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Agreement and Plan of Reorganization

This Agreement and Plan of Reorganization (this Agreement) is made and entered into as of March 5, 2007 (the Agreement Date) by and among Opsware Inc., a Delaware corporation (Acquiror), OZ1 Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Acquiror (Merger Sub One), OZ2 Acquisition LLC, a Delaware limited liability company and a wholly owned subsidiary of Acquiror (Merger Sub Two, and collectively with Merger Sub One, the Merger Subs), iConclude Co., a Delaware corporation (the Company), Donald Sullivan, as Representative (the Representative) and, for purposes of Section 6.1(f) only, each of Sachin Gupta and Jeff Gerber (the Executives).

Recitals

A. The parties intend that, subject to the terms and conditions hereinafter set forth, Merger Sub One shall merge with and into the Company in a statutory reverse-triangular merger (the First Merger), with the Company to be the surviving corporation of the First Merger, and immediately following the First Merger, the Company shall merge with and into Merger Sub Two in a statutory forward-triangular merger (the Second Merger and collectively or in seriatim with the First Merger (as appropriate), the Merger), with Merger Sub Two to be the surviving entity of the Second Merger, on the terms and subject to the conditions of this Agreement and pursuant to certificates of merger in such forms as are mutually acceptable to Acquiror and the Company (the Certificates of Merger) and the applicable provisions of the laws of the State of Delaware.

B. The Boards of Directors of Acquiror, Merger Sub One, Merger Sub Two and the Company have determined that the Merger is in the best interests of their respective companies and stockholders and have approved and declared advisable this Agreement and the Merger. Acquiror, as the sole stockholder of Merger Sub One and Merger Sub Two, has approved this Agreement and the Merger.

C. Concurrently with the execution and delivery of this Agreement, and as a condition and inducement to Acquirors willingness to enter into this Agreement, the employee of the Company listed on Exhibit A-1 is executing and delivering to Acquiror an Employment Offer Letter in mutually agreed form, the employee of the Company listed on Exhibit A-2 is executing and delivering to Acquiror an Employment Offer Letter in mutually agreed form, and the employees of the Company listed on Exhibit A-3 are executing and delivering to Acquiror Employment Offer Letters in mutually agreed form (collectively, the Employment Offer Letters), which letters shall become effective upon the Effective Time of the First Merger (as defined in Article 1).

D. Acquiror, Merger Sub One, Merger Sub Two and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and to prescribe various conditions to the Merger.

E. Concurrently with the execution and delivery of this Agreement, and as a condition and inducement to Acquirors willingness to enter into this Agreement, each Company Stockholder (as defined in Article 1) listed on Exhibit B-1 is executing and delivering to

Acquiror a Voting Agreement substantially in the form attached hereto as Exhibit B-2 (the Voting Agreement).

F. For United States federal income tax purposes, the parties intend that, unless the Reorganization Waiver is made pursuant to Section 2.12, the Merger qualify as a reorganization under the provisions of Section 368(a) of Code and the rules and regulations promulgated thereunder.

Now, Therefore, in consideration of the foregoing and the mutual promises, covenants and conditions contained herein, the parties hereby agree as follows:

ARTICLE 1
Certain Definitions

As used in this Agreement, the following terms shall have the meanings set forth below. Unless indicated otherwise, all mathematical calculations contemplated hereby shall be made to the eighth decimal place.

Accrued Liabilities means any Liabilities that are accrued as of the Closing Date, including any Liabilities that should have been recorded as Liabilities under GAAP as of the Closing Date identified in connection with the presentation of the Company Audited Financial Statements.

Acquiror Ancillary Agreements means, collectively, each certificate to be delivered on behalf of Acquiror by an officer or officers of Acquiror at the Closing pursuant to Article 9 and each agreement (other than this Agreement) that Acquiror is to enter into as a party thereto pursuant to this Agreement.

Acquiror Common Stock means the Common Stock, par value $0.001 per share, of Acquiror.

