company vote in favor of the approval of this Agreement. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement by the Company have been duly authorized by all necessary corporate action on the part of the Company, subject only to the required receipt of the Company Stockholder Approval. This Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles (the "Bankruptcy and Equity Exception").

(b) 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 will not, (i) conflict with, or result in any violation or breach of, any provision of the Company Charter Documents or the Subsidiary Charter Documents, (ii) conflict with, result in any violation or breach of, constitute (with or without notice or lapse of time, or both) a default (or give rise to a right of termination, cancellation, modification or acceleration of any obligation or loss of any material benefit) under, or result in the imposition of any Lien on the Company's or any of its Subsidiaries' assets pursuant to,

any of the terms, conditions or provisions of any lease, license, contract, subcontract, indenture, note, option or other agreement, instrument or obligation, written or oral, to which the Company or any of its Subsidiaries is a party or by which any of them or any of their properties or assets may be bound (each, a "Contract"), or (iii) subject to obtaining the Company Stockholder Approval and compliance with the requirements specified in Section 3.3(c), conflict with or violate any permit, concession, franchise, license, judgment, injunction, order, writ, decree, statute, law, ordinance, rule, or regulation applicable to the Company or any of its Subsidiaries or any of its or their respective properties or assets, except, in the case of clauses (ii) and (iii) of this Section 3.3(b), for any such conflicts, violations, breaches, defaults, terminations, cancellations, modifications, accelerations, losses or Liens, and for any consents or waivers not obtained, that, individually or in the aggregate, would not result in a Company Material Adverse Effect.

(c) No consent, approval, action, license, permit, order, certification, concession, franchise or authorization of, or registration, declaration, notice or filing with, any federal, state, local or foreign court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority, agency or instrumentality (a "Governmental Entity") or any stock market or stock exchange on which shares of Company Common Stock are listed for trading is required to be obtained or made, as the case may be, by the Company or any of its Subsidiaries in connection with the execution, delivery and performance of this Agreement by the Company or the consummation by the Company of the transactions contemplated by this Agreement, except for (i) the pre-merger notification requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and applicable foreign Antitrust Laws, (ii) the filing of the Agreement of Merger with the Secretary of State of California, (iii) the filing of the Proxy Statement with the SEC under the Exchange Act, (iv) the filing of such reports, schedules o