<SUBMISSION>
<ACCESSION-NUMBER>0000912057-00-051072
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20001109
<ITEMS>5
<ITEMS>7
<FILING-DATE>20001121
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ACTIVE VOICE CORP
<CIK>0000869554
<ASSIGNED-SIC>3661
<IRS-NUMBER>911235111
<STATE-OF-INCORPORATION>WA
<FISCAL-YEAR-END>0331
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-22804
<FILM-NUMBER>774478
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2901 THIRD AVE
<STREET2>STE 500
<CITY>SEATTLE
<STATE>WA
<ZIP>98121-9800
<PHONE>2064414700
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2901 THIRD AVE
<STREET2>SUITE 500
<CITY>SEATTLE
<STATE>WA
<ZIP>98121
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a2031672z8-k.htm
<DESCRIPTION>8-K
<TEXT>

<HTML>
<HEAD>
<TITLE> Prepared by MERRILL CORPORATION www.edgaradvantage.com
</TITLE>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
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<P ALIGN="CENTER"><FONT SIZE=5><B>SECURITIES AND EXCHANGE COMMISSION<BR>  </B></FONT><FONT SIZE=2><B>Washington, D.C. 20549  </B></FONT></P>

<HR NOSHADE WIDTH="120">
<P ALIGN="CENTER"><FONT SIZE=5><B>FORM 8-K  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B> CURRENT REPORT<BR>  </B></FONT><FONT SIZE=4><B>PURSUANT TO SECTION 13 OR 15(d)<BR>
OF THE SECURITIES EXCHANGE ACT OF 1934  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>Date of Report (Date of earliest event reported): November&nbsp;9, 2000  </B></FONT></P>

<HR NOSHADE WIDTH="120">
<P ALIGN="CENTER"><FONT SIZE=5><B>ACTIVE VOICE CORPORATION<BR>  </B></FONT><FONT SIZE=2>(Exact name of registrant as specified in its charter) </FONT></P>

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<TD WIDTH="36%" ALIGN="CENTER"><FONT SIZE=2><B>WASHINGTON</B></FONT><FONT SIZE=2><BR>
(State or other jurisdiction of<BR>
incorporation or organization)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" ALIGN="CENTER"><FONT SIZE=2><B>0-22804</B></FONT><FONT SIZE=2><BR>
(Commission File Number)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="25%" ALIGN="CENTER"><FONT SIZE=2><B>91-1235111</B></FONT><FONT SIZE=2><BR>
(I.R.S. Employer)<BR>
Identification No.)</FONT></TD>
</TR>
</TABLE></DIV>
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<DIV ALIGN="CENTER"><TABLE WIDTH="66%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD WIDTH="49%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><B>2901 THIRD AVENUE, SUITE 500<BR>
SEATTLE, WASHINGTON<BR> </B></FONT><FONT SIZE=2>(Address of principal executive offices)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2>98121-9800<BR>
&nbsp;<BR>
(Zip Code)<BR></FONT>
</TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=2>Registrant's
telephone number, including area code: (206)&nbsp;441-4700 </FONT></P>

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<H2><FONT SIZE=2> </FONT></H2>
<BR>

<P><FONT SIZE=2><A
NAME="da2043_item_5._other_events"> </A></FONT> <FONT SIZE=2><B>Item 5.&nbsp;&nbsp;Other Events         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;10, 2000, Active Voice Corporation ("Active Voice") announced a definitive agreement to be acquired by Cisco Systems,&nbsp;Inc. ("Cisco")
pursuant to an Agreement and Plan of Merger and Reorganization dated as of November&nbsp;9, 2000 (the "Merger Agreement") by and among Cisco, Active Voice and Aqua Acquisition Corporation, a
Delaware corporation and wholly-owned subsidiary of Cisco. Under the Merger Agreement, as more fully describe in the press release which is attached as Exhibit&nbsp;99.1 and is incorporated herein
by reference, each share of Active Voice's common stock issued and outstanding immediately prior to the effective time of the merger shall automatically be converted into the right to receive shares
of Cisco's common stock. Cisco will pay approximately $296&nbsp;million in stock for Active Voice. The purchase price will be shared by all Active Voice security holders. As of November&nbsp;9,
2000, there were approximately 14.8&nbsp;million shares of Active Voice outstanding on a fully diluted basis. The acquisition has been approved by the Board of Directors of each company and is
subject to various closing conditions including Active Voice shareholder approval and approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The foregoing
summary of the merger is qualified in its entirety by reference to the Merger Agreement included as Exhibit&nbsp;2.1 and incorporated herein by reference. </FONT></P>

<BR>

<P><FONT SIZE=2><A
NAME="da2043_item_7._financial_statements_and_exhibits."> </A></FONT> <FONT SIZE=2><B>Item 7.&nbsp;&nbsp;Financial Statements And Exhibits.         </B></FONT></P>

<UL>
<DL compact>
<DT><FONT SIZE=2>(c)</FONT></DT><DD><FONT SIZE=2>Exhibits
</FONT></DD></DL>
</UL>
<BR>
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<TR VALIGN="BOTTOM">
<TH WIDTH="9%" ALIGN="CENTER"><FONT SIZE=1><B>Exhibit No.</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="89%" ALIGN="LEFT"><FONT SIZE=1><B>Description<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>2.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Agreement and Plan of Merger and Reorganization dated as of November&nbsp;9, 2000, by and among Cisco Systems,&nbsp;Inc., a California corporation, Aqua Acquisition Corporation, a Delaware corporation, and Active Voice
Corporation, a Washington corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;<BR>
99.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>&nbsp;<BR>
Press Release of Active Voice Corporation dated November&nbsp;10, 2000</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

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<H2><FONT SIZE=2> </FONT></H2>
<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="jc2043_signatures"> </A></FONT> <FONT SIZE=2><B>SIGNATURES         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=3><FONT SIZE=2>ACTIVE VOICE CORPORATION</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;<BR>
November&nbsp;16, 2000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;<BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;<BR>
/s/&nbsp;</FONT><FONT SIZE=2>JOSE DAVID</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Jose David<BR></FONT> <FONT SIZE=2><I>Chief Financial Officer</I></FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<H2><FONT SIZE=2> </FONT></H2>
<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ka2043_index_to_exhibits"> </A></FONT> <FONT SIZE=2><B>INDEX TO EXHIBITS         </B></FONT></P>

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<TH WIDTH="9%" ALIGN="CENTER"><FONT SIZE=1><B>Exhibit No.</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="89%" ALIGN="LEFT"><FONT SIZE=1><B>Description<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>2.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Agreement and Plan of Merger and Reorganization dated as of November&nbsp;9, 2000, by and among Cisco Systems,&nbsp;Inc., a California corporation, Aqua Acquisition Corporation, a Delaware corporation, and Active Voice
Corporation, a Washington corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;<BR>
99.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>&nbsp;<BR>
Press Release of Active Voice Corporation dated November&nbsp;10, 2000</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<BR>
<H2><FONT SIZE=2><A NAME="00SEA2043_1">QuickLinks</A></FONT></H2>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#da2043_item_5._other_events">Item 5. Other Events</A></FONT><BR>
<FONT SIZE=2><A HREF="#da2043_item_7._financial_statements_and_exhibits.">Item 7. Financial Statements And Exhibits.</A></FONT><BR>
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<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#jc2043_signatures">SIGNATURES</A></FONT><BR>
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<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#ka2043_index_to_exhibits">INDEX TO EXHIBITS</A></FONT><BR>
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</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>2
<FILENAME>a2031672zex-2_1.htm
<DESCRIPTION>EXHIBIT 2.1
<TEXT>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kb2043_agreement_and_plan_of_merger_a__agr05790"> </A></FONT> <FONT SIZE=2><B>AGREEMENT AND PLAN OF MERGER AND REORGANIZATION<BR>       BY AND AMONG<BR>       CISCO SYSTEMS,&nbsp;INC.,<BR>       AQUA ACQUISITION CORPORATION<BR>       AND<BR>
   ACTIVE VOICE CORPORATION<BR>       November&nbsp;9, 2000             </B></FONT><FONT SIZE=2><B>
</B></FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B> <A NAME="kb2043_table_of_contents"> </A>
             TABLE OF CONTENTS         </B></FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="9%" COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="82%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Page</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="92%" COLSPAN=4><FONT SIZE=2>ARTICLE I THE MERGER</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>The Merger</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Closing; Effective Time</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Effect of the Merger</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Certificate of Incorporation; Bylaws</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.5</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Directors and Officers</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Effect on Capital Stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Surrender of Certificates</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>3</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.8</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>No Further Ownership Rights in Company Common Stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>4</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.9</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Lost, Stolen or Destroyed Certificates</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.10</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Tax Consequences</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.11</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Withholding Rights</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.12</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Termination of Exchange Agent Funding</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>1.13</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Taking of Necessary Action; Further Action</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="92%" COLSPAN=4><FONT SIZE=2>&nbsp;<BR>
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;<BR>
5</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Organization, Standing and Power</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Capital Structure</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Authority</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>7</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>SEC Documents; Financial Statements</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.5</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Absence of Certain Changes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Absence of Undisclosed Liabilities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Litigation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.8</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Restrictions on Business Activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.9</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Governmental Authorization</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.10</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Title to Property</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.11</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Intellectual Property</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.12</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Environmental Matters</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.13</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.14</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Employee Benefit Plans</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>14</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.15</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Certain Agreements Affected by the Merger</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.16</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Employee Matters</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.17</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Interested Party Transactions</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.18</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Insurance</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Compliance With Laws</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.20</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Minute Books</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.21</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Complete Copies of Materials</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.22</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Brokers' and Finders' Fees</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.23</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Registration Statement; Proxy Statement/Prospectus</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Opinion of Financial Advisor</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.25</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Vote Required</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.26</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Board Approval</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.27</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Stockholder Agreement; Irrevocable Proxies</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.28</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Chapter 23B.19 of the Washington Business Company Act Not Applicable</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.29</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Inventory</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.30</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Accounts Receivable</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.31</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Customers and Suppliers</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>20</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.32</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Export Control Laws</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>20</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>i</FONT></P>

<HR NOSHADE>
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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.33</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Year 2000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>20</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>2.34</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Representations Complete</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>20</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="92%" COLSPAN=4><FONT SIZE=2>&nbsp;<BR>
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;<BR>
21</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>3.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Organization, Standing and Power</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>3.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Capital Structure</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>3.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Authority</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>3.4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>SEC Documents; Financial Statements</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>3.5</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Absence of Undisclosed Liabilities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>3.6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Litigation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>3.7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Broker's and Finders' Fees</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>3.8</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Registration Statement; Proxy Statement/Prospectus</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>3.9</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Board Approval</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>3.10</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Representations Complete</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="92%" COLSPAN=4><FONT SIZE=2>&nbsp;<BR>
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;<BR>
23</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>4.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Conduct of Business of Company</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>4.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Restrictions on Conduct of Business of Company</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>4.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>No Solicitation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>26</FONT></TD>
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<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="92%" COLSPAN=4><FONT SIZE=2>&nbsp;<BR>
ARTICLE V ADDITIONAL AGREEMENTS</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;<BR>
27</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Proxy Statement/Prospectus; Registration Statement</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>27</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Meeting of Stockholders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>27</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Access to Information</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>28</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Confidentiality</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>28</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.5</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Public Disclosure</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>28</FONT></TD>
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<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Consents; Cooperation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>29</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Legal Requirements</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>29</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.8</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Blue Sky Laws</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.9</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Employee Benefit Plans</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.10</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Forms S-3 and S-8</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.11</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Option Agreement</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.12</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Nasdaq Quotation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.13</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Employees</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.14</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Action Under Stock Option Plan</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.15</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Notice to Certain Employees</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.16</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Indemnification</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.17</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Tax Treatment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>33</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.18</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Stockholder Litigation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Section 280G/83(b) Agreement</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.20</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Spreadsheet</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.21</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Execution of Stockholder Agreement by NEC</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.22</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Termination of Company ESPP</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.23</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Resolution of Certain Litigation Matters</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>5.24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Best Efforts and Further Assurances</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="92%" COLSPAN=4><FONT SIZE=2>&nbsp;<BR>
ARTICLE VI CONDITIONS TO THE MERGER</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;<BR>
34</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>6.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Conditions to Obligations of Each Party to Effect the Merger</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>6.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Additional Conditions to Obligations of Company</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>35</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>6.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Additional Conditions to the Obligations of Parent and Merger Sub</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>36</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>ii</FONT></P>

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="9%" COLSPAN=2><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="92%" COLSPAN=4><FONT SIZE=2>&nbsp;<BR>
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;<BR>
37</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>7.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Termination</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>37</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>7.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Effect of Termination</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>38</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>7.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Expenses and Termination Fees</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>39</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>7.4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Amendment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>41</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>7.5</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Extension; Waiver</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>41</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="92%" COLSPAN=4><FONT SIZE=2>&nbsp;<BR>
ARTICLE VIII GENERAL PROVISIONS</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;<BR>
41</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>8.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Non-Survival at Effective Time</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>41</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>8.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Notices</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>41</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>8.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Interpretation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>42</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>8.4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Counterparts</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>42</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>8.5</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Entire Agreement; Nonassignability; Parties in Interest</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>42</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>8.6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Severability</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>42</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>8.7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Remedies Cumulative</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>8.8</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Governing Law</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>8.9</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="82%"><FONT SIZE=2>Rules of Construction</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>iii</FONT></P>

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<P><FONT SIZE=2>
SCHEDULES </FONT></P>

<P><FONT SIZE=2>Company
Disclosure Schedule </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.0&#151;Revenue
Levels </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.1&#151;Organization,
Standing and Power </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.2&#151;Capital
Structure </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.3&#151;Authority
</FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.4&#151;SEC
Documents; Financial Statements </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.5&#151;Absence
of Certain Changes </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.6&#151;Absence
of Undisclosed Liabilities </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.7&#151;Litigation
</FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.9&#151;Governmental
Authorization </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.10&#151;Company
Real Property </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.11&#151;Intellectual
Property </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.13&#151;Taxes
</FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.14(a)&#151;Employee
Benefit Plans </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.14(d)&#151;COBRA/Family
Act Obligations </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.14(e)&#151;Certain
Benefit Payments Affected by the Merger </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.14(i)&#151;Company
Foreign Plans </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.14(j)&#151;List
of Employees on Disability/Other Leave </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.15&#151;Certain
Agreements </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.16&#151;Employee
Matters </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.18&#151;Insurance
</FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.19&#151;Compliance
with Law </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.22&#151;Broker's
and Finder's Fees </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.27&#151;Signatories
to Stockholder Agreement </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;2.33&#151;Year
2000 </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;4.2(h)&#151;Dispositions
</FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;5.9(a)&#151;Outstanding
Options </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;5.9(b)&#151;Options
Subject to Acceleration </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;5.9(d)&#151;Disqualified
Persons </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;5.9(f)&#151;Acceleration
Waivers </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;5.10(a)&#151;S-8
Eligible Optionees </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;5.10(b)&#151;S-3
Eligible Optionees </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>iv</FONT></P>

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<P><FONT SIZE=2>
Schedule&nbsp;5.13&#151;Cisco Employees </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;5.15&#151;Transferred
Employees </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;5.15(a)&#151;Key
Newco Employees </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;5.15(b)&#151;Newco
Employees </FONT></P>


<P><FONT SIZE=2>Schedule&nbsp;6.3(c)&#151;Material
Third Party Consents </FONT></P>

<P><FONT SIZE=2>Schedule&nbsp;6.3(r)&#151;Non-terminated
Consultants and Independent Contractors </FONT></P>

<P><FONT SIZE=2>Parent
Disclosure Schedule </FONT></P>

<P><FONT SIZE=2>EXHIBITS </FONT></P>

<P><FONT SIZE=2>Exhibit&nbsp;A&#151;Stock
Option Agreement </FONT></P>

<P><FONT SIZE=2>Exhibit&nbsp;B&#151;Stockholder
Agreement </FONT></P>

<P><FONT SIZE=2>Exhibit&nbsp;C&#151;Asset
Purchase Agreement </FONT></P>

<P><FONT SIZE=2>Exhibit&nbsp;D&#151;Articles
of Merger </FONT></P>

<P><FONT SIZE=2>Exhibit&nbsp;E&#151;Waivers
</FONT></P>


<P><FONT SIZE=2>Exhibit&nbsp;F&#151;Employment
Agreements </FONT></P>

<P><FONT SIZE=2>Exhibit&nbsp;G&#151;Notice
to Transferred Employees </FONT></P>

<P><FONT SIZE=2>Exhibit&nbsp;H&#151;280
G/83(b) Agreements </FONT></P>

<P><FONT SIZE=2>Exhibit&nbsp;I&#151;General
Release and Non-Competition Agreements </FONT></P>

<P><FONT SIZE=2>Exhibit&nbsp;J&#151;General
Release </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>v</FONT></P>

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<H2><FONT SIZE=2> </FONT></H2>
<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_agreement_and_plan_of_merger_and_reorganization"> </A></FONT> <FONT SIZE=2><B>AGREEMENT AND PLAN OF MERGER AND REORGANIZATION         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (the "Agreement") is made and entered into as of November&nbsp;9, 2000, by and among Cisco
Systems,&nbsp;Inc., a California corporation ("Parent"), Aqua Acquisition Corporation, a Delaware corporation ("Merger Sub") and wholly owned subsidiary of Parent, and Active Voice Corporation, a
Washington corporation ("Company"). </FONT></P>

<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_recitals"> </A></FONT> <FONT SIZE=2><B>RECITALS         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;The Boards of Directors of Company, Parent and Merger Sub believe it is in the best interests of their respective companies and the
stockholders of their respective companies that Company and Merger Sub combine into a single company through the statutory merger of Merger Sub with and into Company (the "Merger") and, in furtherance
thereof, have approved the Merger. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;Pursuant
to the Merger, among other things, the outstanding shares of Company Common Stock, no par value ("Company Common Stock"), shall be converted into shares of
Parent Common Stock, $0.001&nbsp;par value ("Parent Common Stock"), at the rate set forth herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;Company,
Parent and Merger Sub desire to make certain representations and warranties and other agreements in connection with the Merger. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;The
parties intend, by executing this Agreement, to adopt a plan of reorganization within the meaning of Section&nbsp;368 of the Internal Revenue Code of 1986, as
amended (the "Code"), and to cause the Merger to qualify as a reorganization under the provisions of Sections&nbsp;368 of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;Concurrently
with the execution of this Agreement and as an inducement to Parent and Merger Sub to enter into this Agreement, (a)&nbsp;Company and Parent have
entered into a stock option agreement dated the date hereof in the form attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> (the "Option Agreement") providing for the
purchase by Parent of newly-issued shares of Company Common Stock, and (b)&nbsp;certain stockholders of Company have on the date hereof entered into a stockholder agreement in the form attached
hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT SIZE=2> (the "Stockholder Agreement") to, among other things, vote the shares of Company Common Stock owned by such persons to
approve the Merger and against any competing proposals. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;Also,
concurrently with the execution of this Agreement, Company and Atlantis Group,&nbsp;Inc., a Washington corporation ("Newco"), have entered into an Asset
Purchase Agreement of even date herewith in the form attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;C</I></FONT><FONT SIZE=2> (the "Asset Purchase Agreement") which agreement provides for
the sale of certain of Company's assets to Newco and the assumption of certain of Company's obligations and liabilities by Newco. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the covenants and representations set forth herein, and for other good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows: </FONT></P>

<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_article_i_the_merger"> </A></FONT> <FONT SIZE=2><B>ARTICLE I<BR>  THE MERGER         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;The Merger.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;At the Effective Time (as defined in Section&nbsp;1.2) and subject to and upon the
terms and conditions of this Agreement, the Certificate of Merger and the Articles of Merger attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;D</I></FONT><FONT SIZE=2> and in accordance with
the applicable provisions of the Delaware General Corporation Law ("Delaware Law") and Washington Business Corporation Act ("Washington Law"), respectively, Merger Sub shall be merged with and into
Company, the separate corporate existence of Merger Sub shall cease and Company shall continue as the surviving corporation. Company as the surviving corporation after the Merger is hereinafter
sometimes referred to as the "Surviving Corporation." </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Closing; Effective Time.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The closing of the transactions contemplated hereby (the "Closing") shall
take place as soon as practicable after the satisfaction or waiver of each of the conditions set forth </FONT></P>