Acquisition Proposal means any inquiry, offer or proposal, or any public announcement of an intention to make any inquiry, offer or proposal, by a person or group (other than Acquiror or any of its subsidiaries) relating to or involving: (A) any acquisition or purchase by any person or group (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) of 10% or more of the voting interest in the total outstanding voting securities of the Company; (B) any tender offer or exchange offer that, if consummated, would result in any person or group (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) beneficially owning 10% or more of the voting interest in the total outstanding voting securities of the Company; (C) any merger, consolidation, business combination or similar transaction involving the Company pursuant to which the stockholders of the Company immediately preceding such transaction hold less than 90% of the equity interests in (i) the surviving or resulting entity of such transaction or (ii) the parent entity of the surviving or resulting entity of such transaction, in either case, in substantially the same proportions as they held the voting equity interests of the Company immediately preceding such transaction; (D) any sale, lease, exchange, transfer, license, pledge, mortgage, acquisition or disposition of all or substantially all of the assets or business of the Company; or (E) any liquidation or dissolution of Company or any extraordinary dividend, whether of cash or other property.

Action shall mean any action, claim, suit, litigation, proceeding, labor dispute, arbitral action, governmental audit, inquiry, criminal prosecution, investigation or unfair labor practice charge or complaint.

Affiliate shall have the meaning set forth in Rule 405 of Regulation C promulgated under the Securities Act.

Aggregate Company Payments means the Aggregate Merger Consideration, plus the Dividend Amount.

Aggregate Merger Consideration means an amount equal to the Cash Consideration plus the Stock Consideration.

Applicable Law means, collectively, all foreign, federal, state, local or municipal laws, statutes, ordinances, regulations, and rules, and all orders, writs, injunctions, awards, judgments and decrees applicable to the Company or any of its assets, properties and business (and any regulations promulgated thereunder).

Assumed Option Number means the product of (A) the number of shares of Company Common Stock issuable upon the exercise of all Company Options immediately prior to the Effective Time of the First Merger (provided, however, that unvested Company Options held by the persons listed on Schedule 8.7 of the Company Disclosure Letter shall be excluded from such number; provided, further, that Schedule 8.7 shall not include any individual with an acceleration provision that is offered employment with the Surviving Entity but declines to accept such employment) times (B) the Option Exchange Ratio.

Audited Balance Sheets means the Company balance sheets dated as of December 31, 2005 and December 31, 2006, included in the Company Audited Financial Statements prepared pursuant to Section 7.15.

Audit Differential Amount shall mean the sum of (i) any reduction in the difference between the Companys total assets and total Liabilities as of December 31, 2006 reflected in the Audited Balance Sheet as of that date as compared to that reflected in the Companys unaudited Balance Sheet as of that date included in the Company Financial Statements; plus (ii) the excess of the Companys revenues as shown in the Companys unaudited statements of operations for the year ended on the above date included in the Company Financial Statements over those shown for that period in the statement of operations for such period in the Audited Financial Statements; provided, however, that for purposes of clauses (i) and (ii) of the foregoing, in no event shall any reclassification of revenues to deferred revenues or any increase in Liabilities as a result of any such reclassification be deemed part of the Audit Differential Amount.

Balance Sheet Date means February 28, 2007, the date of the Company Balance Sheet.

Cash Consideration means $30,000,000.

Closing means the closing of the transactions to consummate the Merger.

Closing Cash means the Companys total cash as of immediately prior to the Effective Time of the First Merger.

Closing Date means a time and date to be specified by the parties, which shall be no later than the fifth business day after the satisfaction or waiver of the conditions set forth in Article 9 and Article 10, or at such other time, date and location as the parties hereto agree in writing; provided that the parties may mutually agree to extend this date by up to an additional five business days in order to minimize any adjustment that may be made pursuant to Section 2.12 hereof.

Closing Stock Price means the average of the closing prices for a share of Acquiror Common Stock as quoted on the NASDAQ Global Market (or other principal exchange or market on which Acquiror Common Stock is then listed) for thirty (30) consecutive trading days ending on (and including) the trading day that is the third trading day prior to the Closing Date.

