Preview | Agreement and Plan of Reorganization |

TABLE OF CONTENTS


			Page
1.	Definitions			1

2.	The Merger			7

	2.1	The Merger		7
	2.2	Closing; Effective Time		7
	2.3	Effect of the Merger		7
	2.4	Certificate of Incorporation; Bylaws		7
	2.5	Directors and Officers		7
	2.6	Effect on Capital Stock		8
	2.7	Surrender of Certificates		9
	2.8	No Further Ownership Rights in Target Capital Stock		10
	2.9	Lost, Stolen or Destroyed Certificates		10
	2.10	Taking of Necessary Action; Further Action		11

3.	Representations and Warranties of Target			13

	3.1	Organization, Standing and Power		13
	3.2	Authority		13
	3.3	Governmental Authorization		14
	3.4	Financial Statements		14
	3.5	Capital Structure		15
	3.6	Absence of Certain Changes		16
	3.7	Absence of Undisclosed Liabilities		17
	3.8	Litigation		18
	3.9	Restrictions on Business Activities		18
	3.10	Intellectual Property		18
	3.11	Interested Party Transactions		21
	3.12	Minute Books		22
	3.13	Complete Copies of Materials		22
	3.14	Material Contracts		22
	3.15	Inventory		23
	3.16	Accounts Receivable		23
	3.17	Customers and Suppliers		23
	3.18	Employees and Consultants		24
	3.19	Title to Property		24
	3.20	Environmental Matters		25
	3.21	Taxes		26
	3.22	Employee Benefit Plans		27
	3.23	Employee Matters		30
	3.24	Insurance		30
	3.25	Compliance With Laws		31
	3.26	Brokers and Finders Fee		31
	3.27	Privacy Policies.		31
	3.28	International Trade Matters		31
	3.29	Representations Complete		32

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TABLE OF CONTENTS
(continued)


			Page
4.	Representations and Warranties of Acquiror and Merger Sub			32

	4.1	Organization, Standing and Power		32
	4.2	Authority		32
	4.3	Litigation		33
	4.4	Interim Operations of Merger Sub		33
	4.5	Brokers and Finders Fee		33
	4.6	Representations Complete		33

5.	Conduct Prior to the Effective Time			33

	5.1	Conduct of Business of Target		33
	5.2	No Solicitation		36

6.	Additional Agreements			36

	6.1	Preparation of Information Statement		36
	6.2	Approval of Stockholders		37
	6.3	Access to Information		37
	6.4	Confidentiality		38
	6.5	Public Disclosure		38
	6.6	Regulatory Approval; Further Assurances		38
	6.7	Target Options		39
	6.8	Intentionally Omitted		39
	6.9	Escrow Agreement		39
	6.10	Employees		40
	6.11	Termination of 401(k) Plan		40
	6.12	Expenses		40

7.	Conditions to the Merger			40

	7.1	Conditions to Obligations of Each Party to Effect the Merger		40
	7.2	Additional Conditions to the Obligations of Acquiror and Merger Sub		41
	7.3	Additional Conditions to Obligations of Target		42

8.	Termination, Amendment and Waiver			43

	8.1	Termination		43
	8.2	Effect of Termination		44
	8.3	Amendment		44
	8.4	Extension; Waiver		44

9.	Escrow and Indemnification			44

	9.1	Escrow Fund		44
	9.2	Indemnification		44
	9.3	Escrow Period; Release From Escrow		45

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TABLE OF CONTENTS
(continued)


			Page
	9.4	Claims Upon Escrow Fund		46
	9.5	Objections to Claims		46
	9.6	Resolution of Conflicts and Arbitration		46
	9.7	Stockholders Agent		47
	9.8	Actions of the Stockholders Agent		48
	9.9	Third-Party Claims		48

10.	General Provisions			48

	10.1	Notices		48
	10.2	Definitions		50
	10.3	Counterparts		50
	10.4	Entire Agreement; Nonassignability; Parties in Interest		50
	10.5	Severability		50
	10.6	Remedies Cumulative		51
	10.7	Governing Law		51
	10.8	Rules of Construction		51
	10.9	Amendment; Waiver		51
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AGREEMENT AND PLAN OF REORGANIZATION

This AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made and entered into as of May 8, 2006 by and among Packeteer, Inc., a Delaware corporation (Acquiror), Oslo Acquisition Corporation, a Delaware corporation (Merger Sub) and wholly owned subsidiary of Acquiror, Tacit Networks, Inc., a Delaware corporation (Target), and, solely with respect to Sections 6.9 and 9 hereof, Vikram Gupta, as the agent for Target stockholders (Stockholders Agent).

RECITALS

A. The Boards of Directors of Target, Acquiror and Merger Sub believe it is in the best interests of their respective companies and the stockholders of their respective companies that Target and Merger Sub combine into a single company through the statutory merger of Merger Sub with and into Target (the Merger) and, in furtherance thereof, have approved the Merger.

B. Pursuant to the Merger, among other things, the outstanding shares of Target preferred stock, $0.001 par value (Target Preferred Stock), and Target common stock, $0.001 par value (Target Common Stock) (collectively, the Target Preferred Stock and Target Common Stock are referred to herein as Target Capital Stock), shall be converted into the right to receive the Merger Consideration (as defined in Section 2.6(a)) upon the terms and subject to the conditions set forth herein.

C. Target, Acquiror and Merger Sub desire to make certain representations and warranties and other agreements in connection with the Merger.

NOW, THEREFORE, in consideration of the covenants and representations set forth herein, and for other good and valuable consideration, the parties agree as follows:

1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

Acquiror has the meaning set forth in the introductory paragraph.

Acquiror Common Stock has the meaning set forth in Section 6.7.

Acquiror Disclosure Schedule has the meaning set forth in Section 4.

Acquiror Indemnified Person and Acquiror Indemnified Persons have the meanings set forth in Section 9.2(b).

Acquisition Proposal has the meaning set forth in Section 5.2.

Aggregate Preferred Preference Amount means the sum of the aggregate Series A Preference Amount, aggregate Series B Preference Amount and aggregate Series C Preference

Amount for all shares of Target Preferred Stock issued and outstanding immediately prior to the Effective Time.

Aggregate Secondary Consideration Amount means $78.5 million less the Aggregate Preferred Preference Amount.

Allocation Spreadsheet has the meaning set forth in Section 2.6(d).

Applicable Escrow Ownership Percentage means, with respect to each Target stockholder as of immediately prior to the Effective Time, the percentage obtained by dividing (i) the sum of that portion of the Merger Consideration to which such Target stockholder will be entitled pursuant to Section 2.6, by (ii) the aggregate Merger Consideration.

Bid has the meaning set forth in Section 3.29.

Certificate of Merger has the meaning set forth in Section 2.1.

CERCLA has the meaning set forth in Section 3.20(a)(i).

Certificates has the meaning set forth in Section 2.7(a).

Closing has the meaning set forth in Section 2.2.

Closing Date has the meaning set forth in Section 2.2.

COBRA has the meaning set forth in Section 3.22(e).

Code means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

Confidential Information has the meaning set forth in Section 3.10(i).

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Schedule A		Allocation Spreadsheet

Schedule B		Option Spreadsheet

Exhibit A		Certificate of Merger

Exhibit B		Escrow Agreement

Exhibit C		Opinion of Target Counsel