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<P><FONT SIZE=2>
in Article&nbsp;VI hereof or at such other time as the parties hereto agree (the "Closing Date"). The Closing shall take place at the offices of Brobeck, Phleger&nbsp;&amp; Harrison LLP, Two
Embarcadero Place, 2200 Geng Road, Palo Alto, California 94303, or at such other location as the parties hereto agree. In connection with the Closing, the parties hereto shall cause the Merger to be
consummated by filing the Certificate of Merger with the Secretary of State of the State of Delaware and the Articles of Merger with the Secretary of State of the State of Washington, in accordance
with the relevant provisions of Delaware Law and Washington Law (the time of the last such filing being the "Effective Time"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Effect of the Merger.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;At the Effective Time, the effect of the Merger shall be as provided in this
Agreement, the Certificate of Merger, the Articles of Merger and the applicable provisions of Delaware Law and Washington Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time, all the property, rights, privileges, powers and franchises of Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of Company and
Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Certificate of Incorporation; Bylaws.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;At
the Effective Time, the Articles of Incorporation of Company shall be amended so as to read in its entirety as set forth in </FONT> <FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> to the Articles of Merger and as so amended shall be the
Articles of Incorporation of the Surviving Corporation until thereafter
amended as provided by Washington Law and such Articles of Incorporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The
Bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Corporation until thereafter amended. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Directors and Officers.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;At the Effective Time, the directors of the Surviving Corporation shall be
those persons who were the directors of Merger Sub, in each case until their successors are elected or appointed and qualified or until their earlier resignation or removal. The officers of the
Surviving Corporation shall be the initial officers of Merger Sub, until their respective successors are duly elected or appointed and qualified or until their earlier resignation or removal. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Effect on Capital Stock.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;By virtue of the Merger and without any action on the part of Merger Sub,
Company or the holders of any of the following securities: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT
SIZE=2><I>Conversion of Company Common Stock.</I></FONT><FONT SIZE=2> At the Effective Time, each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares of Company Common Stock to be canceled pursuant to Section&nbsp;1.6(b)) will be canceled and extinguished and be converted
automatically into the right to receive shares of Parent Common Stock, all of which shall have been registered pursuant to Section&nbsp;5.1, based on the Exchange Ratio, subject to any adjustments
made pursuant to Section&nbsp;1.6(d). The Exchange Ratio shall equal the ratio of (x)&nbsp;a quotient, the numerator of which is $295,332,740 and the denominator of which is the Parent Stock Price
and (y)&nbsp;the total number of Company Common Stock issued and outstanding on a fully diluted basis at the Effective Time (after giving effect to the conversion, exchange or exercise as the case
may be of all
securities convertible into, or exercisable or exchangeable for, Company Common Stock, including all unexpired and unexercised options, warrants or other rights to acquire Company Common Stock). The
Parent Stock Price shall equal the average of the closing prices of Parent Common Stock as quoted on Nasdaq for the ten consecutive trading days ending on the third trading day prior to the Effective
Time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;</FONT><FONT
SIZE=2><I>Cancellation of Company Common Stock Owned by Parent or Company.</I></FONT><FONT SIZE=2> At the Effective Time, all shares of Company Common
Stock that are owned by Company as treasury stock and each share of Company Common Stock owned by Parent or any direct or indirect wholly owned subsidiary of Parent or of Company immediately prior to
the Effective Time shall be canceled and extinguished without any conversion thereof. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;</FONT><FONT SIZE=2><I>Company Stock Option Plans.</I></FONT><FONT SIZE=2> At the Effective Time, the Company Stock Option Plans (as defined below) and all options
to purchase Company Common Stock then outstanding under the Company Stock Option Plans and all obligations of Company under the Company ESPP (as defined below) shall be assumed by Parent in accordance
with Section&nbsp;5.9. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;</FONT><FONT
SIZE=2><I>Capital Stock of Merger Sub.</I></FONT><FONT SIZE=2> At the Effective Time, each share of common stock, $0.001&nbsp;par value, of Merger
Sub ("Merger Sub Common Stock") issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of
common stock of the Surviving Corporation, and the Surviving Corporation shall be a wholly owned subsidiary of Parent. Each stock certificate of Merger Sub evidencing ownership of any such shares
shall continue to evidence ownership of such shares of capital stock of the Surviving Corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;</FONT><FONT
SIZE=2><I>Adjustments to Exchange Ratio.</I></FONT><FONT SIZE=2> The Exchange Ratio shall be adjusted to reflect fully the effect of any stock split,
reverse split, stock dividend (including any dividend or distribution of securities convertible into Parent Common Stock or Company Common Stock), reorganization, recapitalization or other like change
with respect to Parent Common Stock or Company Common Stock occurring after the date hereof and prior to the Effective Time, so as to provide holders of Company Common Stock and Parent the same
economic effect as contemplated by this Agreement prior to such stock split, reverse split, stock dividend, reorganization, recapitalization or like change. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Fractional Shares.</I></FONT><FONT SIZE=2> No fraction of a share of Parent Common Stock will be issued, but in lieu thereof each holder of
shares of Company Common Stock who would otherwise be entitled to a fraction of a
share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock to be received by such holder) shall receive from Parent an amount of cash (rounded to the nearest whole
cent) equal to the product of (i)&nbsp;such fraction, multiplied by (ii)&nbsp;the Parent Stock Price. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Surrender of Certificates.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></P>

<UL>
<UL>
<DL compact>
<DT><FONT SIZE=2>(a)</FONT></DT><DD><FONT SIZE=2><I>Exchange Agent.</I></FONT><FONT SIZE=2> Parent's transfer agent shall act as exchange agent (the "Exchange Agent") in the Merger. </FONT></DD></DL>
</UL>
</UL>
<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;</FONT><FONT
SIZE=2><I>Parent to Provide Common Stock and Cash.</I></FONT><FONT SIZE=2> Promptly after the Effective Time, Parent shall make available to the
Exchange Agent for exchange in accordance with this Article&nbsp;I, through such reasonable procedures as Parent may adopt, (i)&nbsp;the shares of Parent Common Stock issuable pursuant to
Section&nbsp;1.6(a) in exchange for shares of Company Common Stock outstanding immediately prior to the Effective Time (provided that delivery of any shares that are subject to vesting and/or
repurchase rights or other restrictions shall be in book entry form until such vesting and/or repurchase rights or other restrictions lapse) and (ii)&nbsp;cash in an amount sufficient to permit
payment of cash in lieu of fractional shares pursuant to Section&nbsp;1.6(e). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;</FONT><FONT
SIZE=2><I>Exchange Procedures.</I></FONT><FONT SIZE=2> Promptly after the Effective Time, the Surviving Corporation shall cause to be mailed to each
holder of record of a certificate or certificates (the "Certificates") which immediately prior to the Effective Time represented outstanding shares of Company Common Stock, whose shares were converted
into the right to receive shares of Parent Common Stock (and cash in lieu of fractional shares) pursuant to Section&nbsp;1.6, (i)&nbsp;a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass, only upon receipt of the Certificates by the Exchange Agent, and shall be in such form and have such other provisions as
Parent may reasonably specify) and (ii)&nbsp;instructions for use in effecting the surrender of the Certificates in exchange for certificates (or book entries in the case of shares that are subject
to vesting and/or </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>
repurchase rights or other restrictions) representing shares of Parent Common Stock (and cash in lieu of fractional shares). Upon surrender of a Certificate for cancellation to the Exchange 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 in accordance with the instructions thereto, the holder of
such Certificate shall be entitled to receive in exchange therefor a certificate (or book entry in the case of shares that are subject to vesting and/or repurchase rights or other restrictions)
representing the number of whole shares of Parent Common Stock and payment in lieu of fractional shares which such holder has the right to receive pursuant to Section&nbsp;1.6, and the Certificate
so surrendered shall
forthwith be canceled. Until so surrendered, each outstanding Certificate that, prior to the Effective Time, represented shares of Company Common Stock will be deemed from and after the Effective
Time, for all corporate purposes, other than the payment of dividends, to evidence the ownership of the number of full shares of Parent Common Stock into which such shares of Company Common Stock
shall have been so converted and the right to receive an amount in cash in lieu of the issuance of any fractional shares in accordance with Section&nbsp;1.6. Notwithstanding any other provision of
this Agreement, no interest will be paid or will accrue on any cash payable to holders of Certificates pursuant to the provisions of this Article&nbsp;I. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;</FONT><FONT
SIZE=2><I>Distributions With Respect to Unexchanged Shares.</I></FONT><FONT SIZE=2> No dividends or other distributions with respect to Parent Common
Stock with a record date after the Effective Time will be paid to the holder of any unsurrendered Certificate with respect to the shares of Parent Common Stock represented thereby until the holder of
record of such Certificate shall surrender such Certificate. Subject to applicable law, following surrender of any such Certificate, there shall be paid to the record holder of the certificates
representing whole shares of Parent Common Stock issued in exchange therefor, without interest, at the time of such surrender, the amount of any such dividends or other distributions with a record
date after the Effective Time theretofore payable (but for the provisions of this Section&nbsp;1.7(d)) with respect to such shares of Parent Common Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;</FONT><FONT
SIZE=2><I>Transfers of Ownership.</I></FONT><FONT SIZE=2> If any certificate for shares of Parent Common Stock is to be issued in a name other than
that in which the Certificate surrendered in exchange therefor is registered, it will be a condition of the issuance thereof that the Certificate so surrendered will be properly endorsed and otherwise
in proper form for transfer and that the person requesting such exchange will have paid to Parent or any agent designated by it any transfer or other taxes required by reason of the issuance of a
certificate for shares of Parent Common Stock in any name other than that of the registered holder of the Certificate surrendered, or established to the satisfaction of Parent or any agent designated
by it that such tax has been paid or is not payable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>No Liability.</I></FONT><FONT SIZE=2> Notwithstanding anything to the contrary in this Section&nbsp;1.7, none of the Exchange Agent, the
Surviving Corporation, Parent or any party hereto shall be liable to any person for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;No Further Ownership Rights in Company Common Stock.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;All shares of Parent Common Stock issued upon
the surrender for exchange of shares of Company Common Stock in accordance with the terms hereof (including any cash paid in lieu of fractional shares) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common Stock, and there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Company
Common Stock which were outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article&nbsp;I. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;1.9</FONT><FONT SIZE=2><I>&nbsp;&nbsp;Lost, Stolen or Destroyed Certificates.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;In the event any Certificates shall have been lost, stolen
or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, such shares of Parent
Common Stock (and cash in lieu of fractional shares) as may be required pursuant to Section&nbsp;1.6; provided, however, that Parent may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed Certificates to deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the Certificates alleged to have been lost, stolen or destroyed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.10</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Tax Consequences.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;It is intended by the parties hereto that the Merger shall constitute a
reorganization within the meaning of Section&nbsp;368 of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.11</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Withholding Rights.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Parent and the Surviving Corporation shall be entitled to deduct and withhold
from the number of shares of Parent Common Stock otherwise deliverable under this Agreement, and from any other payments made pursuant to this Agreement, such amounts as Parent and the Surviving
Corporation are required to deduct and withhold with respect to such delivery and payment under the Code or any provision of state, local, provincial or foreign tax law. To the extent that amounts are
so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been delivered and paid to the holder of shares of Company Common Stock in respect of which such
deduction and withholding was made by Parent and the Surviving Corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.12</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Termination of Exchange Agent Funding.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Any portion of funds (including any interest earned
thereon) or certificates for shares of Parent Common Stock held by the Exchange Agent which have not been delivered to holders of Certificates pursuant to this Article&nbsp;I within six months after
the Effective Time shall promptly be paid or delivered, as appropriate, to Parent, and thereafter holders of Certificates who have not theretofore complied with the exchange procedures set forth in
and contemplated by Section&nbsp;1.7 shall thereafter look only to Parent (subject to abandoned property, escheat and similar laws) for their claim for shares of Parent Common Stock and, only as
general creditors thereof, any cash in lieu of fractional shares of Parent Common Stock and any dividends or distributions (with a record date after the Effective Time) with respect to Parent Common
Stock to which they are entitled. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.13</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Taking of Necessary Action; Further Action.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;If, at any time after the Effective Time, any further
action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges,
powers and franchises of Company and Merger Sub, the officers and directors of Company and Merger Sub are fully authorized in the name of their respective corporations or otherwise to take, and will
take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement. </FONT></P>