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

Common Stock Non-Dividend Participation Value means (A) the Aggregate Merger Consideration minus (B) the sum of (1) in the event that the Series A Preferred Stock has not been converted or deemed to have been converted into Common Stock, the Series A Aggregate Preference Cap and (2) in the event that the Series B Preferred Stock has not been converted or deemed to have been converted into Common Stock, the Series B Aggregate Preference Cap.

Company Ancillary Agreements means, collectively, each certificate to be delivered on behalf of the Company by an officer or officers of the Company at the Closing pursuant to Article 10 and each agreement (other than this Agreement) that the Company is to enter into as a party thereto pursuant to this Agreement.

Company Audited Financial Statements shall have the meaning set forth in Section 7.15.

Company Balance Sheet means the Companys unaudited balance sheet as of February 28, 2007 included in the Company Financial Statements.

Company Business means the business of the Company (including its current product development activities) as presently conducted.

Company Capital Stock shall mean, collectively, the Company Common Stock and the Preferred Stock.

Company Common Stock means the Common Stock, par value $0.001 per share, of the Company.

Company Financial Statements means (A) the Companys unaudited balance sheets dated December 31, 2005 and 2006 and its unaudited statements of operations, statements of cash flows and statements of changes in stockholders equity for the years then ended, and

(B) the Companys unaudited balance sheet dated February 28, 2007 and its unaudited statements of operations, statements of cash flows and statements of changes in stockholders equity for the two (2)-month period then ended, and any notes to the foregoing financial statements.

Company Option Plan means the 2005 Stock Plan of the Company.

Company Optionholders means the holders of Company Options.

Company Options means options to purchase shares of Company Capital Stock.

Company Securityholders means the Company Stockholders, Company Optionholders and Company Warrantholders, collectively.

Company Stockholders means the holders of shares of Company Capital Stock.

Company Warrantholders means the holders of Company Warrants.

Company Warrants means warrants to purchase shares of Company Capital Stock.

Contract means any written or oral legally binding contract, agreement, instrument, arrangement, commitment or undertaking (including leases, licenses, mortgages, notes, guarantees, sublicenses, subcontracts and purchase orders).

Delaware Law means the General Corporation Law of the State of Delaware.

Dissenters Deadline Date means the first date at or after the Effective Time on which no holder of Company Capital Stock as of immediately prior to the Effective Time has an opportunity to perfect appraisal rights in accordance with Delaware Law in connection with the First Merger in respect of any shares of Company Capital Stock.

Dissenting Shares means any shares of Company Capital Stock that are issued and outstanding immediately prior to the Effective Time and in respect of which appraisal rights shall have been perfected prior to the Dissenters Deadline Date in accordance with Delaware Law in connection with the First Merger.

Dissenting Shares Excess Payments means any payment in respect of Dissenting Shares in excess of the sum of (A) the amount of cash that would have been issuable pursuant to Section 2.4 in respect of such shares had they never been Dissenting Shares and (B) the product of (1) the aggregate number of shares of Acquiror Common Stock that would have been issuable pursuant to Section 2.4 in respect of such shares had they never been Dissenting Shares and (2) the Closing Stock Price. Dissenting Shares Excess Payments shall constitute Damages for purposes of Article 12 without regard to the Deductible.

Dividend Amount means an amount in cash equal to the sum of all cash remaining in the Company as of the Closing Date, plus Qualified Accounts Receivable, plus Unexercised Option Payments less (A) the amount of all Executive Severance Expenses (to the extent not paid on or prior to Closing or reflected in Accounts Payable (excluding $43,750 of Executive Severance Expenses payable to the Chief Executive Officer of the Company)), less (B) the amount of all Merger Expenses (to the extent not paid on or prior to Closing or reflected in Accounts Payable), less (C) an amount equal to all accounts payable and Accrued Liabilities (other than vacation accruals and deferred revenues) of the Company as of the Closing Date as calculated in accordance with GAAP (Accounts Payable), less (D) the premium for the D&O Tail Policy (if such premium is not reflected in Accounts Payable or has not been paid prior to the Closing). Any amount of Executive Severance Expenses, Merger Expenses or Accounts Payable not deducted in the calculation of the Dividend Amount hereunder are collectively referred to as Indemnifiable Merger Expenses and shall constitute Damages for purposes of Article 12 without regard to the Deductible (as defined in Section 12.2(b)); provided, however, that if the total amount of Accounts Payable not deducted in the calculation of the Dividend Amount does not exceed $20,000 in the aggregate, it will be ignored for purposes of calculating the Indemnifiable Merger Expenses.