<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_article_ii_representations_and_warranties_of_company"> </A></FONT> <FONT SIZE=2><B>ARTICLE II<BR>  REPRESENTATIONS AND WARRANTIES OF COMPANY         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In this Agreement, any reference to any event, change, condition or effect being "material" with respect to any person means any material event, change,
condition or effect related to the condition (financial or otherwise), properties, assets (including intangible assets), liabilities, business, operations or results of operations of such person and
its subsidiaries, taken as a whole. In this Agreement, any reference to a "Material Adverse Effect" with respect to any person means any event, change or effect that is materially adverse to the
condition (financial or otherwise), properties, assets, liabilities, business, operations or results of operations of such person and its subsidiaries, taken as a whole, provided, however, that a
"Material Adverse Effect" with respect to Company shall not include the following (collectively, "Non-Controllable Events"): (i)&nbsp;general changes in the telecommunications </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>
industry or economic conditions that affect Company and its subsidiaries, taken as a whole, substantially proportionately relative to the Parent and its subsidiaries, taken as a whole or (ii)&nbsp;a
decline in the revenues of Company following the date of this Agreement which is attributable to a delay of, reduction in or cancellation or change in the purchase orders by customers of Company
arising as a result of the execution or announcement of this Agreement (provided that revenues do not decline below the amounts set forth in </FONT> <FONT SIZE=2><I>Schedule&nbsp;2.0</I></FONT><FONT SIZE=2>). A decline of revenues below such levels
shall be deemed to be a Material Adverse Effect on Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In
this Agreement, any reference to a party's "knowledge" means such party's actual knowledge after reasonable inquiry of officers, directors and other employees of such party charged
with senior administrative or operational responsibility for such matters. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except
as disclosed in that section of the document of even date herewith delivered by Company to Parent prior to the execution and delivery of this Agreement (the "Company Disclosure
Schedule")
corresponding to the Section of this Agreement to which any of the following representations and warranties specifically relate or as disclosed in another section of the Company Disclosure Schedule if
it is reasonably apparent from the nature of the disclosure that it is applicable to another Section of this Agreement, Company represents and warrants to Parent and Merger Sub as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Organization, Standing and Power.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Each of Company and its subsidiaries is a corporation duly
organized, validly existing and no articles of dissolution have been filed under the laws of its jurisdiction of organization. Each of Company and its subsidiaries has the corporate power to own its
properties and to carry on its business as now being conducted and as presently proposed to be conducted and is duly authorized and qualified to do business and is in good standing in each
jurisdiction in which the failure to be so qualified and in good standing would have a Material Adverse Effect on Company. Company has delivered to Parent a true and correct copy of the Amended and
Restated Articles of Incorporation, as amended (the "Articles of Incorporation"), and the Amended and Restated Bylaws, as amended, or other charter documents, as applicable, of Company and each of its
subsidiaries, each as amended to date. Neither Company nor any of its subsidiaries is in violation of any of the provisions of its respective charter or bylaws or equivalent organization documents.
Company is the owner of all outstanding shares of capital stock of each of its subsidiaries and all such shares are duly authorized, validly issued, fully paid and nonassessable. All of the
outstanding shares of capital stock of each such subsidiary are owned by Company free and clear of all liens, charges, claims or encumbrances or rights of others. There are no outstanding
subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements of any character relating to the issued or unissued capital stock or
other securities of any such subsidiary, or otherwise obligating Company or any such subsidiary to issue, transfer, sell, purchase, redeem or otherwise acquire any such securities. Except as disclosed
in the Company SEC Documents (as defined in Section&nbsp;2.4), Company does not directly or indirectly own any equity or similar interest in, or any interest convertible or exchangeable or
exercisable for, any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Capital Structure.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The authorized capital stock of Company consists of 60,000,000&nbsp;shares of
Common Stock, no par value, and 2,000,000&nbsp;shares of Preferred Stock, no par value, of which there were issued and outstanding as of the close of business on November&nbsp;9, 2000,
11,436,453&nbsp;shares of Common Stock and no shares of Preferred Stock. There are no other outstanding shares of capital stock or voting securities and no outstanding commitments to issue any
shares of capital stock or voting securities after November&nbsp;9, 2000, other than pursuant to the Option Agreement, the exercise of options outstanding as of such date under the Company's 2000
Stock Option Plan, 1998 Stock Option Plan, 1996 Stock Option Plan, 1993 Stock Option Plan, 1988 Non-qualified Stock Option Plan and 2000 Director Stock Option Plan, 1997 Director Stock
Option Plan, Directors Stock Option Plan and non-plan stock option grant to each of Tom Alberg and Martin Richmond (collectively, the "Company Stock Option Plans") or pursuant to the
Company Employee Stock Purchase Plan (the "Company </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P><FONT SIZE=2>
ESPP"). All outstanding shares of Company Common Stock are duly authorized, validly issued, fully paid and non-assessable and are free of any liens or encumbrances other than any liens or
encumbrances created by or imposed upon the holders thereof, and are not subject to preemptive rights or rights of first refusal created by statute, the Articles of Incorporation or Bylaws of Company
or any agreement to which Company is a party or by which it is bound. As of the close of business on November&nbsp;9, 2000, Company has reserved (i)&nbsp;6,432,330&nbsp;shares of Common Stock
for issuance to employees, consultants and directors pursuant to the Company Stock Option Plans, of which 1,920,506&nbsp;shares have been issued pursuant to option exercises or direct stock
purchases, 3,330,184&nbsp;shares are subject to outstanding, unexercised options, no shares are subject to outstanding stock purchase rights, and 1,181,640&nbsp;shares are available for issuance
thereunder and (ii)&nbsp;700,000&nbsp;shares of Common Stock for issuance to employees pursuant to the Company ESPP, of which no shares have been issued. Since November&nbsp;8, 2000, Company has
not (i)&nbsp;issued or granted additional options under the Company Stock Option Plans, or (ii)&nbsp;accepted enrollments in the Company ESPP. Except for (i)&nbsp;the rights created pursuant to
this Agreement, the Option Agreement, the Company Stock Option Plans and the Company ESPP and (ii)&nbsp;the Company's rights to repurchase any unvested shares under the Company Stock Option Plans or
the stock option agreements thereunder, there are no other options, warrants, calls, rights, commitments or agreements of any character to which Company is a party or by which it is bound obligating
Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of capital stock of Company or obligating Company to grant, extend,
accelerate the vesting and/or repurchase rights of, change the price of, or otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. There are no contracts,
commitments or agreements relating to voting, purchase or sale of Company's capital stock (i)&nbsp;between or among Company and any of its stockholders and (ii)&nbsp;to the best of Company's
knowledge, between or among any of Company's stockholders. The terms of the Company Stock Option Plans permit the assumption or substitution of options to purchase Parent Common Stock as provided in
this Agreement, without the consent or approval of the holders of such securities, stockholders, or otherwise. The current "Payment Period" (as defined in the Company ESPP) commenced under the Company
ESPP on October&nbsp;1, 2000, and will end on the earlier of the day immediately prior to the Effective Time and December&nbsp;31, 2000, and except for the purchase rights granted on such
commencement date to participants in the current Payment Period, there are no other purchase rights or options outstanding under the Company ESPP. True and complete copies of all agreements and
instruments relating to or issued under the Company Stock Option Plans or Company ESPP have been made available to Parent and such agreements and instruments have not been amended, modified or
supplemented, and there are no agreements to amend, modify or supplement such agreements or instruments in any case from the form made available to Parent. The shares of Company Common Stock issued
under the Company Stock Option Plans, as amended and under all prior versions thereof, have either been registered under the Securities Act or were issued in transactions which qualified for
exemptions under, either Section&nbsp;4(2) of, or Rule&nbsp;701 under, the Securities Act for stock issuances under compensatory benefit plans. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Authority.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company has all requisite corporate power and authority to enter into this Agreement,
the Asset Purchase Agreement and the Option Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement, the Asset Purchase Agreement and
the Option Agreement and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Company,
subject only to the adoption of this Agreement by Company's stockholders holding a majority of the outstanding shares of Company Common Stock as contemplated by Section&nbsp;6.1(a). Each of this
Agreement, the Asset Purchase Agreement and the Option Agreement has been duly executed and delivered by Company and constitutes the valid and binding obligation of Company enforceable against Company
in accordance with its terms, except as enforceability may be limited by bankruptcy and other laws affecting the rights and remedies of creditors generally and general principles of equity. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<P><FONT SIZE=2>
The execution and delivery of this Agreement, the Asset Purchase Agreement and the Option Agreement by Company does not, and the consummation of the transactions contemplated hereby will not, conflict
with, or result in any violation of, or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss
of any benefit under (i)&nbsp;any provision of the Articles of Incorporation or Bylaws of Company or any of its subsidiaries, as amended, or (ii)&nbsp;any material mortgage, indenture, lease,
contract or other agreement or instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Company or any of its subsidiaries
or any of their properties or assets. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental
authority or instrumentality ("Governmental Entity") is required by or with respect to Company or any of its subsidiaries in connection with the execution and delivery of this Agreement, the Asset
Purchase Agreement, the Option Agreement, or the consummation of the transactions contemplated hereby and thereby, except for (i)&nbsp;the filing of the Certificate of Merger and Articles of Merger
as provided in Section&nbsp;1.2; (ii)&nbsp;the filing with the Securities and Exchange Commission (the "SEC") and the National Association of Securities Dealers,&nbsp;Inc. (the "NASD") of the
Proxy Statement (as defined in Section&nbsp;2.23) relating to the Company Stockholders Meeting (as defined in Section&nbsp;2.23); (iii)&nbsp;such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable state securities laws and the securities laws of any foreign country; (iv)&nbsp;such filings as may be required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR"); (v)&nbsp;the filing of a Form&nbsp;S-4 Registration Statement with the SEC in accordance with the
Securities Act of 1933, as amended; (vi)&nbsp;the filing of a Current Report on Form&nbsp;8-K with the SEC; and (vii)&nbsp;such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse Effect on Company and would not prevent, or materially alter or delay any of the transactions contemplated by this
Agreement, the Asset Purchase Agreement or the Option Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;SEC Documents; Financial Statements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company has made available to Parent a true and complete copy
of each statement, report, registration statement (with the prospectus in the form filed pursuant to Rule&nbsp;424(b) of the Securities Act of 1933, as amended (the "Securities Act")), definitive
proxy statement and other filings made with the SEC by Company since October&nbsp;29, 1995, and, prior to the Effective Time, Company will have furnished to Parent true and complete copies of any
additional documents filed with the SEC by Company prior to the Effective Time (collectively, the "Company SEC Documents"). Company has timely filed all forms, statements and documents required to be
filed by it with the SEC and The Nasdaq National Market since October&nbsp;29, 1995. In addition, Company has
made available to Parent all exhibits to the Company SEC Documents filed prior to the date hereof, and will promptly make available to Parent all exhibits to any additional Company SEC Documents filed
prior to the Effective Time. All documents required to be filed as exhibits to the Company SEC Documents have been so filed, and all material contracts so filed as exhibits are in full force and
effect, except those which have expired in accordance with their terms, and neither Company nor any of its subsidiaries is in material default thereunder. As of their respective filing dates, the
Company SEC Documents complied in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Securities Act, and none of the Company
SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading, except to the extent corrected by a subsequently filed Company SEC Document. The financial statements of Company, including the notes thereto,
included in the Company SEC Documents (the "Company Financial Statements") were complete and correct in all material respects as of their respective dates, complied as to form in all material respects
with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto as of their respective dates, and have been prepared in accordance </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<P><FONT SIZE=2>
with United States generally accepted accounting principles ("GAAP") applied on a basis consistent throughout the periods indicated and consistent with each other (except as may be indicated in the
notes thereto or, in the case of unaudited statements included in Quarterly Reports on Form&nbsp;10-Q, as permitted by Form&nbsp;10-Q of the SEC). The Company Financial
Statements fairly present the consolidated financial condition and operating results of Company and its subsidiaries at the dates and during the periods indicated therein (subject, in the case of
unaudited statements, to normal, recurring year-end adjustments). There has been no change in Company accounting policies since June&nbsp;30, 2000, except as described in the notes to
the Company Financial Statements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Absence of Certain Changes.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Since June&nbsp;30, 2000, (the "Company Balance Sheet Date"), Company
has conducted its business in the ordinary course consistent with past practice and, other than the execution and delivery of the Asset Purchase Agreement and the performance of the transactions
contemplated thereby, there has not occurred: (i)&nbsp;any change, event or condition (whether or not covered by insurance) that has resulted in, or is reasonably likely to result in, or to the best
of Company's knowledge any event beyond Company's control that is reasonably likely to result in, a Material Adverse Effect to Company; (ii)&nbsp;any acquisition, sale or transfer of any material
asset of Company or any of its subsidiaries other than in the ordinary course of business and consistent with past practice; (iii)&nbsp;any change in accounting methods or practices (including any
change in depreciation or amortization policies or rates) by Company or any revaluation by Company of any of its or any of its subsidiaries' assets; (iv)&nbsp;any declaration, setting aside, or
payment of a dividend or other distribution with respect to the shares of Company, or any direct or indirect redemption, purchase or other acquisition by Company of any of its shares of capital stock;
(v)&nbsp;any material contract entered into by Company or any of its subsidiaries, other than in the ordinary course of business and as provided to Parent, or any material amendment or termination
of, or default under, any material contract to which Company or any of its subsidiaries is a party or by which it is bound; (vi)&nbsp;any amendment or change to
the Articles of Incorporation or Bylaws; or (vii)&nbsp;any increase in or modification of the compensation or benefits payable, or to become payable, by Company to any of its directors or employees,
other than pursuant to scheduled annual performance reviews, provided that any resulting modifications are in the ordinary course of business and consistent with Company's past practices. Company has
not agreed since June&nbsp;30, 2000 to do any of the things described in the preceding clauses (i)&nbsp;through (vii)&nbsp;and is not currently involved in any negotiations to do any of the
things described in the preceding clauses (i)&nbsp;through (vii)&nbsp;(other than negotiations with Parent and its representatives regarding the transactions contemplated by this Agreement). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Absence of Undisclosed Liabilities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company has no material obligations or liabilities of any
nature (matured or unmatured, fixed or contingent) other than (i)&nbsp;those set forth or adequately provided for in the Balance Sheet included in Company's Quarterly Report on
Form&nbsp;10-Q for the fiscal quarter ended June&nbsp;30, 2000 (the "Company Balance Sheet"), (ii)&nbsp;those incurred in the ordinary course of business and not required to be set
forth in the Company Balance Sheet under GAAP, (iii)&nbsp;those incurred in the ordinary course of business since the Company Balance Sheet Date and not reasonably likely to have a Material Adverse
Effect on Company; and (iv)&nbsp;those incurred in connection with the execution of this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Litigation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;There is no private or governmental action, suit, proceeding, claim, arbitration or
investigation pending before any agency, court or tribunal, foreign or domestic, or, to the knowledge of Company or any of its subsidiaries, threatened against Company or any of its subsidiaries or
any of their respective properties or any of their respective officers or directors (in their capacities as such) that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Company. There is no judgment, decree or order against Company or any of its subsidiaries, or, to the knowledge of Company and its subsidiaries, any of their respective
directors or officers (in their capacities as such), that would prevent, enjoin, alter or materially delay any of the transactions contemplated by this Agreement, or that could reasonably be expected
to have a Material Adverse </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<P><FONT SIZE=2>
Effect on Company. </FONT><FONT SIZE=2><I>Schedule&nbsp;2.7</I></FONT><FONT SIZE=2> lists all actions, suits, proceedings, claims, arbitrations and investigations pending before any agency, court
or tribunal that involve Company or any of its subsidiaries. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Restrictions on Business Activities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;There is no agreement, judgment, injunction, order or decree
binding upon Company or any of its subsidiaries which has or reasonably could be expected to have the effect of prohibiting or materially impairing any business practice of Company or any of its
subsidiaries, any acquisition of property by Company or any of its subsidiaries or the conduct of business by Company or any of its subsidiaries. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Governmental Authorization.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company and each of its subsidiaries have obtained each federal, state,
county, local or foreign governmental consent, license, permit, grant, or other authorization of a Governmental Entity (i)&nbsp;pursuant to which Company or any of its subsidiaries currently
operates or holds any interest in any of its properties or (ii)&nbsp;that is required for the operation of Company's or any of its subsidiaries' business or the holding of any such interest
((i)&nbsp;and (ii)&nbsp;herein collectively called "Company Authorizations"), and all of such Company Authorizations are in full force and effect, except where the failure to obtain or have any of
such Company Authorizations or where the failure of such Company Authorizations to be in full force and effect would not reasonably be expected to have a Material Adverse Effect on Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.10</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Title to Property.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company and its subsidiaries have good and valid title to all of their
respective properties, interests in properties and assets, real and personal, reflected in the Company Balance Sheet or acquired after the Company Balance Sheet Date (except properties, interests in
properties and assets sold or otherwise disposed of since the Company Balance Sheet Date in the ordinary course of business), or in the case of leased properties and assets, valid leasehold interests
in, free and clear of all mortgages, liens, pledges, charges or encumbrances of any kind or character, except (i)&nbsp;the lien of current taxes not yet due and payable, (ii)&nbsp;such
imperfections of title, liens and easements as do not and will not materially detract from or interfere with the use of the properties subject thereto or affected thereby, or otherwise materially
impair business operations involving such properties, (iii)&nbsp;liens securing debt which is reflected on the Company Balance Sheet, and (iv)&nbsp;liens that in the aggregate would not have a
Material Adverse Effect on Company. The plants, property and equipment of Company and its subsidiaries that are used in the operations of their businesses are in good operating condition and repair,
except where the failure to be in good operating condition or repair would not have a Material Adverse Effect. All properties used in the operations of Company and its subsidiaries are reflected in
the Company Balance Sheet to the extent generally accepted accounting principles require the same to be reflected. </FONT><FONT SIZE=2><I>Schedule&nbsp;2.10</I></FONT><FONT SIZE=2> identifies each
parcel of real property owned or leased by Company or any of its subsidiaries. No lease relating to a foreign parcel contains any extraordinary payment obligation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.11</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Intellectual Property.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Company
and its subsidiaries own, or are licensed or otherwise possess legally enforceable and unencumbered rights to use all patents, trademarks, trade names,
service marks, domain names, database rights, copyrights, and any applications therefor, maskworks, net lists, schematics, technology, know-how, trade secrets, inventory, ideas,
algorithms, processes, computer software programs or applications (in both source code, except in circumstances where Company only possesses a license to the object code form, and object code form),
and tangible or intangible proprietary information or material ("Intellectual Property") that are used in the business of Company and its subsidiaries. Company owns and possesses source code for all
software owned by Company and owns or has valid licenses and possesses source code for all products owned, distributed and presently supported by
Company. Company has not (i)&nbsp;licensed any of its Intellectual Property in source code form to any party or (ii)&nbsp;entered into any exclusive agreements relating to its Intellectual
Property. No </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<P><FONT SIZE=2>
royalties or other continuing payment obligations are due in respect of Third Party Intellectual Property Rights. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;</FONT><FONT
SIZE=2><I>Schedule&nbsp;2.11</I></FONT><FONT SIZE=2> lists (i)&nbsp;all patents and patent applications and all registered trademarks, trade names
and service marks, registered copyrights, and maskworks included in the Intellectual Property, including the jurisdictions in which each such Intellectual Property right has been issued or registered
or in which any application for such issuance and registration has been filed, (ii)&nbsp;all licenses, sublicenses and other agreements as to which Company is a party and pursuant to which any
person is authorized to use any Intellectual Property (except for non-material licenses entered into by Company in the ordinary course of business), and (iii)&nbsp;all licenses,
sublicenses and other agreements as to which Company is a party and pursuant to which Company is authorized to use any third party patents, trademarks or copyrights, including software ("Third Party
Intellectual Property Rights") which are incorporated in, are, or form&nbsp;a part of any Company product, other than commercially available, off-the-shelf software. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;There
is no unauthorized use, disclosure, infringement or misappropriation of any Intellectual Property rights of Company or any of its subsidiaries, or any
Intellectual Property right of any third party to the extent licensed by or through Company or any of its subsidiaries, by any third party, including any employee or former employee of Company or any
of its subsidiaries. Neither Company nor any of its subsidiaries has entered into any agreement to indemnify any other person against any charge of infringement of any Intellectual Property, other
than indemnification provisions contained in purchase orders, license agreements and distribution and other customer agreements arising in the ordinary course of business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Company
is not, nor will it be as a result of the execution and delivery of this Agreement or the performance of its obligations under this Agreement, in breach of
any license, sublicense or other agreement relating to the Intellectual Property or Third Party Intellectual Property Rights. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;All
patents, trademarks, service marks and copyrights held by Company are valid and subsisting. Company (i)&nbsp;has not been sued in any suit, action or
proceeding (or received any notice or, to Company's knowledge, threat) which involves a claim of infringement of any patents, trademarks, service marks, copyrights or violation of any trade secret or
other proprietary right of any third party and (ii)&nbsp;has not brought any action, suit or proceeding for infringement of Intellectual Property or breach of any license or agreement involving
Intellectual Property against any third party. The
manufacture, marketing, licensing or sale of Company's products does not infringe any patent, trademark, service mark, copyright, trade secret or other proprietary right of any third party. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;Company
has secured valid written assignments from all consultants and employees who contributed to the creation or development of Intellectual Property of the
rights to such contributions that Company does not already own by operation of law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;Company
has taken all reasonably necessary steps to protect and preserve the confidentiality of all Intellectual Property not otherwise protected by patents or
patent applications or copyright ("Confidential Information"). All use, disclosure or appropriation of Confidential Information owned by Company by or to a third party has been pursuant to the terms
of a written agreement between Company and such third party. All use, disclosure or appropriation of Confidential Information not owned by Company has been pursuant to the terms of a written agreement
between Company and the owner of such Confidential Information, or is otherwise lawful. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;There are no actions that must be taken by Company or any subsidiary within sixty (60)&nbsp;days of the Closing Date that, if not taken, will result in the loss
of any Intellectual Property, including the payment of any registration, maintenance or renewal fees or the filing of any responses to the U.S. Patent and Trademark Office actions, documents,
applications or certificates for the purposes of obtaining, maintaining, perfecting or preserving or renewing any Intellectual Property. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;Company
has not received any opinion of counsel that any third party patents apply to the Company's products. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.12</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Environmental Matters.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The
following terms shall be defined as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;"Environmental
and Safety Laws" shall mean any federal, state or local laws, ordinances, codes, regulations, rules, policies and orders that are intended to assure
the protection of the environment, or
that classify, regulate, call for the remediation of, require reporting with respect to, or list or define air, water, groundwater, solid waste, hazardous or toxic substances, materials, wastes,
pollutants or contaminants, or which are intended to assure the safety of employees, workers or other persons, including the public. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;"Hazardous
Materials" shall mean any toxic or hazardous substance, material or waste or any pollutant or contaminant, or infectious or radioactive substance or
material, including without limitation, those substances, materials and wastes defined in or regulated under any Environmental and Safety Laws. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;"Property"
shall mean all real property leased or owned by Company or its subsidiaries either currently or in the past. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;"Facilities"
shall mean all buildings and improvements on the Property. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Company
represents and warrants that, except in all cases as, in the aggregate, would not have a Material Adverse Effect on Company, as follows: (i)&nbsp;no
methylene chloride or asbestos is contained in or has been used at or released from the Facilities; (ii)&nbsp;all Hazardous Materials and wastes have been disposed of in accordance with all
Environmental and Safety Laws; (iii)&nbsp;Company and its subsidiaries have received no notice (verbal or written) of any noncompliance of the Facilities or its past or present operations with
Environmental and Safety Laws; (iv)&nbsp;no notices, administrative actions or suits are pending or, to Company's knowledge, threatened relating to a violation of any Environmental and Safety Laws;
(v)&nbsp;to Company's knowledge, neither Company nor its subsidiaries are a potentially responsible party under the federal Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA), or state analog statute, arising out of events occurring prior to the Closing Date; (vi)&nbsp;there have not been in the past, and are not now, any Hazardous Materials on, under or
migrating to or from the Facilities or Property; (vii)&nbsp;there have not been in the past, and are not now, any underground tanks or underground improvements at, on or under the Property including
without limitation, treatment or storage tanks, sumps, or water, gas or oil wells; (viii)&nbsp;there are no polychlorinated biphenyls (PCBs) deposited, stored, disposed of or located on the Property
or Facilities or any equipment on the Property containing PCBs at levels in excess of 50 parts per million; (ix)&nbsp;there is no formaldehyde on the Property or in the Facilities, nor any
insulating material containing urea formaldehyde in the Facilities; (x)&nbsp;the Facilities and Company's and its subsidiaries uses and activities therein have at all times complied with all
Environmental and Safety Laws; and (xi)&nbsp;Company and its subsidiaries have all the permits and licenses required to be issued under applicable Environmental and Safety Laws and are in full
compliance with the terms and conditions of those permits and licenses. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.13</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Taxes.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company and each of its subsidiaries, and any consolidated, combined, unitary or aggregate
group for Tax (as defined below) purposes of which Company or any of its subsidiaries is or has been a member, have properly completed and timely filed all Tax Returns required to be filed by them and
have paid all Taxes shown thereon to be due. All unpaid Taxes of Company and its subsidiaries for periods through June&nbsp;30, 2000 are reflected in the Company Balance Sheet. The Company has no
material liability for unpaid Taxes accruing after June&nbsp;30, 2000 other than Taxes arising in the ordinary course of its business subsequent to June&nbsp;30, 2000. There is (i)&nbsp;no
material claim for Taxes that is a lien against the property of Company or any of its subsidiaries or is being asserted against Company or any of its subsidiaries other than liens for Taxes not yet
due and payable; (ii)&nbsp;no audit of any Tax Return of Company or any of its subsidiaries that is being conducted by a Tax authority; (iii)&nbsp;no extension of the statute of limitations on the
assessment of any Taxes that has been granted by Company or any of its subsidiaries and that is currently in effect; and (iv)&nbsp;no agreement, contract or arrangement to which Company or any of
its subsidiaries is a party that may result in the payment of any amount that would not be deductible by reason of Sections 280G, 162 or 404 of the Code. Neither Company nor any of its subsidiaries
has been or will be required to include any material adjustment in Taxable income for any Tax period (or portion thereof) pursuant to Section&nbsp;481 or 263A of the Code or any comparable provision
under state or foreign Tax laws as a result of transactions, events or accounting methods employed prior to the Merger. Neither Company nor any of its subsidiaries has filed or will file any consent
to have the provisions of paragraph&nbsp;341(f)(2) of the Code (or comparable provisions of any state Tax laws) apply to Company or any of its subsidiaries. There are no Tax sharing or Tax
allocation agreements to which Company or any of its subsidiaries is a party or to which it or any of them is bound. Neither Company nor any of its subsidiaries has filed any disclosures under
Section&nbsp;6662 or comparable provisions of state, local or foreign law to prevent the imposition of penalties with respect to any Tax reporting position taken on any Tax Return. Except as set
forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;2.13</I></FONT><FONT SIZE=2>, neither Company nor any of its subsidiaries has ever been a member of a consolidated, combined or unitary group of which
Company was not the ultimate parent corporation. Company and each of its subsidiaries have in their possession receipts for any Taxes paid to foreign Tax authorities. For purposes of this Agreement,
the following terms have the following meanings: "Tax" (and, with correlative meaning, "Taxes" and "Taxable") means (i)&nbsp;any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or
windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional
amount imposed by any Governmental Entity (a "Tax authority") responsible for the imposition of any such tax (domestic or foreign); (ii)&nbsp;any liability for the payment of any amounts of the type
described in (i)&nbsp;as a result of being a member of an affiliated, consolidated, combined or unitary group for any Taxable period; and (iii)&nbsp;any liability for the payment of any amounts of
the type described in (i)&nbsp;or (ii)&nbsp;as a result of being a transferee of or successor to any person or as a result of any express or implied obligation to indemnify any other person,
including pursuant to any Tax sharing or Tax allocation agreement. As used herein, "Tax Return" shall mean any return, statement, report or form (including, without limitation estimated Tax returns
and reports, withholding Tax returns and reports and information reports and returns) required to be filed with respect to Taxes. Neither Company nor any of its subsidiaries has ever been a United
States real property holding corporation within the meaning of Section&nbsp;897 of the Code. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;2.14</FONT><FONT SIZE=2><I>&nbsp;&nbsp;Employee Benefit Plans.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT
SIZE=2><I>Schedule&nbsp;2.14(a)</I></FONT><FONT SIZE=2> lists, with respect to Company, any subsidiary of Company and any trade or business (whether
or not incorporated) which is treated as a single employer with Company (an "ERISA Affiliate") within the meaning of Section&nbsp;414(b), (c), (m)&nbsp;or (o)&nbsp;of the Code, (i)&nbsp;all
material employee benefit plans (as defined in Section&nbsp;3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") other than Foreign Plans (as defined below));
(ii)&nbsp;each loan to a non-officer employee in excess of $50,000, loans to officers and directors and any stock option, stock purchase, phantom stock, stock appreciation right,
supplemental retirement, severance, sabbatical, medical, dental, vision care, disability, employee relocation, cafeteria benefit (Code section&nbsp;125) or dependent care (Code Section&nbsp;129),
life insurance or accident insurance plans, programs or arrangements; (iii)&nbsp;all bonus, pension, profit sharing, savings, deferred compensation or incentive plans, programs or arrangements;
(iv)&nbsp;other fringe or employee benefit plans, programs or arrangements that apply to senior management of Company and that do not generally apply to all employees; and (v)&nbsp;any current or
former employment or executive compensation or severance agreements, written or otherwise, as to which unsatisfied obligations of Company of greater than $50,000 remain for the benefit of, or relating
to, any present or former employee, consultant or director of Company (together, the "Company Employee Plans"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Company
has furnished or made available to Parent a copy of each of the Company Employee Plans and related plan documents (including trust documents, insurance
policies or contracts, employee booklets, summary plan descriptions and other authorizing documents, and any material employee communications relating thereto) and has, with respect to each Company
Employee Plan which is subject to ERISA reporting requirements, provided copies of the Form&nbsp;5500 reports filed for the last three plan years. Any Company Employee Plan intended to be qualified
under Section&nbsp;401(a) of the Code has either obtained from the Internal Revenue Service a favorable determination letter as to its qualified status under the Code, including all amendments to
the Code effected by the Tax Reform Act of 1986 and subsequent legislation other than the Uruguay Round Agreements Act of 1994, the Uniformed Services Employment and Reemployment Rights Act of 1994,
the Small Business Job Protection Act of 1996, and the Taxpayer Relief Act of 1997, or has applied to the Internal Revenue Service for such a determination letter prior to the expiration of the
requisite period under applicable Treasury Regulations or Internal Revenue Service pronouncements in which to apply for such determination letter and to make any amendments necessary to obtain a
favorable determination. Company has also furnished Parent with the most recent Internal Revenue Service determination letter issued with respect to each such Company Employee Plan, and nothing has
occurred since the issuance of each such letter which would reasonably be expected to cause the loss of the tax-qualified status of any Company Employee Plan subject to Code
Section&nbsp;401(a). Company has also furnished Parent with
all registration statements and prospectuses prepared in connection with each Company Employee Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;None
of the Company Employee Plans (including but not limited to Foreign Plans) promises or provides retiree medical or other retiree welfare benefits to any
person, except as required by applicable law; (ii)&nbsp;there has been no "prohibited transaction," as such term is defined in Section&nbsp;406 of ERISA and Section&nbsp;4975 of the Code, with
respect to any Company Employee Plan, which would reasonably be expected to have, in the aggregate, a Material Adverse Effect on Company; (iii)&nbsp;each Company Employee Plan has been administered
in accordance with its terms and in compliance with the requirements prescribed by any and all statutes, rules and regulations (including ERISA and the Code), except as would not have, in the
aggregate, a Material Adverse Effect on Company, and Company and each subsidiary or ERISA Affiliate have performed in all material respects all obligations required to be </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<UL>
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<P><FONT SIZE=2>
performed by them under, are not in default in any material respect under or violation of, and have no knowledge of any material default or violation by any other party to, any of the Company Employee
Plans; (iv)&nbsp;neither Company nor any subsidiary or ERISA Affiliate is subject to any material liability or material penalty under Sections 4976 through 4980 of the Code or Title I of ERISA with
respect to any of the Company Employee Plans; (v)&nbsp;all material contributions required to be made by Company or any subsidiary or ERISA Affiliate to any Company Employee Plan have been made on
or before their due dates and a reasonable amount has been accrued for contributions to each Company Employee Plan for the current plan years; (vi)&nbsp;with respect to each Company Employee Plan,
no "reportable event" within the meaning of Section&nbsp;4043 of ERISA (excluding any such event for which the thirty (30)&nbsp;day notice requirement has been waived under the regulations to
Section&nbsp;4043 of ERISA) nor any event described in Section&nbsp;4062, 4063 or 4041 or ERISA has occurred; (vii)&nbsp;no Company Employee Plan is covered by, and neither Company nor any
subsidiary or ERISA Affiliate has incurred or expects to incur any liability under Title IV of ERISA or Section&nbsp;412 of the Code; and (viii)&nbsp;each Company Employee Plan can be amended,
terminated or otherwise discontinued after the Effective Time in accordance with its terms, without liability to Parent (other than for benefits accrued through the date of termination and ordinary
administrative expenses typically incurred in a termination event). With respect to each Company Employee Plan subject to ERISA as either an employee pension plan within the meaning of
Section&nbsp;3(2) of ERISA or an employee welfare benefit plan within the meaning of Section&nbsp;3(1) of ERISA, Company has prepared in good faith and timely filed all requisite governmental
reports (which were true and correct as of the date filed) and has properly and timely filed and distributed or posted all notices and reports to employees required to be filed, distributed or posted
with respect to each such Company Employee Plan, except where the failure to do so would not have a Material Adverse Effect. No suit, administrative proceeding, action or other litigation has been
brought, or to the knowledge of Company is threatened, against or with respect to any such Company Employee Plan, including any audit or inquiry by the IRS or United States Department of Labor. No
payment or benefit which will or may be made by Company to any employee will be characterized as an "excess parachute payment" within the meaning of Section&nbsp;280G(b)(1) of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;With
respect to each Company Employee Plan, Company and each of its United States subsidiaries have complied except to the extent that such failure to comply would
not, individually or in the aggregate, have a Material Adverse Effect on Company, with (i)&nbsp;the applicable health care continuation and notice provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA") and the regulations (including proposed regulations) thereunder, (ii)&nbsp;the applicable requirements of the Family Medical and Leave Act of 1993 and the
regulations thereunder, and (iii)&nbsp;the applicable requirements of the Health Insurance Portability and Accountability Act of 1996 and the regulations (including proposed regulations) thereunder. </FONT> <FONT SIZE=2><I>Schedule&nbsp;2.14(d)
</I></FONT><FONT SIZE=2> describes all obligations of the Company as of the date of this Agreement under any of the provisions of COBRA and the Family
and Medical Leave Act of 1993. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;The
consummation of the transactions contemplated by this Agreement will not (i)&nbsp;entitle any current or former employee or other service provider of Company,
any Company subsidiary or any other ERISA Affiliate to severance benefits or any other payment, except as expressly provided in this Agreement, or (ii)&nbsp;accelerate the time of payment or
vesting, or increase the amount of compensation due any such employee or service provider. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;There
has been no amendment to, written interpretation or announcement (whether or not written) by Company, any Company subsidiary or other ERISA Affiliate
relating to, or change in participation or coverage under, any Company Employee Plan which would </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