Dividend Amount Certificate means a certificate executed by the Chief Executive Officer of the Company, dated as of the Closing Date, certifying (A) the amount of the Executive Severance Expenses (including an itemized list of each Executive Severance Expense with a description of the nature of such expense and the Person to whom such expense was or is owed); (B) the amount of the Merger Expenses (including an itemized list of each Merger Expense with a description of the nature of such expense and the Person to whom such expense was or is owed) along with wire transfer instructions for payment of such Merger Expenses at Closing; (C) the amount of the Accounts Payable (including a reasonably detailed calculation thereof); (D) the amount of the Dividend Amount (including a reasonably detailed calculation thereof); and (E) that the Dividend Amount was properly calculated in accordance with this Agreement and that the distribution thereof as contemplated by this Agreement is in accordance with Applicable Law.

Documentation means, collectively, programmers notes or logs, source code annotations, user guides, manuals, instructions, software architecture designs, layouts, any know-how, and any other designs, plans, drawings, documentation, materials, supplier lists, software source code and object code, net lists, photographs, development tools, blueprints, media, memoranda and records that are primarily related to or otherwise necessary for the use and exploitation of any products of the Company used in the Company Business or under development, whether in tangible or intangible form, whether owned by the Company or held by the Company under any licenses or sublicenses (or similar grants of rights).

Effective Time (A) with respect to the First Merger means the time of acceptance by the Secretary of State of the State of Delaware of the filing of the Certificate of Merger for the First Merger (or such later time as may be mutually agreed in writing by the Company and Acquiror and specified in such Certificate of Merger) and (B) with respect to the Second Merger means the time of acceptance by the Secretary of State of the State of Delaware of the filing of the Certificate of Merger for the Second Merger (or such later time as may be

mutually agreed in writing by the Company and Acquiror and specified in such Certificate of Merger).

Encumbrance means, with respect to any asset, any mortgage, deed of trust, lien, pledge, charge, security interest, title retention device, collateral assignment, adverse claim, restriction or other encumbrance of any kind in respect of such asset (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

ERISA Affiliate means any entity which is a member of: (A) a controlled group of corporations, as defined in Section 414(b) of the Code; (B) a group of entities under common control, as defined in Section 414(c) of the Code; or (C) an affiliated service group, as defined in Section 414(m) of the Code, or treasury regulations promulgated under Section 414(o) of the Code, any of which includes the Company.

Escrow Agent means the Escrow Agent appointed pursuant to Section 2.7 hereof.

Escrow Agreement means the Escrow Agreement among Acquiror, the Escrow Agent and Representative contemplated by Section 2.7 hereof, in substantially the form attached hereto as Exhibit C, with such changes as may be required by the Escrow Agent.

Escrow Cash means an amount of cash equal to 12.5% of the sum of (1) $55,000,000 plus (2) the Dividend Amount, subject to reduction in accordance with Section 2.7(d).

Escrow Percentage means the quotient obtained by dividing (i) the Escrow Cash by (ii) the total amount of cash that is otherwise distributable (prior to giving effect to any reduction attributable to the Escrow Cash) to the Company Stockholders pursuant to Section 2.4(b).

Exchange Act means the Securities Exchange Act of 1934, as amended.

Executive Severance Expenses shall mean all Liabilities of the Company to the Companys Chief Executive Officer and vice-president or higher-level officers, including any severance, bonus or other payments due in connection with the Merger or upon termination of employment or service or any other event, before or upon the Merger or otherwise (but excluding Liabilities for the payment of accrued wages, accrued and unused vacation time, paid time-off or for the reimbursement of any expenses incurred in the ordinary course of business consistent with past practice or the acceleration of stock vesting).

GAAP means United States generally accepted accounting principles applied on a consistent basis.

Governmental Authority means any court or tribunal, governmental or regulatory body, administrative agency, commission or other governmental authority.

Intellectual Property Rights means, collectively, all industrial and intellectual property rights throughout the world, including patents, patent applications, patent rights, trademarks, trademark registrations and applications therefor, trade dress rights, trade names, service marks, service mark registrations and applications therefor, and any and all goodwill associated with and symbolized by the foregoing items, rights in Internet domain names, Internet and World Wide Web URLs or addresses, copyrights, copyright registrations and applications therefor, mask work rights, mask work registrations and applications therefor, licenses and trade secrets.

knowledge means the knowledge of a particular fact, circumstance, event or other matter in question of (i) in the case of the Company, any of Sachin Gupta, Jeff Gerber, Rick Smith, Kurt Shintaffer, Scott Roza, Brian White, Eric Hughes or Jenna Melnick and (ii) in the case of any other party to this Agreement, the executive officers of such entity (collectively, the Entity Representatives), in each case after reasonable inquiry.

Liabilities means commitments, guarantees, debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, determined or determinable, known or unknown, including those arising under any law, Action or governmental order and those arising under any Contract.

Material Adverse Change and Material Adverse Effect when used in connection with an entity means any change, event, circumstance, condition or effect (regardless of whether or not such change, event, circumstance, condition or effect is inconsistent with the representations or warranties made by such entity in this Agreement) that is or is reasonably likely to be, individually or in the aggregate, materially adverse in relation to the condition (financial or otherwise), capitalization, properties, assets (including intangible assets), liabilities, business, operations or results of operations of such entity and its subsidiaries, taken as a whole, except to the extent that any such change, event, circumstance, condition or effect directly results from: (A) changes in general economic conditions (provided that such changes do not affect such entity disproportionately as compared to such entitys competitors); (B) changes affecting the industry generally in which such entity operates (provided that such changes do not affect such entity disproportionately as compared to such entitys competitors); (C) the execution, announcement, pendency or consummation of the transactions contemplated by this Agreement; or (D) the taking of any action contemplated by this Agreement or consented to in writing by Acquiror; provided, however, that an Audit Differential Amount of $500,000 or less by itself will not be deemed to be a Material Adverse Change with respect to the Company; provided, further, that failure to achieve currently projected bookings (as set forth in Section 4.8 of the Company Disclosure Letter) from non-current customers (not in excess of $500,000) will not be a Material Adverse Effect if such failure is principally attributable to the announcement of the transaction unless such cancellation primarily related to concerns over the Companys product or technology.

Merger Expenses means all costs and expenses incurred by the Company in connection with the Merger and this Agreement and the transactions contemplated hereby,

including any fees and expenses of legal counsel, financial advisors, investment bankers and accountants (including the costs and expenses of the Company incurred in connection with the Audit), but excluding the first $100,000 of such costs and expenses.

Merger Sub Ancillary Agreements means, collectively, each certificate to be delivered on behalf of Merger Sub One or Merger Sub Two by an officer or officers of Merger Sub One or Merger Sub Two at the Closing pursuant to Article 9 and each agreement (other than this Agreement) that Merger Sub One and Merger Sub Two is to enter into as a party thereto pursuant to this Agreement.

Merger Sub One Common Stock means the Common Stock, par value $0.001 per share, of Merger Sub One.

Merger Sub Two Membership Interests means the membership interests of Merger Sub Two.

Non-Affiliated Holders means those holders of Company Common Stock as of the date of this Agreement who are neither (i) officers, directors or other Affiliates of the Company; or (ii) accredited investors within the meaning of Rule 501 promulgated under the Securities Act.

Option Exchange Ratio means the quotient (rounded to the eighth decimal place) obtained by dividing (A) the Per Share Non-Dividend Participation Amount by (B) the Closing Stock Price.