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<P><FONT SIZE=2>
materially increase the expense of maintaining such Plan above the level of expense incurred with respect to that Plan for the most recent fiscal quarter included in Company's financial statements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;Company
does not currently maintain, sponsor, participate in or contribute to, nor has it ever maintained, established, sponsored, participated in, or contributed
to, any pension plan (within the meaning of Section&nbsp;3(2) of ERISA) which is subject to Part&nbsp;3 of Subtitle B of Title&nbsp;I of ERISA, Title&nbsp;IV of ERISA or Section&nbsp;412 of
the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Neither
Company nor any Company subsidiary or other ERISA Affiliate is a party to, or has made any contribution to or otherwise incurred any obligation under, any
"multiemployer plan" as defined in Section&nbsp;3(37) of ERISA. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;With
regard to each compensation and benefit plan required to be maintained or contributed to by the law or applicable custom or rule of the relevant jurisdiction
outside of the United States (the "Foreign Plans"), (i)&nbsp;each of the Foreign Plans is listed in </FONT><FONT SIZE=2><I>Schedule&nbsp;2.14(i)</I></FONT><FONT SIZE=2> and is in material
compliance with the provisions of the laws of each jurisdiction in which each such Foreign Plan is maintained, to the extent those laws are applicable to the Foreign Plans; (ii)&nbsp;all material
contributions to, and material payments from, the Foreign Plans which may have been required to be made in accordance with the terms of any such Foreign Plan, and, when applicable, the law of the
jurisdiction in which such Foreign Plan is maintained, have been timely made or shall be made by the Closing Date, and all such contributions to the Foreign Plans, and all payments under the Foreign
Plans, for any period ending before the Closing Date that are not yet, but will be, required to be made, are reflected as an accrued liability on the Balance Sheet; (iii)&nbsp;Company, each Company
subsidiary and ERISA Affiliates have materially complied with all applicable reporting and notice requirements, and all of the Foreign Plans have obtained from the governmental body having
jurisdiction with respect to such plans any required determinations, if any, that such Foreign Plans are in compliance with the laws of the relevant jurisdiction if such determinations are required in
order to give effect to the Foreign Plan; (iv)&nbsp;each of the Foreign Plans has been administered in all material respects at all times in accordance with its terms and applicable law and
regulations; (v)to the knowledge of Company, there are no pending investigations by any governmental body involving the Foreign Plans, and no pending claims (except for claims for benefits payable in
the normal operation of the Foreign Plans), suits or proceedings against any Plan or asserting any rights or claims to benefits under any Foreign Plan; (vi)&nbsp;the consummation of the transactions
contemplated by this Agreement will not by itself create or otherwise result in any liability with respect to any Foreign Plan other than the triggering of payment to participants; and
(vii)&nbsp;the benefits available under any Foreign Plan in the aggregate do not provide substantially greater benefits to employees of Company or any of its subsidiaries participating in such plans
than the benefits available under Company Employee Plans for employees of Company in the United States. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Schedule&nbsp;2.14(j)</I></FONT><FONT SIZE=2> identifies each employee of any of the Company who is not fully available to perform work
because of disability or other leave and sets forth the basis of such disability or leave and the anticipated date of return to full service. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.15</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Certain Agreements Affected by the Merger.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Neither the execution and delivery of this Agreement
nor the consummation of the transaction contemplated hereby will (i)&nbsp;result in any payment (including, without limitation, severance, unemployment compensation, golden parachute, bonus or
otherwise) becoming due to any director or employee of Company or any of its subsidiaries, (ii)&nbsp;materially increase any benefits otherwise payable by Company or (iii)&nbsp;result in the
acceleration of the time of payment or vesting of any such benefits. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;2.16</FONT><FONT SIZE=2><I>&nbsp;&nbsp;Employee Matters.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Schedule&nbsp;2.16 contains a true, complete and accurate list (and, as
indicated below, description) of (i)&nbsp;the names and titles of all consultants, independent contractors, full-time, part-time or casual employees employed by the Company
or any of its subsidiaries (collectively, "Employees"), together with their status and location of their employment; (ii)&nbsp;the date each Employee was hired or retained; (iii)&nbsp;a list of
all written employment, consulting or service contracts between the Company or any of its subsidiaries and the Employees; (iv)&nbsp;the rate of annual remuneration of each Employee at the date
hereof, any bonuses paid since the end of the last completed financial year and all other bonuses, incentive schemes and benefits to which such Employee is entitled; (v)&nbsp;the amount of vacation
pay or number of weeks of vacation to which each Employee is entitled as of the date hereof; (vi)&nbsp;the names of all inactive Employees, the reason they are inactive Employees, whether they are
expected to return to work, and if so when, and the nature of any benefits to which such inactive Employees are entitled from the Company or any of its subsidiaries; and (vii)&nbsp;particulars of
all other material terms and conditions of employment or engagement of the Employees and the positions, title or classification held by them. Company and each of its subsidiaries are in compliance in
all respects with all currently applicable laws and regulations respecting employment, discrimination in employment, terms and conditions of employment, wages, hours and occupational safety and health
and employment practices, and are not engaged in any unfair labor practice, except where the failure to be in compliance or the engagement in such unfair labor practices would not have a Material
Adverse Effect on Company. Company has in all material respects withheld all amounts required by law or by agreement to be withheld from the wages, salaries, and other payments to employees; and is
not liable for any material arrears of wages or any material taxes or any material penalty for failure to comply with any of the foregoing. Company is not liable for any material payment to any trust
or other fund or to any governmental or administrative authority, with respect to unemployment compensation benefits, social security or other benefits or obligations for Employees (other than routine
payments to be made in the normal course of business and consistent with past practice). There are no pending claims against Company or any of its subsidiaries for any material amounts under any
workers compensation plan or policy or for long term disability. Neither Company nor any of its subsidiaries has any obligations under COBRA with respect to any former Employees or qualifying
beneficiaries thereunder, except for obligations that are not material in amount. To the knowledge of Company or any of its subsidiaries, there are no controversies pending or threatened, between
Company or any of its subsidiaries and any of their respective Employees, which controversies have or would reasonably be expected to result in an action, suit, proceeding, claim, arbitration or
investigation before any agency, court or tribunal, foreign or domestic. Neither Company nor any of its subsidiaries is a party to any collective bargaining agreement or other labor union contract nor
does Company nor any of its subsidiaries know of any activities or proceedings of any labor union to organize any such Employees. To Company's knowledge, no employees of Company or any of its
subsidiaries are in violation of any term of any employment contract, patent disclosure agreement, noncompetition agreement, or any restrictive covenant to a former employer relating to the right of
any such Employee to be employed by Company because of the nature of the business conducted or presently proposed to be conducted by Company or any of its subsidiaries or to the use of trade secrets
or proprietary information of others. No Employees of Company or any of its subsidiaries have given notice to Company, nor is Company otherwise aware, that any such Employee intends to terminate his
or her employment with Company or any subsidiary. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.17</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Interested Party Transactions.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Except as disclosed in the Company SEC Documents, neither Company
nor any of its subsidiaries is indebted to any director or officer of Company or any of its subsidiaries
(except for amounts due as normal salaries and bonuses and in reimbursement of ordinary expenses), and no such person is indebted to Company or any of its subsidiaries, and there are no other
transactions of the type required to be disclosed pursuant to Items&nbsp;402 or 404 of Regulation&nbsp;S-K under the Securities Act and the Exchange Act. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;2.18</FONT><FONT SIZE=2><I>&nbsp;&nbsp;Insurance.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company and each of its subsidiaries have policies of insurance and bonds of the type
and in amounts customarily carried by persons conducting businesses or owning assets similar to those of Company and its subsidiaries. There is no material claim pending under any of such policies or
bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds. All premiums due and payable under all such policies and bonds have been paid and
Company and its subsidiaries are otherwise in compliance in all material respects with the terms of such policies and bonds. Company has no knowledge of any threatened termination of, or material
premium increase with respect to, any of such policies. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.19</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Compliance With Laws.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Each of Company and its subsidiaries has complied with, are not in violation
of, and have not received any notices of violation with respect to, any federal, state, local or foreign statute, law or regulation with respect to the conduct of its business, or the ownership or
operation of its business, except for such violations or failures to comply as would not be reasonably expected to have a Material Adverse Effect on Company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.20</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Minute Books.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The minute books of Company and its subsidiaries made available to Parent contain a
complete and accurate summary of all meetings of directors and stockholders or actions by written consent since the time of incorporation of Company and the respective subsidiaries through the date of
this Agreement, and reflect all transactions referred to in such minutes accurately in all material respects. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.21</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Complete Copies of Materials.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company has delivered or made available true and complete copies of
each document that has been requested by Parent or its counsel in connection with their legal and accounting review of Company and its subsidiaries. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.22</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Brokers' and Finders' Fees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Except for payment obligations to William Blair&nbsp;&amp;
Company,&nbsp;L.L.C., whose fees and expenses will be paid in the manner contemplated by the Asset Purchase Agreement, Company has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or investment bankers' fees or any similar charges in connection with this
Agreement or any transaction contemplated hereby. Company has provided to Parent a true and correct copy of William Blair&nbsp;&amp; Company&nbsp;L.L.C.'s engagement letter with Company in connection
with the transactions contemplated hereby and by the Asset Purchase Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.23</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Registration Statement; Proxy Statement/Prospectus.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The information supplied by Company for
inclusion in the registration statement on Form&nbsp;S-4 (or such other or successor form as shall be appropriate) pursuant to which the shares of Parent Common Stock to be issued in the
Merger will be registered with the SEC (the "Registration Statement") shall not at the time the Registration Statement (including any amendments or supplements thereto) is declared effective by the
SEC 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 were made, not misleading. The information supplied by Company for inclusion in the proxy statement/prospectus to be sent to the stockholders of Company in connection with the meeting
of Company's stockholders to consider the Merger and the transactions contemplated by the Asset Purchase Agreement (the "Company Stockholders Meeting") (such proxy statement/prospectus as amended or
supplemented is referred to herein as the "Proxy Statement") shall not, on the date the Proxy Statement is first mailed to Company's stockholders, at the time of the Company Stockholders Meeting and
at the Effective Time, contain any statement which, at such time, is false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they are made, not false or misleading; or omit to state any material fact necessary to correct any statement in any earlier communication with
respect to the solicitation of proxies for the Company Stockholders Meeting which has become false or misleading. If at any time prior to the Effective Time any event or information should be
discovered by Company which should be set forth in an amendment to the Registration </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

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<P><FONT SIZE=2>
Statement or a supplement to the Proxy Statement, Company shall promptly inform Parent and Merger Sub. Notwithstanding the foregoing, Company makes no representation, warranty or covenant with respect
to any information supplied by Parent or Merger Sub or any other third party which is contained in any of the foregoing documents. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.24</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Opinion of Financial Advisor.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company has been advised in writing by its financial advisor,
William Blair&nbsp;&amp; Company, L.L.C., that in such advisor's opinion, as of the date hereof, the consideration to be received by the stockholders of Company is fair, from a financial point of view,
to the stockholders of Company, a signed copy of which opinion will be delivered to Parent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.25</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Vote Required.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The affirmative vote of the holders of at least a majority of the shares of Company
Common Stock outstanding on the record date set for the Company Stockholders Meeting is the only
vote of the holders of any of Company's capital stock necessary to approve this Agreement and the transactions contemplated hereby. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.26</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Board Approval.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The Board of Directors of Company has (i)&nbsp;approved this Agreement and the
Merger, (ii)&nbsp;determined that this Agreement and the Merger are advisable and in the best interests of the stockholders of Company and are on terms that are fair to such stockholders and
(iii)&nbsp;recommended that the stockholders of Company approve this Agreement and consummation of the Merger. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.27</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Stockholder Agreement; Irrevocable Proxies.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;All of the persons listed on </FONT> <FONT SIZE=2><I>Schedule&nbsp;2.27</I></FONT><FONT SIZE=2> have agreed in writing to vote for approval of the
Merger pursuant to a Stockholder Agreement, and pursuant to an Irrevocable Proxy
attached thereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;A.</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.28</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Chapter 23B.19 of the Washington Business Company Act Not Applicable.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The Board of Directors of
Company has taken all actions so that the restrictions contained in Chapter&nbsp;23B.19 of the Washington Law applicable to a "significant business transaction" (as defined in Chapter&nbsp;23B.19)
will not apply to the execution, delivery or performance of this Agreement, the Stockholder Agreement, the Asset Purchase Agreement or the Option Agreement or the consummation of the Merger or the
other transactions contemplated by this Agreement or by the Stockholder Agreement, the Asset Purchase Agreement or the Option Agreement. No other state takeover statute is applicable to the Merger,
the Merger Agreement, the Stockholder Agreement, the Asset Purchase Agreement, the Option Agreement or the transactions contemplated hereby or thereby. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.29</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Inventory.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The inventories of Company disclosed in the Company SEC Documents as of June&nbsp;30,
2000 and in any subsequently filed Company SEC Documents are stated consistently with the audited financial statements of Company and consist of items of a quantity usable or salable in the ordinary
course of business. Since June&nbsp;30, 2000, Company has continued to replenish inventories in a normal and customary manner consistent with past practices. Company has not received written or oral
notice that it will experience in the foreseeable future any difficulty in obtaining, in the desired quantity and quality and at a reasonable price and upon reasonable terms and conditions, the raw
materials, supplies or component products required for the manufacture, assembly or production of its products. The values at which inventories are carried reflect the inventory valuation policy of
Company, which is consistent with its past practice and in accordance with GAAP applied on a consistent basis. Since June&nbsp;30, 2000 due provision was made on the books of Company in the ordinary
course of business consistent with past practices to provide for all slow-moving, obsolete, or unusable inventories to their estimated useful or scrap values and such inventory reserves
are adequate to provide for such slow-moving, obsolete or unusable inventory and inventory shrinkage. As of the date hereof, Company had no inventory in the distribution channel and had no
commitments to purchase inventory (other than purchases of supplies in the ordinary course). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.30</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Accounts Receivable.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The accounts receivable disclosed in the Company SEC Documents as of
June&nbsp;30, 2000, and, with respect to accounts receivable created since such date, disclosed in any </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

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<P><FONT SIZE=2>
subsequently filed Company SEC Documents, or as accrued on the books of Company in the ordinary course of business consistent with past practices in accordance with GAAP since the last filed Company
SEC Documents, represent and will represent bona fide claims against debtors for sales and other charges, are not subject to discount except for normal cash and immaterial trade discount. The amount
carried for doubtful accounts and allowances disclosed in each of such Company SEC Document or accrued on such books is sufficient to provide for any losses that may be sustained on realization of the
receivables. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.31</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Customers and Suppliers.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;None of Company's customers which individually accounted for more than
10% of Company's gross revenues during the 12-month period preceding the date hereof has terminated any agreement with Company. As of the date hereof, no material supplier of Company has
indicated that it will stop, or decrease the rate of, supplying materials, products or services to Company. Company has not knowingly breached, so as to provide a benefit to Company that was not
intended by the parties, any agreement with, or engaged in any fraudulent conduct with respect to, any customer or supplier of Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.32</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Export Control Laws.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company has conducted its export transactions in accordance with applicable
provisions of United States export control laws and regulations, including but not limited to the Export Administration Act and implementing Export Administration Regulations, except for such
violations which would not have a Material Adverse Effect on Company. Without limiting the foregoing, Company represents and warrants that: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Company
has obtained all export licenses and other approvals required for its exports of products, software and technologies from the United States; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Company
is in compliance with the terms of all applicable export licenses or other approvals; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;There
are no pending or threatened claims against Company with respect to such export licenses or other approvals; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;There
are no actions, conditions or circumstances pertaining to Company's export transactions that may give rise to any future claims; and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;No
consents or approvals for the transfer of export licenses to Parent are required, or such consents and approvals can be obtained expeditiously without material
cost. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.33</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Year 2000.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company's current products and services are "Year&nbsp;2000 Compliant," where
"Year&nbsp;2000 Compliant" means that such products and services have been designed and tested so that, when used in accordance with their associated documentation, they are capable of accurately
processing, providing and/or receiving (i)&nbsp;date-related data from, into and between the Twentieth (20th) and Twenty-First (21st) centuries, or (ii)&nbsp;date-related
data in connection with any valid date in the Twentieth (20th) and Twenty-First (21st) centuries; provided that all other products and services used in combination in any way with Company's current
products and services properly exchange date-related data with them. The information technology systems and non-information technology systems used by Company in its internal
operations will function properly beyond 1999. Neither Company nor any of its subsidiaries has made any representations or warranties relating to the ability of any product or service of Company or
its subsidiaries to be Year 2000 Compliant. Company has made inquiries to its key third-party vendors and providers as to the status of their Year 2000 efforts, and has not uncovered any problems that
would aversely affect the operation of the products or that could disrupt or harm the day-to-day functioning of the business or operations of Company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.34</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Representations Complete.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;None of the representations or warranties made by Company herein or in
any Schedule hereto, including the Company Disclosure Schedule, or certificate furnished by Company pursuant to this Agreement, or the Company SEC Documents, when all such documents </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