Participating Stock means the aggregate number of shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time of the First Merger (assuming conversion of all Preferred Stock, the exercise of all Company Options and the exercise of all warrants and other convertible securities to acquire Preferred Stock or Company Common Stock).

Per Share Dividend Participation Amount means the quotient obtained by dividing (A) the Dividend Amount (minus any amount of the Dividend Amount allocated to the holders of Preferred Stock in satisfaction of the Series A Aggregate Preference Amount and/or Series B Aggregate Preference Amount) by (B) the total number of shares of Company Capital Stock outstanding immediately prior to the Effective Time of the First Merger (on an as converted to Common Stock basis, but, for the avoidance of doubt, without the exercise of options or warrants outstanding as of such time).

Per Share Non-Dividend Cash Participation Amount means the quotient obtained by dividing (A) the difference of (1) the Cash Consideration minus (2) the Per Share Non-Dividend Cash Series A Preference Balance Amount times the total number of shares of Series A Preferred Stock outstanding as of the Effective Time of the First Merger (and which have not been converted or deemed to have been converted into Company Common Stock) minus (3) the Per Share Non-Dividend Cash Series B Preference Balance Amount times the total number of shares of Series B Preferred Stock outstanding as of the Effective Time of the First Merger (and which have not been converted or deemed to have been converted into Company Common Stock) by (B) the total number of shares of Company Capital Stock outstanding

immediately prior to the Effective Time of the First Merger (on an as converted to Common Stock basis, but, for the avoidance of doubt, without the exercise of options or warrants outstanding as of such time).

Per Share Non-Dividend Cash Series A Preference Balance Amount means the product obtained by multiplying (A) the Post-Dividend Cash Percentage times (B) the fraction obtained by dividing (1) that portion of the Series A Aggregate Preference Amount (to the extent that the Series A Preferred Stock is not converted or deemed converted into Company Common Stock) that was not satisfied through payment of the Dividend Amount by (2) the total number of shares of Series A Preferred Stock outstanding immediately prior to the Effective Time of the First Merger (on an as converted to Common Stock basis).

Per Share Non-Dividend Cash Series B Preference Balance Amount means the product obtained by multiplying (A) the Post-Dividend Cash Percentage times (B) the fraction obtained by dividing (1) that portion of the Series B Aggregate Preference Amount (to the extent that the Series B Preferred Stock is not converted or deemed converted into Company Common Stock) that was not satisfied through payment of the Dividend Amount by (2) the total number of shares of Series B Preferred Stock outstanding immediately prior to the Effective Time of the First Merger (on an as converted to Common Stock basis).

Per Share Non-Dividend Participation Amount means the quotient obtained by dividing (A) the Common Stock Non-Dividend Participation Value by (B) the number of shares of Company Common Stock outstanding as of the Effective Time of the First Merger (without the exercise of any Company Options or warrants or the conversion of shares of Preferred Stock, in each case, outstanding at the Effective time of the First Merger).

Permitted Encumbrances means: (A) statutory liens for taxes that are not yet due and payable; (B) statutory liens to secure obligations to landlords, lessors or renters under leases or rental agreements; (C) deposits or pledges made in connection with, or to secure payment of, workers compensation, unemployment insurance or similar programs mandated by Applicable Law; (D) statutory liens in favor of carriers, warehousemen, mechanics and materialmen, to secure claims for labor, materials or supplies and other like liens; and (E) non-exclusive object code licenses of Company Products (as defined in Section 4.13(c)) by the Company in the ordinary course of its business consistent with past practice on its standard form of customer agreement (a copy of which has been provided to Acquiror).

Person means any individual, corporation, company, limited liability company, partnership, limited liability partnership, trust, estate, proprietorship, joint venture, association, organization, entity or Governmental Authority.

Post-Dividend Cash Percentage equals (A) the Cash Consideration divided by (B) the Aggregate Merger Consideration.

Preferred Stock means the Series A Preferred Stock and Series B Preferred Stock, collectively.