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<P><FONT SIZE=2>
are read together in their entirety, contains or will contain at the Effective Time any untrue statement of a material fact, or omits or will omit at the Effective Time to state any material fact
necessary in order to make the statements contained herein or therein, in the light of the circumstances under which made, not misleading. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_article_iii_representations_an__art02730"> </A></FONT> <FONT SIZE=2><B>ARTICLE III<BR>  REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as disclosed in that section of the document of even date herewith delivered by Parent to Company prior to the execution and delivery of this Agreement
(the "Parent Disclosure Schedule") corresponding to the Section of this Agreement to which any of the following representations and warranties specifically relate or as disclosed in another section of
the Parent Disclosure Schedule if it is reasonably apparent on the face of the disclosure that it is applicable to another Section of this Agreement, Parent represents and warrants to Company as
follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Organization, Standing and Power.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Each of Parent and Merger Sub is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of organization. Each of Parent and Merger Sub has the corporate power to own its properties and to carry on its business as
now being conducted and as proposed to be conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the failure to be so qualified and in good standing would
have a Material Adverse Effect on Parent. Neither Parent nor Merger Sub is in violation of any of the provisions of its Articles of Incorporation or Bylaws or equivalent organizational documents. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Capital Structure.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The authorized capital stock of Parent consists of 20,000,000,000&nbsp;shares
of Common Stock, $0.001&nbsp;par value, and 5,000,000&nbsp;shares of Preferred Stock, no par value, of which there were issued and outstanding as of the close of business on September&nbsp;8,
2000, 7,122,688,341&nbsp;shares of Common Stock and no shares of Preferred Stock. The shares of Parent Common Stock to be issued pursuant to the Merger will be duly authorized, validly issued, fully
paid, and non-assessable, free of any liens or encumbrances imposed by Parent or Merger Sub. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Authority.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Parent and Merger Sub have all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and Merger Sub. This Agreement has been duly executed and delivered by Parent and Merger Sub and constitutes the valid and binding
obligations of Parent and Merger Sub. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a benefit under
(i)&nbsp;any provision of the Articles of Incorporation or Bylaws of Parent or any of its subsidiaries, as amended, or (ii)&nbsp;any material mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Parent or any of its subsidiaries or their
properties or assets, except where such conflict, violation, default, termination, cancellation or acceleration with respect to the foregoing provisions of (ii)&nbsp;would
not have had and would not reasonably be expected to have a Material Adverse Effect on Parent. No consent, approval, order or authorization of, or registration, declaration or filing with, any
Governmental Entity, is required by or with respect to Parent or any of its subsidiaries in connection with the execution and delivery of this Agreement by Parent and Merger Sub or the consummation by
Parent and Merger Sub of the transactions contemplated hereby, except for (i)&nbsp;the filing of the Certificate of Merger and Articles of Merger as provided in Section&nbsp;1.2; (ii)&nbsp;the
filing with the SEC and NASD of the Registration Statement; (iii)&nbsp;the filing of a Form&nbsp;8-K with the SEC and NASD within 15&nbsp;days after the Closing Date; (iv)&nbsp;any
filings as may be required under applicable state securities laws and the securities laws of any foreign country; (v)&nbsp;such filings as may be required under HSR; (vi)&nbsp;the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

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<P><FONT SIZE=2>
filing with The Nasdaq National Market of a Notification Form for Listing of Additional Shares with respect to the shares of Parent Common Stock issuable upon conversion of the Company Common Stock in
the Merger and upon exercise of the options under the Company Stock Option Plans assumed by Parent; (vii)&nbsp;the filing of a registration statement on Form&nbsp;S-8 with the SEC, or
other applicable form covering the shares of Parent Common Stock issuable pursuant to outstanding options under the Company Stock Option Plans assumed by Parent; and (viii)&nbsp;such other consents,
authorizations, filings, approvals and registrations which, if not obtained or made, would not have a Material Adverse Effect on Parent and would not prevent or materially alter or delay any of the
transactions contemplated by this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;SEC Documents; Financial Statements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Parent has made available to Company each statement, report,
registration statement (with the prospectus in the form filed pursuant to Rule&nbsp;424(b) of the Securities Act), definitive proxy statement, and other filings filed with the SEC by Parent since
July&nbsp;29, 2000, and, prior to the Effective Time, Parent will have furnished or made available to Company true and complete copies of any additional documents filed with the SEC by Parent prior
to the Effective Time (collectively, the "Parent SEC Documents"). Parent has timely filed all forms, statements and documents required to be filed by it with the SEC and The Nasdaq National Market
since July&nbsp;29, 2000. In addition, Parent has made available to Company all exhibits to the Parent SEC Documents filed prior to the date hereof, and will promptly make available to Company all
exhibits to any additional Parent SEC Documents filed prior to the Effective Time. All documents required to be filed as exhibits to the Company SEC Documents have been so filed, and all material
contracts so filed as exhibits are in full force and effect, except those which have expired in accordance with their terms, and neither Parent nor any of its subsidiaries is in default thereunder. As
of their respective filing dates, the Parent SEC Documents complied in all material respects with the requirements of the Exchange Act and the Securities Act, and none of the Parent SEC Documents
contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading, except to the extent corrected by a subsequently filed Parent SEC Document. The financial statements of Parent, including the notes thereto, included in the
Parent SEC Documents (the "Parent Financial Statements") were complete and correct in all material respects as of their respective dates, complied as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC with respect thereto as of their respective dates, and have been prepared in
accordance with GAAP applied on a basis consistent throughout the periods indicated and consistent with each other (except as may be indicated in the notes thereto or, in the case of unaudited
statements included in Quarterly Reports on Form&nbsp;10-Q, as permitted by Form&nbsp;10-Q of the SEC). The Parent Financial Statements fairly present the consolidated
financial condition and operating results of Parent and its subsidiaries at the dates and during the periods indicated therein (subject, in the case of unaudited statements, to normal, recurring
year-end adjustments). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Absence of Undisclosed Liabilities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Parent has no material obligations or liabilities of any nature
(matured or unmatured, fixed or contingent) other than (i)&nbsp;those set forth or adequately provided for in the Balance Sheet or in the related Notes to Consolidated Financial Statements included
in Parent's Annual Report on Form&nbsp;10-K for the year ended July&nbsp;29, 2000 (the "Parent Balance Sheet"), (ii)&nbsp;those disclosed in Parent SEC documents filed subsequent to
such Annual Report on Form&nbsp;10-K for the year ended July&nbsp;29, 2000, (iii)&nbsp;those incurred in the ordinary course of business and not required to be set forth in the
Parent Balance Sheet under GAAP, and (iv)&nbsp;those incurred in the ordinary course of business since the Parent Balance Sheet Date and consistent with past practice. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Litigation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;There is no litigation pending against Parent or any of its subsidiaries or, to the
knowledge of Parent, threatened against Parent or any of its subsidiaries that would prevent, enjoin, alter or materially delay any of the transactions contemplated by this Agreement, or that would
have a Material Adverse Effect on the ability of Parent to consummate the transactions contemplated by this </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

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<P><FONT SIZE=2>
Agreement. There is no judgment, decree or order against Parent or any of its subsidiaries, or, to the knowledge of Parent, any of their respective directors or officers (in their capacities as such),
that would prevent, enjoin, alter or materially delay any of the transactions contemplated by this Agreement, or that would have a Material Adverse Effect on the ability of Parent to consummate the
transactions contemplated by this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Broker's and Finders' Fees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Except for the fees of Thomas Weisel Partners, whose fees will be paid
by Parent, Parent has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders' fees or agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Registration Statement; Proxy Statement/Prospectus.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The information supplied by Parent and Merger
Sub for inclusion in the Registration Statement shall not, at the time the Registration Statement (including any amendments or supplements thereto) is declared effective by the SEC, contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. The information supplied by Parent for inclusion in the Proxy Statement shall not, on the date the Proxy
Statement is first mailed to Company's stockholders, at the time of the Company Stockholders Meeting and at the Effective Time, contain any statement which, at such time, is false or misleading with
respect to any material fact, or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which it is made, not false or misleading; or
omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Company Stockholders Meeting which has become false
or misleading. If at any time prior to the Effective Time any event or information should be discovered by Parent or Merger Sub which should be set forth in an amendment to the Registration Statement
or a supplement to the Proxy Statement, Parent or Merger Sub will promptly inform Company. Notwithstanding the foregoing, Parent and Merger Sub make no representation, warranty or covenant with
respect to any information supplied by Company or any third party which is contained in any of the foregoing documents. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Board Approval.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The Boards of Directors of Parent and Merger Sub have (i)&nbsp;approved this
Agreement and the Merger, (ii)&nbsp;determined that the Merger is advisable and in the best interests of their respective stockholders and is on terms that are fair to such stockholders and
(iii)&nbsp;recommended that the stockholder of Merger Sub approve this Agreement and the consummation of the Merger. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.10</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Representations Complete.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;None of the representations or warranties made by Parent or Merger Sub
herein or in any Schedule hereto, including the Parent Disclosure Schedule, or certificate furnished by Parent or Merger Sub pursuant to this Agreement, or the Parent SEC Documents, when all such
documents are read together in their entirety, contains or will contain at the Effective Time any untrue statement of a material fact, or omits or will omit at the Effective Time to state any material
fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which made, not misleading. </FONT></P>

<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_article_iv_conduct_prior_to_the_effective_time"> </A></FONT> <FONT SIZE=2><B>ARTICLE IV<BR>  CONDUCT PRIOR TO THE EFFECTIVE TIME         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Conduct of Business of Company.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;During the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement or the Effective Time, Company agrees (except to the extent expressly contemplated by this Agreement or as consented to in writing by Parent), to
carry on its and its subsidiaries' business in the ordinary course in substantially the same manner as heretofore conducted, to pay and to cause its subsidiaries to pay debts and Taxes when due
subject to
good faith disputes over such debts or taxes, to pay or perform other obligations when due, and to use all reasonable efforts consistent with past practice and policies to preserve intact its and its </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

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<P><FONT SIZE=2>
subsidiaries' present business organizations, use its reasonable best efforts consistent with past practice to keep available the services of its and its subsidiaries' present officers and key
employees and use its reasonable best efforts consistent with past practice to preserve its and its subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, and
others having business dealings with it or its subsidiaries, to the end that its and its subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective Time. Company agrees to
promptly notify Parent of any material event or occurrence not in the ordinary course of its or its subsidiaries' business, and of any event which would have a Material Adverse Effect on Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Restrictions on Conduct of Business of Company.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;During the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement or the Effective Time, except as expressly contemplated by this Agreement, Company shall not do, cause or permit any of the
following, or allow, cause or permit any of its subsidiaries to do, cause or permit any of the following, without the prior written consent of Parent: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT
SIZE=2><I>Charter Documents.</I></FONT><FONT SIZE=2> Cause or permit any amendments to its Articles of Incorporation or Bylaws; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;</FONT><FONT
SIZE=2><I>Dividends; Changes in Capital Stock.</I></FONT><FONT SIZE=2> Declare or pay any dividends on or make any other distributions (whether in
cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock, or repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except from former employees, directors and
consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service to it or its subsidiaries; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;</FONT><FONT
SIZE=2><I>Stock Option Plans, Etc.</I></FONT><FONT SIZE=2> Except as required by Section&nbsp;5.9 hereof, take any action to accelerate, amend or
change the period of exercisability or vesting of options or other rights granted under its stock plans or authorize cash payments in exchange for any options or other rights granted under any of such
plans. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;</FONT><FONT
SIZE=2><I>Material Contracts.</I></FONT><FONT SIZE=2> Enter into any contract or commitment, or violate, amend or otherwise modify or waive any of the
terms of any of its contracts, other than in the ordinary course of business consistent with past practice and in no event shall such contract, commitment, amendment, modification or waiver (other
than those relating to sales of products or purchases of supplies in the ordinary course) involve the payment by Company or its subsidiaries in excess of $300,000; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;</FONT><FONT
SIZE=2><I>Issuance of Securities.</I></FONT><FONT SIZE=2> Issue, deliver or sell or authorize or propose the issuance, delivery or sale of, or
purchase or propose the purchase of, any shares of its capital stock or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any
character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of its Common Stock pursuant to the exercise of stock options, warrants or other
rights therefor outstanding as of the date of this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Intellectual Property.</I></FONT><FONT SIZE=2> Transfer or license to any person or entity any rights to its Intellectual Property other
than the license of non-exclusive rights to its Intellectual Property in the ordinary course of business consistent with past practice and except pursuant to the terms of the Asset
Purchase Agreement, place any of its Intellectual Property into a source-code escrow, or grant any source-code license of any kind; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;</FONT><FONT
SIZE=2><I>Exclusive Rights.</I></FONT><FONT SIZE=2> Enter into or amend any agreements pursuant to which any other party is granted exclusive
marketing or other exclusive rights of any type or scope with respect to any of its products or technology; </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>24</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;</FONT><FONT SIZE=2><I>Dispositions.</I></FONT><FONT SIZE=2> Except as set forth in </FONT><FONT SIZE=2><I>Schedule&nbsp;4.2(h)</I></FONT><FONT SIZE=2>, sell,
lease, license or otherwise dispose of or encumber any of its properties or assets which are material, individually or in the aggregate, to its and its subsidiaries' business, taken as a whole, except
in the ordinary course of business consistent with past practice and except pursuant to the terms of the Asset Purchase Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Indebtedness.</I></FONT><FONT SIZE=2> Incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any
debt securities or guarantee any debt securities of others; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Leases.</I></FONT><FONT SIZE=2> Enter into any operating lease in excess of $100,000; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;</FONT><FONT
SIZE=2><I>Payment of Obligations.</I></FONT><FONT SIZE=2> Pay, discharge or satisfy in an amount in excess of $100,000 in any one case, any claim,
liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) arising other than in the ordinary course of business, other than the payment, discharge or satisfaction of
liabilities reflected or reserved against in the Company Financial Statements; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Capital Expenditures.</I></FONT><FONT SIZE=2> Make any capital expenditures, capital additions or capital improvements except in the
ordinary course of business and consistent with past practice that do not exceed $100,000 individually or $500,000 in the aggregate; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;</FONT><FONT
SIZE=2><I>Insurance.</I></FONT><FONT SIZE=2> Materially reduce the amount of any material insurance coverage provided by existing insurance policies; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;</FONT><FONT
SIZE=2><I>Termination or Waiver.</I></FONT><FONT SIZE=2> Terminate or waive any right of substantial value; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;</FONT><FONT
SIZE=2><I>Employee Benefit Plans; New Hires; Pay Increases.</I></FONT><FONT SIZE=2> Except as required by Section&nbsp;5.9(g) hereof, adopt or amend
any employee benefit or stock purchase or option plan or hire any new director level or officer level employee, pay any special bonus or special remuneration to any employee or director, or increase
the salaries or wage rates of its employees other than pursuant to scheduled annual performance reviews, provided that any resulting modifications are in the ordinary course of business and consistent
with Company's past practices. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;</FONT><FONT
SIZE=2><I>Severance Arrangements.</I></FONT><FONT SIZE=2> Grant any severance or termination pay (i)&nbsp;to any director or officer, or
(ii)&nbsp;to any other employee except payments made pursuant to standard written agreements outstanding on the date hereof; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;</FONT><FONT
SIZE=2><I>Lawsuits.</I></FONT><FONT SIZE=2> Commence a lawsuit other than (i)&nbsp;for the routine collection of bills, (ii)&nbsp;in such cases
where it in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided that it consults with Parent prior to the filing
of such a suit, (iii)&nbsp;for a breach of this Agreement, or (iv)&nbsp;to clarify its obligations under this Agreement or the Option Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;</FONT><FONT
SIZE=2><I>Acquisitions.</I></FONT><FONT SIZE=2> Acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion
of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any
assets which are material, individually or in the aggregate, to its and its subsidiaries' business, taken as a whole, or acquire or agree to acquire any equity securities of any corporation,
partnership, association or business organization; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;</FONT><FONT
SIZE=2><I>Taxes.</I></FONT><FONT SIZE=2> Other than in the ordinary course of business, make or change any material election in respect of Taxes,
adopt or change any accounting method in respect of Taxes, file any material Tax Return or any amendment to a material Tax Return, enter into any closing agreement, settle any claim or assessment in
respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>25</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Notices.</I></FONT><FONT SIZE=2> Company shall give all notices and other information required by applicable law to be given to the
employees of Company, any collective bargaining unit representing any group of employees of Company, and any applicable government authority under the WARN Act, the National Labor Relations Act, the
Internal Revenue Code, the Consolidated Omnibus Budget Reconciliation Act, and other applicable law in connection with the transactions provided for in this Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;</FONT><FONT
SIZE=2><I>Revaluation.</I></FONT><FONT SIZE=2> Revalue any of its assets, including without limitation writing down the value of inventory or writing
off notes or accounts receivable other than in the ordinary course of business; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;</FONT><FONT
SIZE=2><I>Accounting Policies and Procedures.</I></FONT><FONT SIZE=2> Make any change to its accounting methods, principles, policies, procedures or
practices, except as may be required by GAAP, Regulation&nbsp;S-X promulgated by the SEC or applicable statutory accounting principles; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;</FONT><FONT
SIZE=2><I>Year 2000 Compliance.</I></FONT><FONT SIZE=2> Fail to carry forward in all material respects Company's Year&nbsp;2000 assessment and
compliance programs, as made available to Parent by Company; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;</FONT><FONT
SIZE=2><I>Asset Purchase Agreement. </I></FONT><FONT SIZE=2>Seek to amend or waive, or consent to an amendment or waiver of, any provision of the
Asset Purchase Agreement or the Noteholder Rights and Security Agreement (as
defined in the Asset Purchase Agreement) or any of the forms of agreements contemplated by such agreements; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;</FONT><FONT
SIZE=2><I>Line of Credit. </I></FONT><FONT SIZE=2>Company shall not draw down any amounts from that certain Revolving Line of Credit, dated as of
November&nbsp;30, 1998, by and between Company and Wells Fargo Bank, National Association, as amended (the "Line of Credit"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;</FONT><FONT
SIZE=2><I>Other. </I></FONT><FONT SIZE=2>Take or agree in writing or otherwise to take, any of the actions described in Sections 4.2(a) through
(y)&nbsp;above, or any action which would make any of its representations or warranties contained in this Agreement untrue or incorrect or prevent it from performing or cause it not to perform its
covenants hereunder. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;No Solicitation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company and its subsidiaries and the officers, directors, employees or other
agents of Company and its subsidiaries (collectively, "Company Representatives") will not, directly or indirectly, (i)&nbsp;take any action to solicit, initiate or encourage or agree to any Takeover
Proposal (as defined in Section&nbsp;7.3(f)) or (ii)&nbsp;subject to the terms of the immediately following sentence, engage in any discussions or negotiations with, or disclose any nonpublic
information relating to Company or any of its subsidiaries to, or afford access to the properties, books or records of Company or any of its subsidiaries to, any person that has advised Company that
it may be considering making, or that has made, a Takeover Proposal; provided, that nothing herein shall prohibit Company's Board of Directors from complying with Rules&nbsp;14d-9 and
14e-2 promulgated under the Exchange Act. Notwithstanding the immediately preceding sentence, if, prior to adoption of this Agreement by Company stockholders, an unsolicited written
Takeover Proposal shall be received by the Board of Directors of Company, then, to the extent the Board of Directors of Company believes in good faith (after advice from its financial advisor and
after considering all terms and conditions of such written Takeover Proposal, including the likelihood and timing of its consummation) that such Takeover Proposal would result in a transaction more
favorable to Company's stockholders from a financial point of view than the transaction contemplated by this Agreement (any such more favorable Takeover Proposal being referred to in this Agreement as
a "Superior Proposal") and the Board of Directors of Company determines in good faith after advice from outside legal counsel that it is necessary for the Board of Directors of Company to comply with
its fiduciary duties to stockholders under applicable law, Company Representatives may furnish in connection therewith information to the party making such Superior Proposal and, subject to the
provisions hereof, engage in negotiations with such party, and such actions shall not be considered a breach of this Section&nbsp;4.3 or any other provisions of this Agreement; provided that in each
such event </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>26</FONT></P>

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<P><FONT SIZE=2>
Company notifies Parent of such determination by the Company Board of Directors and provides Parent with a true and complete copy of the Superior Proposal received from such third party, and provides
(or has provided) Parent with all documents containing or referring to non-public information
of Company that are supplied to such third party; provided, however, that Company provides such non-public information pursuant to a non-disclosure agreement at least as
restrictive on such third party as the Confidentiality Agreement (as defined in Section&nbsp;5.4) is on Parent; and provided further that Company shall not, and shall not permit any of its officers,
directors, employees or other representatives, as agents, to agree to or endorse any Takeover Proposal or withdraw its recommendation of the Merger and adoption of this Agreement unless Company has
provided Parent at least three (3)&nbsp;days prior notice thereof. Company will promptly (and in any event within 24&nbsp;hours) notify Parent after receipt of any Takeover Proposal or any notice
that any person is considering making a Takeover Proposal or any request for non-public information relating to Company or any of its subsidiaries or for access to the properties, books or
records of Company or any of its subsidiaries by any person that has advised Company that it may be considering making, or that has made, a Takeover Proposal, or whose efforts to formulate a Takeover
Proposal would be assisted thereby (such notice to include the identity of such person or persons), and will keep Parent fully informed of the status and details of any such Takeover Proposal notice,
request or correspondence or communications related thereto, and shall provide Parent with a true and complete copy of such Takeover Proposal notice or any amendment thereto, if it is in writing, or a
complete written summary thereof, if it is not in writing. Company shall immediately cease and cause to be terminated all existing discussions or negotiations with any persons conducted heretofore
with respect to a Takeover Proposal. </FONT></P>

<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_article_v_additional_agreements"> </A></FONT> <FONT SIZE=2><B>ARTICLE V<BR>  ADDITIONAL AGREEMENTS         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Proxy Statement/Prospectus; Registration Statement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;As promptly as practicable after the execution
of this Agreement, Company and Parent shall prepare, and Company shall file with the SEC, preliminary proxy materials relating to the approval of the Merger and the transactions contemplated hereby by
the stockholders of Company. As promptly as practicable following receipt of SEC comments thereon, Company shall file with the SEC definitive proxy materials and Parent shall file with the SEC a
Registration Statement on Form&nbsp;S-4 (or such other or successor form as shall be appropriate), in each case which complies in form with applicable SEC requirements and shall use all
reasonable efforts to cause the Registration Statement to become effective as soon thereafter as practicable. Company and Parent will notify each other promptly of the receipt of any comments from the
SEC or its staff and of any request by the SEC or its staff or any other government officials for amendments or supplements to the Proxy Statement or any other filing or for additional information and
will supply each other with copies of all correspondence between such party or any of its representatives, on the one hand, and the SEC, or its staff or any other government officials, on the other
hand, with respect to the Proxy Statement or other filing. Whenever any event occurs that is required to be set forth in an amendment or supplement to the Proxy Statement or any other filing, Company
shall promptly inform Parent of such occurrence and cooperate in filing with the SEC or its staff or any other government officials, and/or mailing to shareholders of Company, such amendment or
supplement. Subject to Section&nbsp;4.3, the Proxy Statement shall solicit the adoption of this Agreement by stockholders of Company and shall include the approval of this Agreement and the Merger
by the Board of Directors of Company and the
recommendation of the Board of Directors of Company to Company's stockholders that they vote in favor of adoption of this Agreement and the Merger. All shares of Parent Company Stock issued pursuant
to Section&nbsp;1.6 hereof shall be registered pursuant to this Section&nbsp;5.1. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Meeting of Stockholders.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company shall promptly after the date hereof take all action necessary in
accordance with Washington Law and its Articles of Incorporation and Bylaws to convene the Company Stockholders Meeting within 45&nbsp;days of the Registration Statement being declared </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>27</FONT></P>

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<P><FONT SIZE=2>
effective by the SEC. Company shall consult with Parent regarding the date of the Company Stockholders Meeting and use all reasonable efforts and shall not postpone or adjourn (other than for the
absence of a quorum) the Company Stockholders Meeting, without the consent of Parent. Company shall use its reasonable best efforts to solicit from stockholders of Company proxies in favor of adoption
of this Agreement and the Merger and shall take all other action necessary or advisable to secure the vote or consent of stockholders required to effect the Merger. </FONT></P>

<UL>

<P><FONT SIZE=2>5.3&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Access to Information.</I></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Company
shall afford Parent and its accountants, counsel and other representatives, reasonable access during normal business hours during the period prior to the
Effective Time to (i)&nbsp;all of Company's and its subsidiaries' properties, books, contracts, commitments and records, and (ii)&nbsp;all other information concerning the business, properties and
personnel of Company and its subsidiaries as Parent may reasonably request. Company agrees to provide to Parent and its accountants, counsel and other representatives copies of internal financial
statements promptly upon request. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Subject
to compliance with applicable law, from the date hereof until the Effective Time, each of Parent and Company shall confer on a regular and frequent basis
with one or more representatives of the other party to report operational matters of materiality and the general status of ongoing operations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;No
information or knowledge obtained in any investigation pursuant to this Section&nbsp;5.3 shall affect or be deemed to modify any representation or warranty
contained herein or the conditions to the obligations of the parties to consummate the Merger. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Company
shall provide Parent and its accountants, counsel and other representatives reasonable access, during normal business hours during the period prior to the
Effective Time, to all of Company's and subsidiaries Tax Returns and other records and workpapers relating to Taxes, and shall also provide the following information upon the request of Parent or its
subsidiaries: (i)&nbsp;a schedule of the types of Tax Returns being filed by Company and each of its subsidiaries in each taxing jurisdiction, (ii)&nbsp;a schedule of the year of the commencement
of the filing of each such type of Tax Return, (iii)&nbsp;a schedule of all closed years with respect to each such type of Tax Return filed in each jurisdiction, (iv)&nbsp;a schedule of all
material Tax elections filed in each jurisdiction by Company and each of its subsidiaries, (v)&nbsp;a schedule of any deferred intercompany gain with respect to transactions to which Company or any
of its subsidiaries has been a party, and (vi)&nbsp;receipts for any Taxes paid to foreign Tax authorities. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Confidentiality.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The parties acknowledge that each of Parent and Company have previously executed a
non-disclosure agreement, which agreement shall continue in full force and effect in accordance with its terms; </FONT><FONT SIZE=2><I>provided, however, </I></FONT><FONT SIZE=2>the
fifth, sixth, eighth and ninth paragraphs of such non-disclosure agreement shall be superseded by the terms hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Public Disclosure.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Unless otherwise permitted by this Agreement, Parent and Company shall consult
with each other before issuing any press release or otherwise making any public statement or making any other public (or non-confidential) disclosure (whether or not in response to an
inquiry) regarding the terms of this Agreement and the transactions contemplated hereby, and neither shall issue any such press release or make any such statement or disclosure without the prior
approval of the other (which approval shall not be unreasonably withheld), except as may be required by law or by obligations pursuant to any listing agreement with any national securities exchange or
with the NASD, in which case the party proposing to issue such press release or make such public statement or disclosure shall use its commercially reasonable efforts to consult with the other party
before issuing such press release or making such public statement or disclosure. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>28</FONT></P>

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<UL>

<P><FONT SIZE=2>5.6&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Consents; Cooperation.</I></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Each
of Parent and Company shall promptly apply for or otherwise seek, and use its reasonable best efforts to obtain, all consents and approvals required to be
obtained by it for the consummation of the Merger, including those required under HSR. Company shall use its reasonable best efforts to obtain all necessary consents, waivers and approvals under any
of its material contracts in connection with the Merger for the assignment thereof or otherwise. The parties hereto will consult and cooperate with one another, and consider in good faith the views of
one another, in connection with any analyses,
appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to HSR or any
other federal or state antitrust or fair trade law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Each
of Parent and Company shall use its reasonable best efforts to resolve such objections, if any, as may be asserted by any Governmental Entity with respect to
the transactions contemplated by this Agreement under HSR, the Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as amended, and any other Federal, state or
foreign statutes, rules, regulations, orders or decrees that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade (collectively,
"Antitrust Laws"). In connection therewith, if any administrative or judicial action or proceeding is instituted (or threatened to be instituted) challenging any transaction contemplated by this
Agreement as violative of any Antitrust Law, each of Parent and Company shall cooperate and use its reasonable best efforts vigorously to contest and resist any such action or proceeding and to have
vacated, lifted, reversed, or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent (each, an "Order"), that is in effect and that prohibits,
prevents, or restricts consummation of the Merger or any such other transactions, unless by mutual agreement Parent and Company decide that litigation is not in their respective best interests.
Notwithstanding the provisions of the immediately preceding sentence, it is expressly understood and agreed that neither Parent nor Company shall have any obligation to litigate or contest any
administrative or judicial action or proceeding or any Order beyond the Final Date (as defined in Section&nbsp;7.1(b)). Each of Parent and Company shall use its reasonable best efforts to take such
action as may be required to cause the expiration of the notice periods under the HSR or other Antitrust Laws with respect to such transactions as promptly as possible after the execution of this
Agreement. Parent and Company also agree to take any and all of the following actions to the extent necessary to obtain the approval of any Governmental Entity with jurisdiction over the enforcement
of any applicable laws regarding the transactions contemplated hereby: entering into negotiations; providing information required by law or governmental regulation; and substantially complying with
any second request for information pursuant to the Antitrust Laws. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Notwithstanding
anything to the contrary in Section&nbsp;5.6(a) or (b), (i)&nbsp;neither Parent nor any of it subsidiaries shall be required to divest any of
their respective businesses, product lines or assets, or to take or agree to take any other action or agree to any limitation that would reasonably be expected to have a Material Adverse Effect on
Parent or of Parent combined with the Surviving Corporation after the Effective Time and (ii)&nbsp;neither Company nor its subsidiaries shall be required to divest any of their respective
businesses, product lines or assets, or to take or agree to take any other action or agree to any limitation that would reasonably be expected to have a Material Adverse Effect on Company. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Legal Requirements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Each of Parent, Merger Sub and Company will, and will cause their respective
subsidiaries to, take all reasonable actions necessary to comply promptly with all legal requirements which may be imposed on them with respect to the consummation of the transactions </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>29</FONT></P>

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<P><FONT SIZE=2>
contemplated by this Agreement and will promptly cooperate with and furnish information to any party hereto necessary in connection with any such requirements imposed upon such other party in
connection with the consummation of the transactions contemplated by this Agreement and will take all reasonable actions necessary to obtain (and will cooperate with the other parties hereto in
obtaining) any consent, approval, order or authorization of, or any registration, declaration or filing with, any Governmental Entity or other person, required to be obtained or made in connection
with the taking of any action contemplated by this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Blue Sky Laws.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Parent shall take such steps as may be necessary to comply with the securities and
blue sky laws of all jurisdictions which are applicable to the issuance of the Parent Common Stock in connection with the Merger. Company shall use its reasonable best efforts to assist Parent as may
be necessary to comply with the securities and blue sky laws of all jurisdictions which are applicable in connection with the issuance of Parent Common Stock in connection with the Merger. </FONT></P>

<UL>

<P><FONT SIZE=2>5.9&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Employee Benefit Plans.</I></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;At
the Effective Time, each outstanding option to purchase shares of Company Common Stock under the Company Stock Option Plans whether vested or unvested, will be
assumed by Parent as set forth below. Company represents and warrants to Parent that </FONT><FONT SIZE=2><I>Schedule&nbsp;5.9(a) </I></FONT><FONT SIZE=2>hereto sets forth a true and complete list
as of the date hereof of all holders of outstanding options under the Company Stock Option Plans, including the number of shares of Company capital stock subject to each such option, the exercise or
vesting schedule, the exercise price per share and the term of each such option. On the Closing Date, Company shall deliver to Parent an updated </FONT><FONT SIZE=2><I>Schedule&nbsp;5.9(a)  </I></FONT><FONT SIZE=2>hereto current as of such date. Each
such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in
the applicable Company Stock Option Plans and the applicable stock option agreements, immediately prior to the Effective Time, except that (i)&nbsp;such option will be exercisable for that number of
whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time
multiplied by the Exchange Ratio and rounded down to the nearest whole number of shares of Parent Common Stock, and (ii)&nbsp;the per share exercise price for the shares of Parent Common Stock
issuable upon exercise of such assumed option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately
prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. At or prior to the Closing, Company shall take all actions required to prevent the cancellation or termination
of such options upon the closing of the Merger or the transactions contemplated hereby, and to allow such options at the Effective Time to be converted into options to purchase Parent Common Stock as
described above, without requiring the consent of the optionees. Except as set forth in </FONT><FONT SIZE=2><I>Schedule&nbsp;5.9(a)(i) </I></FONT><FONT SIZE=2>of the Company Disclosure Schedule,
neither the Merger nor
the transactions contemplated by the Asset Purchase Agreement will terminate any of the outstanding options under the Company Stock Plans or accelerate the exercisability or vesting of such options or
the shares of Parent Common Stock which will be subject to those options upon Parent's assumption of the options in the Merger. Company has not granted any options under the Company Stock Option Plans
intended to qualify as "incentive stock options" as defined in Section&nbsp;422 of the Code. Within 30 business days after the Effective Time, Parent will issue to each person who, immediately prior
to the Effective Time was a holder of an outstanding option under the Company Stock Option Plans a document evidencing the foregoing assumption of such option by Parent. At or prior to the Effective
Time, Parent shall take all corporate action necessary to reserve for future issuance, and shall maintain such reservation for so long as any of the assumed options remain </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>30</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>
outstanding, a sufficient number of shares of Parent Common Stock for delivery upon the exercise of such options. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;All
outstanding rights of Company which it may hold immediately prior to the Effective Time to repurchase unvested shares of Company Common Stock (the "Repurchase
Options") shall continue in effect following the Merger and shall thereafter continue to be exercisable by Parent upon the same terms and conditions in effect immediately prior to the Effective Time,
except that the shares purchasable pursuant to the Repurchase Options and the purchase price per share shall be adjusted to reflect the Exchange Ratio. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Outstanding
purchase rights under the Company ESPP shall be exercised upon the next scheduled purchase date, December&nbsp;31, 2000, under the Company ESPP, and
each participant in the Company ESPP shall accordingly be issued shares of Company Common Stock at that. Company shall cause the Company ESPP to terminate with such exercise date, and no purchase
rights shall be subsequently granted or exercised under the Company ESPP. Company employees who meet the eligibility requirements for participation in the Parent Employee Stock Purchase Plan shall be
eligible to begin payroll deductions under that plan as of the start date of the first offering period thereunder beginning after the Effective Time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Within
five (5)&nbsp;business days following the date of this Agreement, Company shall set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;5.9(d)  </I></FONT><FONT SIZE=2>a list of all persons who Company reasonably believes are, with respect to Company and
as of the date of this Agreement, "disqualified individuals" (within the meaning of
Section&nbsp;280G of the Code and the regulations promulgated thereunder). For this purpose, Company shall assume that the fair market value of Company Common Stock is $20 per share. Within a
reasonable period of time after the last business day of each month after the date of this Agreement and on or about the date five business days prior to the expected Closing Date, Company shall
revise </FONT><FONT SIZE=2><I>Schedule&nbsp;5.9(d) </I></FONT><FONT SIZE=2>to reflect the most recently available closing price of Company Common Stock as of the last business day of such
month and to reflect any additional information which Company reasonably believes would impact the determination of persons who are, with respect to Company and as of the each such date, "disqualified
individuals" (within the meaning of Section&nbsp;280G of the Code and the regulations promulgated thereunder). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;If
required by Parent in a written notice delivered to Company, the Board of Directors of the Company shall, prior to the Closing Date, execute a resolution either
terminating or freezing the Company's benefit plan, that is intended to be qualified under sections 401(a) and 401(k) of the Code (the "Company's 401(k) Plan"), to be effective prior to the Closing
Date. The Board of Directors of the Company shall adopt a corresponding amendment to Company's 401(k) Plan freezing contributions and participation as well as amending it for the relevant provisions
of the Taxpayer Relief Act of 1997 ("TRA "97"), the Small Business Job Protection Act of 1996 ("SBJPA"), the Uruguay Round Agreements Act ("GATT"), the Uniformed Services Employment and Reemployment
Rights Act of 1994 ("USERRA"), and the Restructuring and Reform Act of 1998 ("RRA"). Company's Employees shall be eligible to participate in Parent's benefit plan that is intended to be qualified
under sections 401(a) and 401(k) of the Code as soon as administratively feasible following the Closing Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;Company
shall use its reasonable best efforts to obtain acceleration waivers in the form attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;E  </I></FONT><FONT SIZE=2>(the "Waivers") from each of the individuals listed on </FONT><FONT SIZE=2><I>Schedule
&nbsp;5.9(f) </I></FONT><FONT SIZE=2>hereto and from any other employee other than a
Transferred Employee who agrees to continue to be employed by Company and/or Parent after the Closing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;Company
shall amend the Company Stock Option Plans and all options outstanding under such Company Stock Option Plans to give each optionee a thirty (30)&nbsp;day
period </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>31</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>
following his or her termination of employment to exercise his or her option and shall send to each optionee a notice of such change in form and substance satisfactory to Parent. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.10</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Forms S-3 and S-8.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Parent agrees to file, no later than 30 business days
after Parent's receipt of the Spreadsheet (as defined in Section&nbsp;5.21)(provided that Parent has received within 10 business days after the Closing all option documentation it requires relating
to the outstanding options), (i)&nbsp;a registration statement on Form&nbsp;S-8 under the Securities Act covering the shares of Parent Common Stock issuable pursuant to outstanding
options granted to individuals for which a Form&nbsp;S-8 registration statement is available and listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;5.10(a) </I></FONT><FONT SIZE=2>hereto
and (ii)&nbsp;a registration statement on Form&nbsp;S-3 under the Securities Act covering the shares of Parent Common Stock issuable pursuant to outstanding options granted to entities
or to individuals for which a Form&nbsp;S-8 registration statement is not available, which
Form&nbsp;S-3 shall remain current for one year from the Effective Time, under the Company Stock Option Plans assumed by Parent or otherwise issued in compensatory transactions to
entities or to individuals not currently providing services to Company as employees or consultants and listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;5.10(b). </I></FONT><FONT SIZE=2>Company shall
cooperate with and assist Parent in the preparation of such registration statements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.11</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Option Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company agrees to fully perform its obligations under the Option Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.12</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Nasdaq Quotation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company and Parent agree to continue the quotation of Company Common Stock and
Parent Common Stock, respectively, on The Nasdaq National Market during the term of the Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.13</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Employees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company shall use its reasonable best efforts to cause each of the individuals set
forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;5.13</I></FONT><FONT SIZE=2> to deliver to Parent an executed Employment and Non-Competition Agreement in the form attached hereto as </FONT> <FONT SIZE=2><I>Exhibit&nbsp;F</I></FONT><FONT SIZE=2>.
</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.14</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Action Under Stock Option Plan.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The Board of Directors of Company shall take all action necessary
to prevent the cancellation or termination of options under the Company Stock Option Plans upon the closing of the Merger and to allow such options to be assumed by Parent as described in
Section&nbsp;5.9 </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.15</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Notice to Certain Employees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company shall provide written notice in the form attached hereto as </FONT> <FONT SIZE=2><I>Exhibit&nbsp;G</I></FONT><FONT SIZE=2> ("Notice to Transferred
Employees") to each of the employees listed on </FONT> <FONT SIZE=2><I>Schedule&nbsp;5.15</I></FONT><FONT SIZE=2> (the "Transferred Employees"), as such Schedule is amended from time to time by Parent prior to the Effective Time, that such
employee will be assigned to Newco and that Company's rights under such employee's employment agreement shall be assigned to Newco as of the Effective Time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.16</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Indemnification.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;After
the Effective Time, Parent will fulfill and honor in all respects the obligations of Company pursuant to the indemnification provisions of Company's Articles
of Incorporation and Bylaws or any indemnification agreement with Company officers and directors to which Company is a party, in each case in effect on the date hereof; provided that such
indemnification shall be subject to any limitation imposed from time to time under applicable law. Without limitation of the foregoing, in the event any person so indemnified (an "Indemnified Party")
is or becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter relating to this Agreement or the transactions contemplated hereby occurring on or prior to the Effective Time, Parent shall, or shall cause
the Surviving Corporation to, pay as incurred such Indemnified Party's reasonable legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith to
the fullest extent permitted by the Delaware Law upon receipt of any undertaking contemplated by Section&nbsp;145(e) of the Delaware Law. Any Indemnified Party </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>32</FONT></P>

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<P><FONT SIZE=2>
wishing to claim indemnification under this Section&nbsp;5.16, upon learning of any such claim, action, suit, proceeding or investigation, shall promptly notify Parent and the Surviving Corporation,
and shall deliver to Parent and the Surviving Corporation the undertaking contemplated by Section&nbsp;145(e) of the Delaware Law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;For
five years after the Effective Time, Parent will either (i)&nbsp;at all times maintain at least $50,000,000 in cash, marketable securities or unrestricted
lines of credit (or any combination thereof) to be available to indemnify the Indemnified Parties in accordance with Section&nbsp;5.16(a) above or (ii)&nbsp;cause the Surviving Corporation to
provide officers' and directors' liability insurance in respect of acts or omissions occurring on or prior to the Effective Time covering each such person currently covered by Company's officers' and
directors' liability insurance policy on terms substantially similar to those of such policy in effect on the date hereof, provided that in satisfying its obligation under this Section, Parent shall
not be obligated to cause the Surviving Corporation to pay premiums in excess of 150% of the amount per annum Company paid in its last full fiscal year, which amount has been disclosed to Parent, and
if the Surviving Corporation is unable to obtain the insurance required by this Section&nbsp;5.16, it shall obtain as much comparable insurance as possible for an annual premium equal to such
maximum amount. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;To
the extent there is any claim, action, suit, proceeding or investigation (whether arising before or after the Effective Time) against an Indemnified Party that
arises out of or pertains to any action or omission in his or her capacity as director, officer, employee, fiduciary or agent of Company occurring prior to the Effective Time, or arises out of or
pertains to the transactions contemplated by this Agreement for a period lasting until the expiration of five years after the Effective Time (whether arising before or after the Effective Time), in
each case for which such Indemnified Party is indemnified under this Section&nbsp;5.16, such Indemnified Party shall be entitled to be represented by counsel, which counsel shall be counsel of
Parent (provided that if use of counsel of Parent would be expected under applicable standards of professional conduct to give rise to a conflict between the position of the Indemnified Person and of
Parent, the Indemnified Party shall be entitled instead to be represented by counsel selected by the Indemnified Party and reasonably acceptable to Parent) and following the Effective Time the
Surviving Corporation and Parent shall pay the reasonable fees and expenses of such counsel, promptly after statements therefor are received and the Surviving Corporation and Parent will cooperate in
the defense of any such matter; provided, however, that neither the Surviving Corporation nor Parent shall be liable for any settlement effected without its
written consent (which consent shall not be unreasonably withheld); and provided, further, that, in the event that any claim or claims for indemnification are asserted or made prior to the expiration
of such five year period, all rights to indemnification in respect to any such claim or claims shall continue until the disposition of any and all such claims. The Indemnified Parties as a group may
retain only one law firm (in addition to local counsel) to represent them with respect to any single action unless there is, under applicable standards of professional conduct, a conflict on any
significant issue between the position of any two or more Indemnified Parties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The
provisions of this Section&nbsp;5.16 are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party, his or her heirs and
representatives. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.17</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Tax Treatment.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;For U.S. federal income tax purposes, it is intended that the Merger qualify as a
reorganization within the meaning of the Code, and the parties hereto intend that the transactions contemplated by this Agreement shall constitute a "plan of reorganization" within the meaning of
Section&nbsp;368 of the Code and Treasury Regulations Sections&nbsp;1.368-2(g) and 1.368-3(a). Parent will report the Merger on its income tax returns in a manner
consistent with treatment of the Merger as a Code Section&nbsp;368(a) reorganization. Neither Parent, the Company nor any of there respective affiliates has </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>33</FONT></P>