Pro Rata Share shall be a Company Stockholders Proceeds Amount divided by the aggregate Proceeds Amounts of all Company Stockholders where for such purposes, each

share of Acquiror Common Stock received by a Company Stockholder as part of its Proceeds Amount shall be deemed to have a value equal to the Closing Stock Price.

Qualified Accounts Receivable means the accounts receivable of the Company on the Companys balance sheet as of the Closing Date net of any accounts receivable reserve and excluding accounts receivable in excess of 60 days from their original due date and not provided for by such reserve.

Redistributed Cash Consideration has the meaning set forth in Section 2.4(b).

Redistributed Cash Consideration Per Share shall mean the quotient of (1) the Redistributed Cash Consideration divided by (2) the number of shares of Company Common Stock outstanding as of the Effective Time of the First Merger.

Redistributed Stock Number has the meaning set forth in Section 2.4(b).

Redistributed Stock Consideration Per Share shall mean the quotient of (1) the Redistributed Stock Number divided by (2) the number of shares of Company Common Stock outstanding as of the Effective Time of the First Merger.

SEC means the Securities and Exchange Commission.

Securities Act means the Securities Act of 1933, as amended.

Series A Aggregate Preference Amount means the product of the Series A Per Share Preference Amount and the total number of shares of Series A Preferred Stock outstanding as of the Effective Time of the First Merger.

Series A Aggregate Preference Cap means the product of (A) the Series A Per Share Preference Cap and (B) the total number of shares of Series A Preferred Stock outstanding as of the Effective Time of the First Merger.

Series A Per Share Dividend Amount means the product of (A) the Dividend Amount times (B) the quotient of the Series A Aggregate Preference Amount divided by (1) the product of the total number of shares of Series A Preferred Stock outstanding immediately prior to the Effective Time of the First Merger (on an as converted to Common Stock basis) times (2) the sum of Series A Aggregate Preference Amount and the Series B Aggregate Preference Amount.

Series A Per Share Preference Amount means an amount per share of Company Series A Preferred Stock equal to the sum of (A) $0.38 per share of Series A Preferred Stock and (B) an amount equal to all declared and unpaid dividends on such share immediately prior to the Effective Time of the First Merger, subject to Section 7.14.

Series A Per Share Preference Cap means an amount per share of Company Series A Preferred Stock equal to the sum of (A) $0.76 per share of Series A Preferred Stock and (B) an amount equal to all declared and unpaid dividends on such share immediately prior to the Effective Time of the First Merger, subject to Section 7.14.

Series A Preferred Stock means the Series A Preferred Stock, par value $0.001 per share, of the Company.

Series A Stock Conversion Number means the quotient obtained by dividing (A) the difference of (i) that portion of the Series A Aggregate Preference Amount (to the extent that the Series A Preferred Stock is not converted or deemed converted into Company Common Stock) that was not satisfied through payment of the Dividend Amount minus (ii) the product of (a) the Per Share Non-Dividend Cash Series A Preference Balance Amount times (b) the total number of shares of Series A Preferred Stock outstanding as of the Effective Time of the First Merger (and not converted or deemed converted into Company Common Stock) by (B) the total number of shares of Series A Preferred Stock outstanding immediately prior to the Effective Time of the First Merger (on an as converted to Common Stock basis) by (C) the Closing Stock Price.

Series B Aggregate Preference Amount means the product obtained by multiplying (A) the Series B Per Share Preference Amount by (B) the total number of shares of Series B Preferred Stock issued and outstanding immediately prior to the Effective Time of the First Merger.

Series B Aggregate Preference Cap means the product obtained by multiplying (A) the Series B Per Share Preference Cap by (B) the total number of shares of Series B Preferred Stock issued and outstanding immediately prior to the Effective Time of the First Merger.

Series B Per Share Dividend Amount means the product of (A) the Dividend Amount times (B) the quotient of the Series B Aggregate Preference Amount divided by (1) the product of the total number of shares of Series B Preferred Stock outstanding immediately prior to the Effective Time of the First Merger (on an as converted to Common Stock basis) times (2) the sum of Series A Aggregate Preference Amount and the Series B Aggregate Preference Amount.