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<P><FONT SIZE=2>
taken any action, nor will they take any action, that would prevent or impede the Merger from qualifying as a reorganization under Section&nbsp;368 of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.18</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Stockholder Litigation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Unless and until the Board of Directors of Company has withdrawn its
recommendation of the Merger, Company shall give Parent the opportunity to participate at its own expense in the defense of any stockholder litigation against Company and/or its directors relating to
the transactions contemplated by this Agreement and the Option Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.19</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Section&nbsp;280G/83(b) Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company shall use its reasonable best efforts to obtain,
prior to the Closing Date, a properly executed Section&nbsp;280G/83(b) Agreement in the form attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;H</I></FONT><FONT SIZE=2> (the "280G/83(b)
Agreement") from each person reasonably identified by Company or Parent as potentially receiving excess parachute payments, as defined in Section&nbsp;280G of the Code, in connection with the
Merger. Prior to the Closing Date, Company shall disclose the contents, and provide a copy, of the 280G/83(b) Agreement to each person that Company reasonably believes may potentially receive excess
parachute payments, as defined in Section&nbsp;280G of the Code, in connection with the Merger. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.20</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Spreadsheet.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company shall use all reasonable efforts to prepare a spreadsheet in form acceptable
to Parent which spreadsheet shall be certified as complete and correct by a duly elected officer of Company as of the Closing and shall list, as of the Closing, all optionholders and their respective
addresses, the number of Company options to purchase shares held by such persons (including in the case of shares, the respective certificate numbers), the Exchange Ratio applicable to each holder,
the number of shares of options to purchase Parent Common Stock to be issued to each holder, and the vesting arrangement with respect to Company Options (the "Spreadsheet"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.21</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Execution of Stockholder Agreement by NEC.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company shall use its reasonable best efforts to have
NEC Corporation execute and deliver a Stockholder Agreement promptly after the date hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.22</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Termination of Company ESPP.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The Board of Directors of Company shall take all action necessary to
terminate the Company ESPP immediately following the December&nbsp;31, 2000 purchase date under such plan. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.23</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Resolution of Certain Litigation Matters.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Company shall use its reasonable best efforts to settle,
in an aggregate amount not to exceed $30,000, or have dismissed, each of the litigation items listed as items&nbsp;1, 2 and 3 on Schedule&nbsp;2.7 hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.24</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Best Efforts and Further Assurances.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Each of the parties to this Agreement shall use its best
efforts to effectuate the transactions contemplated hereby and to fulfill and cause to be fulfilled the conditions to closing under this Agreement. Each party hereto, at the reasonable request of
another party hereto, shall execute and deliver such other instruments and do and perform such other acts and things as may be necessary or desirable for effecting completely the consummation of this
Agreement and the transactions contemplated hereby. </FONT></P>

<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_article_vi_conditions_to_the_merger"> </A></FONT> <FONT SIZE=2><B>ARTICLE VI<BR>  CONDITIONS TO THE MERGER         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Conditions to Obligations of Each Party to Effect the Merger.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The respective obligations of each
party to this Agreement to consummate and effect this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Effective Time of each of the following conditions, any of which may be waived, in writing, by agreement of all the parties hereto: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT
SIZE=2><I>Stockholder Approval.</I></FONT><FONT SIZE=2> This Agreement and the Merger shall have been approved and adopted by the requisite vote of
the stockholders of Company under Washington Law. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>34</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;</FONT><FONT SIZE=2><I>Registration Statement Effective.</I></FONT><FONT SIZE=2> The SEC shall have declared the Registration Statement effective. No stop order
suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose, and no similar proceeding in respect of the Proxy Statement,
shall have been initiated or threatened by the SEC; and all requests for additional information on the part of the SEC shall have been complied with to the reasonable satisfaction of the parties
hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;</FONT><FONT
SIZE=2><I>No Injunctions or Restraints; Illegality.</I></FONT><FONT SIZE=2> No temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the Merger shall be in effect, nor shall any proceeding
brought by an administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, seeking any of the foregoing be pending; nor shall there be any action taken,
or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Merger, which makes the consummation of the Merger illegal. In the event an injunction or other order
shall have been issued, each party agrees to use its reasonable best efforts to have such injunction or other order lifted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;</FONT><FONT
SIZE=2><I>Governmental Approvals.</I></FONT><FONT SIZE=2> Parent, Company and Merger Sub and their respective subsidiaries shall have timely obtained
from each Governmental Entity all approvals, waivers and consents, if any, necessary for consummation of or in connection with the Merger and the several transactions contemplated hereby, including
such approvals, waivers and consents as may be required under the Securities Act, under state Blue Sky laws, and under HSR. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;</FONT><FONT
SIZE=2><I>Tax Opinion.</I></FONT><FONT SIZE=2> Parent and Company shall have received substantially similar written opinions of Brobeck, Phleger and
Harrison&nbsp;LLP and Gary Cary Ware&nbsp;&amp; Freidenrich&nbsp;LLP, respectively, in form and substance reasonably satisfactory to them, dated on or about the date of Closing to the effect that
the Merger will constitute a reorganization within the meaning of Section&nbsp;368(a) of the Code, and such opinions shall not have been withdrawn. In rendering such opinions, counsel shall be
entitled to rely
upon, among other things, reasonable assumptions as well as representations of Parent, Merger Sub and Company. In addition, Parent and Company shall have received from such respective firms such tax
opinions as may be required by the SEC in connection with the filing of the Registration Statement. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Additional Conditions to Obligations of Company.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The obligations of Company to consummate and
effect this Agreement and the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Effective Time of each of the following conditions, any of which may be waived,
in writing, by Company: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT
SIZE=2><I>Representations, Warranties and Covenants.</I></FONT><FONT SIZE=2> (i)&nbsp;The representations and warranties of Parent and Merger Sub in
this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality which representations
and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Effective Time as though such representations and warranties were made on and as of such
time (provided that those representations and warranties which address matters only as of a particular date shall be true and correct as of such date) and (ii)&nbsp;Parent and Merger Sub shall have
performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by them as of the Effective Time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;</FONT><FONT
SIZE=2><I>Certificate of Parent.</I></FONT><FONT SIZE=2> Company shall have been provided with a certificate executed on behalf of Parent by an
authorized officer certifying that the condition set forth in Section&nbsp;6.2(a) shall have been fulfilled. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>35</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Additional Conditions to the Obligations of Parent and Merger Sub.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The obligations of Parent and
Merger Sub to consummate and effect this Agreement and the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Effective Time of each of the following conditions,
any of which may be waived, in writing, by Parent: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT
SIZE=2><I>Representations, Warranties and Covenants.</I></FONT><FONT SIZE=2> (i)&nbsp;The representations and warranties of Company in this
Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality, which representations and
warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Effective Time as though such representations and warranties were made on and as of such time
(provided that those representations and warranties which address matters only as of a particular date
shall be true and correct as of such date) and (ii)&nbsp;Company shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required
to be performed and complied with by it as of the Effective Time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;</FONT><FONT
SIZE=2><I>Certificate of Company.</I></FONT><FONT SIZE=2> Parent shall have been provided with a certificate executed on behalf of Company by its
President and Chief Financial Officer certifying that the condition set forth in Section&nbsp;6.3(a) shall have been fulfilled. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;</FONT><FONT
SIZE=2><I>Third Party Consents.</I></FONT><FONT SIZE=2> Parent shall have been furnished with evidence satisfactory to it of the consent or approval
of those persons whose consent or approval shall be required in connection with the Merger under the contracts of Company set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;6.3(c)</I></FONT><FONT SIZE=2> hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;</FONT><FONT
SIZE=2><I>Injunctions or Restraints on Conduct of Business.</I></FONT><FONT SIZE=2> No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other legal or regulatory restraint provision limiting or restricting Parent's conduct or operation of the business of
Company and its subsidiaries, following the Merger shall be in effect, nor shall any proceeding brought by an administrative agency or commission or other Governmental Entity, domestic or foreign,
seeking the foregoing be pending. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;</FONT><FONT
SIZE=2><I>No Material Adverse Changes.</I></FONT><FONT SIZE=2> There shall not have occurred any Material Adverse Effect on Company, or any change
that has a Material Adverse Effect on Company (other than Non-Controllable Events). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Employment and Non-Competition Agreements.</I></FONT><FONT SIZE=2> The employees of Company set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;5.13</I></FONT><FONT SIZE=2> shall have accepted employment with Parent and shall have entered
into an Employment and Non-Competition Agreement in
the form attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;F</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;</FONT><FONT
SIZE=2><I>Action Under Stock Option Plans.</I></FONT><FONT SIZE=2> The Board of Directors of Company shall have taken all action necessary to prevent
the cancellation or termination of options under the Company Stock Option Plans upon the closing of the Merger and to allow such options to be assumed by Parent as described in Section&nbsp;5.9. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;</FONT><FONT
SIZE=2><I>Warrants.</I></FONT><FONT SIZE=2> All outstanding warrants to acquire Company capital stock shall have been exercised in accordance with
their terms. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Asset Sale.</I></FONT><FONT SIZE=2> All of the conditions to closing set forth in the Asset Purchase Agreement shall have been satisfied. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Dissenters' Rights.</I></FONT><FONT SIZE=2> Holders of not more than 5%, or in the case that NEC Corporation is a dissenting shareholder,
14.9%, of the shares of Company Common Stock shall have not voted in favor of the Merger or not consented thereto in writing and shall have delivered prior to the Effective Time timely written notice
of such holder's intent to demand payment as a dissenting shareholder for such shares in accordance with Washington Law. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>36</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;</FONT><FONT SIZE=2><I>Waivers.</I></FONT><FONT SIZE=2> Each individual listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;5.9(f)</I></FONT><FONT SIZE=2> hereto and
any Interviewed Employee (as defined below) who agrees to remain an employee of Parent after the Closing shall have executed a Waiver and accepted employment with Parent and delivered a Waiver and a
transition letter to Parent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Notice to Employees.</I></FONT><FONT SIZE=2> Company shall have provided a Notice to Transferred Employees to each of the employees listed
on </FONT><FONT SIZE=2><I>Schedule&nbsp;5.15</I></FONT><FONT SIZE=2> and each such employee listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;5.15(a)</I></FONT><FONT SIZE=2> shall have executed a
General Release and Non-Competition Agreement in the form attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;I</I></FONT><FONT SIZE=2>, and each such employee listed on </FONT> <FONT SIZE=2><I>Schedule&nbsp;5.15(b)</I></FONT><FONT SIZE=2> shall
have executed a General Release in one of the forms attached hereto as </FONT> <FONT SIZE=2><I>Exhibit&nbsp;J</I></FONT><FONT SIZE=2>, which shall have been delivered to Parent. Prior to the Closing, Parent may interview and consider for employment
and may, in its sole
discretion, offer employment to any of the employees of Company listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;5.15(b)</I></FONT><FONT SIZE=2> (the "Interviewed Employees") upon such terms and
conditions determined by Parent. In the event that any Interviewed Employee is offered employment by Parent and accepts an offer of employment with Parent prior to the Closing, such employee shall
fulfill the conditions of Section&nbsp;6.3(k) prior to the Closing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;</FONT><FONT
SIZE=2><I>Spreadsheet.</I></FONT><FONT SIZE=2> Parent shall have received the Spreadsheet, which shall have been certified as true and correct by an
authorized officer of Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;</FONT><FONT
SIZE=2><I>Amendment of Stock Option Plans.</I></FONT><FONT SIZE=2> Company shall have amended the Company Stock Option Plans and all options
outstanding under such Company Stock Option Plans to give each optionee a thirty
(30)&nbsp;day period following his or her termination of employment to exercise his or her option and shall have sent each optionee a notice of such change in form and substance satisfactory to
Parent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;</FONT><FONT
SIZE=2><I>OEM Agreement.</I></FONT><FONT SIZE=2> The Original Equipment Manufacturer Agreement, dated as of October&nbsp;31, 2000 by and between
Parent and Company shall be in full force and effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;</FONT><FONT
SIZE=2><I>Line of Credit.</I></FONT><FONT SIZE=2> Company shall provide evidence in a form satisfactory to Parent that there are no amounts
outstanding under the Line of Credit. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;</FONT><FONT
SIZE=2><I>Termination of Company ESPP.</I></FONT><FONT SIZE=2> The Board of Directors of Company shall have taken all action necessary to terminate
the Company ESPP immediately following the December&nbsp;31, 2000 purchase date under such plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;</FONT><FONT
SIZE=2><I>Termination of Consultants and Independent Contractors.</I></FONT><FONT SIZE=2> Prior to the Closing Date, the Company shall have terminated
each agreement in effect for each consultant and independent contractor, other than those listed in Schedule&nbsp;6.3(r), consistent with the termination provisions of each such agreement; and the
Company shall have satisfied all termination liabilities existing under such agreements prior to the Closing Date by sufficient notice of termination or otherwise. </FONT></P>

<BR>
</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_article_vii_termination,_amendment_and_waiver"> </A></FONT> <FONT SIZE=2><B>ARTICLE VII<BR>  TERMINATION, AMENDMENT AND WAIVER         </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Termination.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;At any time prior to the Effective Time, whether before or after approval of the
matters presented in connection with the Merger by the stockholders of Company, this Agreement may be terminated: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;by
mutual consent of Parent and Company; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;by
either Parent or Company, if, without fault of the terminating party, the Closing shall not have occurred on or before February&nbsp;28, 2001 or such later
date as may be agreed upon in writing by the parties hereto (the "Final Date"); </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that the Final </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>37</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>
Date shall be extended to March&nbsp;30, 2001 in the event that if the only reason the Closing shall not have occurred by February&nbsp;28, 2001 is the failure of the conditions set forth in
Section&nbsp;6.1(b) and/or Section&nbsp;6.1(d) (although such extension shall not occur if the failure of such conditions has been caused or resulted from one party's action or failure to act
constituting a breach of this Agreement and the other party does not consent to such extension); and </FONT><FONT SIZE=2><I>provided further</I></FONT><FONT SIZE=2> that the right to terminate this
Agreement under this Section&nbsp;7.1(b) shall not be available to any party whose action or failure to act has been the cause of or resulted in the failure of the Merger to occur on or before such
date and such action or failure to act constitutes a breach of this Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;by
Parent, if (i)&nbsp;Company shall breach any of its representations, warranties or obligations hereunder to an extent that would cause the condition set forth
in Section&nbsp;6.3(a) not to be satisfied and such breach shall not have been cured within ten (10)&nbsp;business days of receipt by Company of written notice of such breach (and Parent shall not
have willfully breached any of its covenants hereunder, which breach is not cured), (ii)&nbsp;the Board of Directors of Company shall have withdrawn or modified its recommendation of this Agreement
or the Merger in a manner adverse to Parent or shall have resolved to do any of the foregoing, (iii)&nbsp;Company shall have failed to comply with Section&nbsp;4.3, (iv)&nbsp;the Board of
Directors of Company shall have recommended, endorsed, accepted or agreed to a Takeover Proposal or shall have resolved to do so, or (v)&nbsp;for any reason Company fails to call and hold the
Company Stockholders Meeting by February&nbsp;14, 2001 or in the event the condition set forth in Section&nbsp;6.1(b) shall not have been satisfied by February&nbsp;14, 2001 under circumstances
in which it can be reasonably expected that the Final Date will be extended pursuant to the proviso set forth in Section&nbsp;7.1(b), March&nbsp;15, 2001; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;by
Company, if Parent shall breach any of its representations, warranties or obligations hereunder to an extent that would cause the condition set forth in
Section&nbsp;6.2(a) not to be satisfied and such breach shall not have been cured within ten (10)&nbsp;business days following receipt by Parent of written notice of such breach (and Company shall
not have willfully breached any of its covenants hereunder, which breach is not cured); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;by
Parent if a Trigger Event (as defined in Section&nbsp;7.3(e)) or Takeover Proposal shall have occurred and the Board of Directors of Company in connection
therewith, does not within ten (10)&nbsp;business days of such occurrence (i)&nbsp;reconfirm its approval and recommendation of this Agreement and the transactions contemplated hereby, and
(ii)&nbsp;reject such Takeover Proposal or Trigger Event (in the case of a Trigger Event involving a tender or exchange offer); or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;by
either Parent or Company if (i)&nbsp;any permanent injunction or other order of a court or other competent authority preventing the consummation of the Merger
shall have become final and nonappealable or (ii)&nbsp;any required approval of the stockholders of Company shall not have been obtained by reason of the failure to obtain the required vote upon a
vote held at a duly held meeting of stockholders or at any adjournment thereof (provided that the right to terminate this Agreement under this subsection (ii)&nbsp;shall not be available to Company
where the failure to obtain such stockholder approval shall have been caused by the action or failure to act of Company and such action or failure constitutes a breach by Company of this Agreement). </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Effect of Termination.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;In the event of termination of this Agreement as provided in
Section&nbsp;7.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Parent, Merger Sub or Company or their respective officers, directors,
stockholders or affiliates, except to the extent that such termination results from the breach by a party hereto of any of its representations, warranties or covenants set forth in this Agreement;
provided that, the provisions of </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>38</FONT></P>

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<P><FONT SIZE=2>
Section&nbsp;5.4 (Confidentiality), Section&nbsp;7.3 (Expenses and Termination Fees), this Section&nbsp;7.2 and Section&nbsp;8.1 shall remain in full force and effect and survive any
termination of this Agreement. Nothing herein shall relieve any party from liability in connection with a breach by such party of the representations, warranties or covenants of such party to this
Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Expenses and Termination Fees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Subject
to subsections (b), (c), (d) and (e) of this Section&nbsp;7.3, whether or not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby (including, without limitation, the fees and expenses of its advisers, accountants and legal counsel) shall be paid by the party incurring
such expense, except that expenses incurred in connection with printing the Proxy Materials and the Registration Statement, registration and filing fees incurred in connection with the Registration
Statement, the Proxy Materials and the listing of additional shares pursuant to Section&nbsp;6.1(f) and fees, costs and expenses associated with compliance with applicable state securities laws in
connection with the Merger shall be shared equally by Company and Parent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In
the event that (i)&nbsp;Parent shall terminate this Agreement pursuant to Section&nbsp;7.1(e); (ii)&nbsp;Parent shall terminate this Agreement pursuant to
Section&nbsp;7.1(c)(iii)&nbsp;as a result of the failure by Company, its
stockholders who are parties to the Stockholder Agreements, and each of their respective directors, officers, employees, affiliates and controlling persons, or any person authorized by such persons,
to comply with the requirements of Section&nbsp;4.3; (iii)&nbsp;Parent shall terminate this Agreement pursuant to Section&nbsp;7.1(c)(iv); (iv)&nbsp;Parent (or in the case of
Section&nbsp;7.1(f)(ii), Company) shall terminate this Agreement pursuant to Section&nbsp;7.1(c)(ii)&nbsp;or 7.1(f)(ii)&nbsp;and, prior to such withdrawal, modification or stockholder
rejection, there shall have been (A)&nbsp;a Trigger Event with respect to Company or (B)&nbsp;a Takeover Proposal with respect to Company which at the time of such withdrawal, modification or
stockholder rejection shall not have been rejected by Company; or (v)&nbsp;Parent (or in the case of Section&nbsp;7.1(b), Company) shall terminate this Agreement pursuant to Section&nbsp;7.1(b),
7.1(c)(i)&nbsp;or 7.1(c)(v)&nbsp;due in whole or in part to any failure by Company to use its reasonable best efforts to perform and comply with all agreements and conditions required by this
Agreement to be performed or complied with by Company prior to or on the Closing Date or any failure by Company's affiliates to take any actions required to be taken hereby, and prior thereto there
shall have been (A)&nbsp;a Trigger Event with respect to Company or (B)&nbsp;a Takeover Proposal with respect to Company which shall not have been rejected by Company, then Company shall promptly
reimburse Parent for all of the out-of-pocket costs and expenses incurred by Parent in connection with this Agreement and the transactions contemplated hereby (including,
without limitation, the fees and expenses of its advisors, accountants and legal counsel), and, in addition to any other remedies Parent may have, Company shall promptly pay to Parent the sum of
$10,300,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;In
the event that (i)&nbsp;Parent shall terminate this Agreement pursuant to Section&nbsp;7.1(c)(i)&nbsp;or 7.1(c)(v)&nbsp;under circumstances not described
in Section&nbsp;7.3(b)(v); or (ii)&nbsp;Parent shall terminate this Agreement pursuant to Section&nbsp;7.1(c)(ii)&nbsp;or 7.1(f)(ii)&nbsp;(under circumstances not described in
Section&nbsp;7.3(b)(iv)), Company shall promptly reimburse Parent for all of the out-of-pocket costs and expenses incurred by Parent in connection with this Agreement and the
transactions contemplated hereby (including, without limitation, the fees and expenses of its advisors, accountants and legal counsel); and, in the event (A)&nbsp;any Takeover Proposal or Trigger
Event is, within twelve months of the later of (x)&nbsp;such termination of this Agreement and (y)&nbsp;the payment of the above described expenses, consummated (as defined in
Section&nbsp;7.3(g)) by or with any person (or any affiliate of any person) that made a Takeover Proposal prior to termination of this Agreement or that caused a Trigger Event prior to such
termination, or (B)&nbsp;any other Takeover Proposal or Trigger </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>39</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>
Event not described in clause&nbsp;(A) is consummated (as defined in Section&nbsp;7.3(g)) within six months of the later of (x)&nbsp;such termination of this Agreement and (y)&nbsp;the payment
of the above-described expenses, Company shall promptly pay to Parent the sum of $10,300,000 (less any amounts paid by Company to Parent under Section&nbsp;7.3(b)). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;In
the event that Company shall terminate this Agreement pursuant to Section&nbsp;7.1(d) Parent shall promptly reimburse Company for all of the
out-of-pocket costs and expenses incurred by Company in
connection with this Agreement and the transactions contemplated hereby (including, without limitation, the fees and expenses of its advisors, accountants and legal counsel). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;As
used herein, a "Trigger Event" shall occur if any Person (as that term is defined in Section&nbsp;13(d) of the Exchange Act and the regulations promulgated
thereunder) acquires securities representing 15%, or in the case of NEC Corporation, 19.9%, or more, or commences a tender or exchange offer, open market purchase program or other publicly announced
initiative following the successful consummation of which the offeror and its affiliate would beneficially own securities representing 15%, or in the case of NEC Corporation, 19.9%, or more, of the
voting power of Company; provided, however, a Trigger Event shall not be deemed to include the acquisition by any Person of securities representing 15%, or in the case of NEC Corporation, 19.9%, or
more of Company if such Person has acquired such securities not with the purpose nor with the effect of changing or influencing the control of Company, nor in connection with or as a participant in
any transaction having such purpose or effect, including without limitation not in connection with such Person (i)&nbsp;making any public announcement with respect to the voting of such shares at
any meeting to consider any merger, consolidation, sale of substantial assets or other business combination or extraordinary transaction involving Company; (ii)&nbsp;making, or in any way
participating in, any "solicitation" of "proxies" (as such terms are defined or used in Regulation&nbsp;14A under the Exchange Act) to vote any voting securities of Company (including, without
limitation, any such solicitation subject to Rule&nbsp;14a-11 under the Exchange Act) or seeking to advise or influence any Person with respect to the voting of any voting securities of
Company, directly or indirectly, relating to a merger or other business combination involving Company or the sale or transfer of a significant portion of assets (excluding the sale or disposition of
assets in the ordinary course of business) of Company; (iii)&nbsp;forming, joining or in any way participating in any "group" within the meaning of Section&nbsp;13(d)(3) of the Exchange Act with
respect to any voting securities of Company, directly or indirectly, relating to a merger or other business combination involving Company or the sale or transfer of a significant portion of assets
(excluding the sale or disposition of assets in the ordinary course of business) of Company; or (iv)&nbsp;otherwise acting, alone or in concert with others, to seek control of Company or to seek to
control or influence the management or policies of Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;For
purposes of this Agreement, "Takeover Proposal" means any offer or proposal for, or any indication of interest in, a merger or other business combination
involving Company or any of its subsidiaries or the acquisition of 15%, or in the case of NEC Corporation, 19.9%, or more of the outstanding shares of capital stock of Company, or a significant
portion of the assets of, Company or any of its subsidiaries, other than the transactions contemplated by this Agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;For
purposes of Section&nbsp;7.3(c) above, (A)&nbsp;"consummation" of a Takeover Proposal shall occur on the date a written agreement is entered into with
respect to a merger or other business combination involving Company or the acquisition of 15%, or in the case of NEC Corporation, 19.9%, or more of the outstanding shares of capital stock of Company,
or sale or transfer of any material assets (excluding the sale or disposition of assets in the ordinary course of business) of Company or any of its subsidiaries and (B)&nbsp;"consummation" of a </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>40</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>
Trigger Event shall occur on the date any Person (other than any stockholder which currently owns 15% or more of the outstanding shares of capital stock of Company provided such shareholder does not
increase its ownership) or any of its affiliates or associates would beneficially own securities representing 15%, or in the case of NEC Corporation, 19.9%, or more of the voting power of Company,
following a tender or exchange offer. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Amendment.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The boards of directors of the parties hereto may cause this Agreement to be amended at
any time by execution of an instrument in writing signed on behalf of each of the parties hereto; provided that an amendment made subsequent to adoption of the Agreement by the stockholders of Company
or Merger Sub shall not (i)&nbsp;alter or change the amount or kind of consideration to be received on conversion of the Company Common Stock, (ii)&nbsp;alter or change any term of the Certificate
of Incorporation of the Surviving Corporation to be effected by the Merger, or (iii)&nbsp;alter or change any of the terms and conditions of the Agreement if such alteration or change would
materially adversely affect the holders of Company Common Stock or Merger Sub Common Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Extension; Waiver.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;At any time prior to the Effective Time any party hereto may, to the extent
legally allowed, (i)&nbsp;extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii)&nbsp;waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered pursuant hereto and (iii)&nbsp;waive compliance with any of the agreements or conditions for the benefit of such party
contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. </FONT></P>

<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_article_viii_general_provisions"> </A></FONT> <FONT SIZE=2><B>ARTICLE VIII<BR>  GENERAL PROVISIONS         </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Non-Survival at Effective Time.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The representations, warranties and agreements set
forth in this Agreement shall terminate at the Effective Time, except that the agreements set forth in Article&nbsp;I, Section&nbsp;5.4 (Confidentiality), 5.10 (Forms S-3 and
S-8), 5.17 (Indemnification), 5.20 (Best Efforts and Further Assurances), 7.3 (Expenses and Termination Fees), 7.4 (Amendment), and this Article&nbsp;VIII shall survive the Effective
Time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Notices.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;All notices and other communications hereunder shall be in writing and shall be deemed
given if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile (with confirmation of receipt) to the
parties at the following address (or at such other address for a party as shall be specified by like notice): </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>(a)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="92%"><FONT SIZE=2>if to Parent or Merger Sub, to:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="92%"><FONT SIZE=2>&nbsp;<BR>
Cisco Systems,&nbsp;Inc.<BR>
170 West Tasman Drive<BR>
San Jose, CA 95134<BR>
Attention: Senior Vice President, Legal and Government Affairs<BR>
Facsimile No.:(408)&nbsp;526-5926<BR>
Telephone No.: (408)&nbsp;526-8252<BR>
&nbsp;<BR></FONT>
</TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=2>41</FONT></P>

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<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="92%"><FONT SIZE=2>with a copy to:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="92%"><FONT SIZE=2>&nbsp;<BR>
Brobeck, Phleger&nbsp;&amp; Harrison LLP<BR>
2200 Geng Road<BR>
Two Embarcadero Place<BR>
Palo Alto, CA 94303<BR>
Attention: Therese A. Mrozek, Esq.<BR>
Facsimile No.: (650)&nbsp;496-2885<BR>
Telephone No.: (650)&nbsp;424-0160</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;<BR>
(b)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="92%"><FONT SIZE=2>&nbsp;<BR>
if to Company, to:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="92%"><FONT SIZE=2>&nbsp;<BR>
Active Voice Corporation<BR>
2901 Third Avenue, Suite 500<BR>
Seattle, Washington 98121-9800<BR>
Attention: Chief Executive Officer<BR>
Facsimile No.: (206)&nbsp;441-4784<BR>
Telephone No.: (206)&nbsp;441-4700</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="92%"><FONT SIZE=2>&nbsp;<BR>
with a copy to:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="92%"><FONT SIZE=2>&nbsp;<BR>
Gray Cary Ware&nbsp;&amp; Freidenrich LLP<BR>
999 Third Avenue, Suite 4000<BR>
Seattle, Washington 98104-4099<BR>
Attention: John M. Steel, Esq.<BR>
Facsimile No.: (206)&nbsp;839-4801<BR>
Telephone No.: (206)&nbsp;839-4800<BR></FONT>
</TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Interpretation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;When a reference is made in this Agreement to Exhibits or Schedules, such reference
shall be to an Exhibit or Schedule to this Agreement unless otherwise indicated. The words "include," "includes" and "including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The phrase "made available" in this Agreement shall mean that the information referred to has been made available if requested by the party to whom such information is to
be made available. The phrases "the date of this Agreement", "the date hereof", and terms of similar import, unless the context otherwise requires, shall be deemed to refer to November&nbsp;9, 2000.
The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Counterparts.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;This Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Entire Agreement; Nonassignability; Parties in Interest.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;This Agreement and the documents and
instruments and other agreements specifically referred to herein or delivered pursuant hereto, including the Exhibits, the Schedules, including the Company Disclosure Schedule and the Parent
Disclosure Schedule&nbsp;(a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, except for the Confidentiality Agreement, which shall continue in full force and effect, and shall survive any termination of this
Agreement or the Closing, in accordance with its terms; (b)&nbsp;are not intended to confer upon any other person any rights or remedies hereunder, except as set forth in Sections 1.6(a)-(c) and
(f), 1.7-1.9, 5.9, 5.10, 5.12 and 5.17; and (c)&nbsp;shall not be assigned by operation of law or otherwise except as otherwise specifically provided. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>42</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;8.6</FONT><FONT SIZE=2><I>&nbsp;&nbsp;Severability.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;In the event that any provision of this Agreement, or the application thereof,
becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision
of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Remedies Cumulative.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Except as otherwise provided herein, any and all remedies herein expressly
conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will
not preclude the exercise of any other remedy. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Governing Law.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;This Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to the laws that might otherwise govern under applicable principles of conflicts of law. Each of the parties hereto irrevocably consents to the exclusive jurisdiction
of any court located within the State of California in connection with any matter based upon or arising out of this Agreement or the matters contemplated herein, agrees that process may be served upon
them in any manner authorized by the laws of the State of California for such persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction
and such process. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;8.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;Rules of Construction.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;The parties hereto agree that they have been represented by counsel during
the negotiation, preparation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or document. </FONT></P>

<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc2043_"> </A></FONT> <FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>[Signature page follows]</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>43</FONT></P>

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<BR>

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, Company, Parent and Merger Sub have caused this Agreement and Plan of Merger and Reorganization to be executed and delivered by their respective officers thereunto
duly authorized, all as of the date first written above. </FONT></P>

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<TD WIDTH="51%" COLSPAN=2><FONT SIZE=2>ACTIVE VOICE CORPORATION</FONT></TD>
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<TD WIDTH="46%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
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<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=2><FONT SIZE=2>&nbsp;<BR></FONT> <FONT SIZE=2>CISCO SYSTEMS, INC.</FONT></TD>
</TR>
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<TD WIDTH="46%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=2><FONT SIZE=2>&nbsp;<BR>
BY:<BR></FONT>
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<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=2><FONT SIZE=2>Name:</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=2><FONT SIZE=2>Title:</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=2><FONT SIZE=2>&nbsp;<BR></FONT> <FONT SIZE=2>AQUA ACQUISITION CORPORATION</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;<BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;<BR>&nbsp;</FONT></TD>
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BY:<BR></FONT>
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<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=2><FONT SIZE=2>Name:</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%" COLSPAN=2><FONT SIZE=2>Title:</FONT><HR NOSHADE></TD>
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<P ALIGN="CENTER"><FONT SIZE=2><B>[SIGNATURE PAGE TO AGREEMENT AND<BR>
PLAN OF MERGER AND REORGANIZATION]  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>44</FONT></P>

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<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#kb2043_agreement_and_plan_of_merger_a__agr05790">AGREEMENT AND PLAN OF MERGER AND REORGANIZATION BY AND AMONG CISCO SYSTEMS, INC., AQUA ACQUISITION CORPORATION AND ACTIVE VOICE CORPORATION November 9, 2000</A></FONT><BR>
<FONT SIZE=2><A HREF="#kb2043_table_of_contents">TABLE OF CONTENTS</A></FONT><BR>
<!-- TOC_END -->
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#kc2043_agreement_and_plan_of_merger_and_reorganization">AGREEMENT AND PLAN OF MERGER AND REORGANIZATION</A></FONT><BR>
<FONT SIZE=2><A HREF="#kc2043_recitals">RECITALS</A></FONT><BR>
<FONT SIZE=2><A HREF="#kc2043_article_i_the_merger">ARTICLE I THE MERGER</A></FONT><BR>
<FONT SIZE=2><A HREF="#kc2043_article_ii_representations_and_warranties_of_company">ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY</A></FONT><BR>
<FONT SIZE=2><A HREF="#kc2043_article_iii_representations_an__art02730">ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB</A></FONT><BR>
<FONT SIZE=2><A HREF="#kc2043_article_iv_conduct_prior_to_the_effective_time">ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME</A></FONT><BR>
<FONT SIZE=2><A HREF="#kc2043_article_v_additional_agreements">ARTICLE V ADDITIONAL AGREEMENTS</A></FONT><BR>
<FONT SIZE=2><A HREF="#kc2043_article_vi_conditions_to_the_merger">ARTICLE VI CONDITIONS TO THE MERGER</A></FONT><BR>
<FONT SIZE=2><A HREF="#kc2043_article_vii_termination,_amendment_and_waiver">ARTICLE VII TERMINATION, AMENDMENT AND WAIVER</A></FONT><BR>
<FONT SIZE=2><A HREF="#kc2043_article_viii_general_provisions">ARTICLE VIII GENERAL PROVISIONS</A></FONT><BR>
<FONT SIZE=2><A HREF="#kc2043_"></A></FONT><BR>
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<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>a2031672zex-99_1.htm
<DESCRIPTION>EX-99.1
<TEXT>

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<font size=3> -- Click here to rapidly navigate through this document</font>
<H2><FONT SIZE=2> </FONT></H2>
<P ALIGN="RIGHT"><FONT SIZE=2>Exhibit&nbsp;99.1 </FONT></P>

<BR>

<P><FONT SIZE=2><A
NAME="ke2043_the_following_press_release_wa__the02126"> </A></FONT> <FONT SIZE=2><B>The following press release was published on November&nbsp;10, 2000         </B></FONT></P>

<P><FONT SIZE=2><A
NAME="ke2043_press_release"> </A></FONT> <FONT SIZE=2><B>Press Release         </B></FONT></P>

<P><FONT SIZE=2><A
NAME="ke2043_active_voice_corporatio__ke202351"> </A></FONT> <FONT SIZE=2><B>Active Voice Corporation to be Acquired by Cisco Systems         </B></FONT></P>

<P><FONT SIZE=2><B>November 10, 2000<BR>  </B></FONT><FONT SIZE=2>(Seattle, Washington, USA &#151; November 10, 2000) &#151; </FONT></P>


<P><FONT SIZE=2>Active
Voice Corporation (NASDAQ:ACVC), a world leader in providing unified messaging and computer telephony software solutions, today announced that it has entered into a definitive agreement to be
acquired by Cisco Systems, Inc. The acquisition of Active Voice supports Cisco's vision to deliver unified communications and a single, end-to-end Internet Protocol (IP) network combining data, voice,
and video for the corporate enterprise. </FONT></P>

<P><FONT SIZE=2>Under
the terms of the agreement, Cisco will pay approximately $266 million in stock for Active Voice's Unity&#153; operation comprised of IP-based unified messaging solutions. Cisco will also
pay approximately $30 million in stock for Active Voice's circuit switched PBX voicemail solutions, which will be sold after the acquisition closes, to a newly formed entity comprised of former Active
Voice employees for $30 million. The purchase price will be shared by all Active Voice security holders. As of November 9, 2000, there were approximately 14.8 million shares of Active Voice
outstanding on a fully diluted basis. The acquisition will be accounted for as a purchase and is expected to be complete in the second quarter of Cisco's fiscal year 2001. In connection with the
acquisition, Cisco expects a one-time charge for purchased in-process research and development expenses not to exceed $0.02 per share. The acquisition has been approved by the board of directors of
each company and is subject to various closing conditions including Active Voice shareholder approval and approval under the Hart Scott Rodino Antitrust Improvements Act. </FONT></P>

<P><FONT SIZE=2>The
growth of the IP telephony market is accelerating. The acquisition of Active Voice's Unity operation represents an important step in the advancement of Cisco's Architecture for Voice, Video,
and Integrated Data (AVVID) and underscores Cisco's commitment to delivering unified communications capabilities to the enterprise. </FONT></P>

<P><FONT SIZE=2>"The
acquisition of Active Voice represents an exciting opportunity," says Frank J. Costa, Active Voice's CEO and president. "I congratulate our entire team on their tremendous accomplishment in
delivering a unified messaging product that will accelerate the adoption of new IP telephony communications systems, while also supporting our customer's current investments with superior circuit
switch integration, and dual IP/PBX support." </FONT></P>

<P><FONT SIZE=2>Active
Voice's Unity product offerings complement Cisco's existing IP-based voice solutions by providing advanced capabilities that enable the unification of both text and voice. Cisco and Active
Voice believe these types of applications will help continue to drive adoption of IP telephony. The acquisition of Active Voice's Unity operation brings Cisco a step closer to delivering unified
communications solutions that will help enterprises enhance employee productivity, lower cost of ownership, and provide better customer care. Active Voice's Unity team will be led by Active Voice
chief technology officer and vice president of advanced products, Kevin Chestnut, and will report to David Kirk, senior vice president, Cisco's Internet Communications Software Group. </FONT></P>


<P><FONT SIZE=2>The
newly formed entity will continue to operate independently and will sell and support Active Voice's other product lines including Repartee, PhoneSoft, Replay, Replay Plus, Lingo, all embedded
solutions, and the Pronexus subsidiary's IVR products. </FONT></P>

<P><FONT SIZE=2>About
Active Voice Corporation </FONT></P>

<P><FONT SIZE=2>Founded
in 1983, Active Voice is a world leader in unified messaging and computer telephony software solutions. The Seattle-based company has offices in Australia, Canada, China, France, Germany,
Italy, Sweden, The Netherlands, and the United Kingdom&#151;with more than 100,000 systems installed in virtually every kind of business in over 60 countries. Active Voice' award-winning
products are sold </FONT></P>

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<P><FONT SIZE=2>
through a global network of independent telecommunications manufacturers, dealers, and computer resellers, as well as through strategic partnerships with industry leaders. For more information, visit
our Web site at <U>www.activevoice.com,</U> </FONT></P>

<P><FONT SIZE=2>For
more information please contact the following:<BR>
Public Relations: Monica Drake, 1-206-441-4700, ext. 1154, <U>pr@activevoice.com</U><BR>
Investor Relations: Amy Thomas, 1-206-441-4700, ext. 1197, <U>ir@activevoice.com</U><BR>
Web Site: <U>www.activevoice.com</U>. </FONT></P>

<P><FONT SIZE=2>Brand
and product names in this document are trademarks of their respective owners. </FONT></P>

<P><FONT SIZE=2><I>SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF&nbsp;1995  </I></FONT></P>

<P><FONT SIZE=2><I>This press release contains forward-looking statements within the meaning of the federal securities laws and is subject to its safe harbors. The forward
looking statements reflect management's forecast of certain aspects of the Company's future. They are based on current information that we have assessed, but which by its nature is dynamic and subject
to rapid and even abrupt changes. Forward-looking statements include, but are not limited to statements regarding: (a) the estimated completion of the proposed transaction and (b)&nbsp;the
transition. The following are among the risk factors that may cause actual results to differ materially from the forward-looking statements: The following, while not inclusive, are among the risk
factors that may cause actual results to differ materially from the forward-looking statements: competitive pressures from new entrants to the CTI market, including large software companies and
telephone switch manufacturers with greater resources, the introduction of new products by our competitors, increasing price competition in the marketplace; unanticipated delays in releasing new
products, unanticipated delays in new product development, increases in research and development spending, and the increase in our international sales may require notable increases in development
spending associated with localization of products for foreign markets.  </I></FONT></P>

<P><FONT SIZE=2><I>Other potential risks and uncertainties and other factors are discussed in more depth in Active Voice's filings with the U.S. Securities and Exchange
Commission (the "SEC"), copies of which may be accessed through the SEC's web site at http://www.sec.gov.  </I></FONT></P>

<P><FONT SIZE=2><I>WHERE YOU CAN FIND ADDITIONAL INFORMATION  </I></FONT></P>

<P><FONT SIZE=2><I>Investors and security holders of Active Voice are advised to read the proxy statement/prospectus regarding the business combination transaction
referenced in the foregoing information, when it becomes available, because it will contain important information. Active Voice intends to mail a proxy statement/prospectus about the transaction to
its shareholders containing information about the merger. Active Voice will be filing a proxy statement/prospectus and other relevant documents concerning the proposed merger with the SEC. Investors
should read the proxy statement/prospectus before making any voting or investment decisions. Investors will be able to obtain the documents free of charge at the SEC's Web site, www.sec.gov or at the
SEC's public reference room at 450 Fifth Street, N.W., Washington D.C. 20549 or at the SEC's other public reference rooms in New York, New York, and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on public reference rooms. In addition, documents filed with the SEC by Active Voice may also be obtained free of charge by contacting Active Voice and directing
such requests to the Investor Relations director at the address listed above.  </I></FONT></P>

<P><FONT SIZE=2><I>Active Voice and its directors, executive officers and certain other employees may be deemed to be participants in the solicitation of proxies from
Active Voice's shareholders with respect to the transaction contemplated by the definitive agreement. Information regarding the identity of these persons, and their
interests in the solicitation, is set forth in Active Voice's proxy statement for its 2000 annual meeting of shareholders and is available free of charge at the SEC Web site and public reference rooms
and from the contact named above. In addition, Cisco and certain employees of Cisco, including vice-presidents Ammar Hanafi, Art Rangel and Eugene Lee, may be deemed to have participated in the
solicitation of proxies from Active Voice's shareholders in favor of the adoption of the merger agreement. Information concerning Cisco's directors and executive officers is set forth in Cisco's proxy
statement for its 2000 annual meeting of shareholders.  </I></FONT></P>

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<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#ke2043_the_following_press_release_wa__the02126">The following press release was published on November 10, 2000</A></FONT><BR>
<FONT SIZE=2><A HREF="#ke2043_press_release">Press Release</A></FONT><BR>
<FONT SIZE=2><A HREF="#ke2043_active_voice_corporatio__ke202351">Active Voice Corporation to be Acquired by Cisco Systems</A></FONT><BR>

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