Series B Per Share Preference Amount means an amount per share of Company Series B Preferred Stock equal to the sum of (A) $0.71007 per share of Series B Preferred Stock and (B) an amount equal to all declared and unpaid dividends on such share immediately prior to the Effective Time, subject to Section 7.14.

Series B Per Share Preference Cap means an amount per share of Company Series B Preferred Stock equal to the sum of (A) $1.42014 per share of Series B Preferred Stock and (B) an amount equal to all declared and unpaid dividends on such share immediately prior to the Effective Time, subject to Section 7.14.

Series B Preferred Stock means the Series B Preferred Stock, par value $0.001 per share, of the Company.

Series B Stock Conversion Number means the quotient obtained by dividing (A) the difference of (i) that portion of the Series B Aggregate Preference Amount (to the extent that the Series B Preferred Stock is not converted or deemed converted into Company Common Stock) that was not satisfied through payment of the Dividend Amount minus (ii) the product of

(a) the Per Share Non-Dividend Cash Series B Preference Balance Amount times (b) the total number of shares of Series B Preferred Stock outstanding as of the Effective Time of the First Merger (and not converted or deemed converted into Company Common Stock) by (B) the total number of shares of Series B Preferred Stock outstanding immediately prior to the Effective Time of the First Merger (on an as converted to Common Stock basis) by (C) the Closing Stock Price.

Signing Stock Price means $7.37375.

Spreadsheet means a spreadsheet or spreadsheets in form reasonably acceptable to Acquiror, which spreadsheet shall be dated as of the Closing Date and shall set forth, as of the Closing Date and immediately prior to the Effective Time of the First Merger, the following factual information relating to holders of Company Capital Stock: (A) the names of all the Companys stockholders and their respective addresses; (B) the number and kind of shares of Company Capital Stock held by such Persons and the respective certificate numbers; (C) the repurchase price payable per share under each Unvested Company Share; (D) the vesting arrangements with respect to Unvested Company Shares and terms of the Companys rights to repurchase such Unvested Company Shares; (E) the calculation of the each of the herein defined terms required to be quantified as of Closing, including the amount of any Dissenting Shares Excess Payments, the number of shares of Participating Stock, the amount of Escrow Cash and the Dividend Amount; (F) the number of shares of Acquiror Common Stock issuable to each Company Stockholder in exchange for the Company Capital Stock held by such Person (and number of such shares which constitute Vested Acquiror Shares and Unvested Acquiror Shares); (G) the amount of cash issuable to each Company Stockholder in exchange for the Company Capital Stock held by such Person (and amount of such cash which constitutes Vested Acquiror Cash and Unvested Acquiror Cash); (H) the Pro Rata Share of each Company Stockholder; (I) the interest in dollar and percentage terms of each Company Stockholder in the Escrow Cash (and amount of such cash which constitutes Vested Acquiror Cash and Unvested Acquiror Cash); (J) the calculation of the Series A Stock Conversion Number, the Series B Stock Conversion Number, the Stock Conversion Number, the Option Exchange Ratio, the Series A Per Share Dividend Amount, the Series B Per Share Dividend Amount, the Per Share Non-Dividend Cash Series A Preference Balance Amount, the Per Share Non-Dividend Cash Series B Preference Balance Amount, the Per Share Dividend Participation Amount, the Per Share Non-Dividend Cash Participation Amount, the Post-Dividend Cash Percentage, the Redistributed Stock Number (if any), the Redistributed Stock Consideration Per Share (if any), the Redistributed Cash Consideration (if any) and the Redistributed Cash Consideration Per Share (if any); (K) the names of all the Company Optionholders and their respective addresses; (L) the number of vested and unvested assumed Company Options held by each of the Company Optionholders, including the exercise prices applicable thereto; (M) the number of vested and unvested shares of Acquiror Common Stock underlying the options to which such assumed Company Options shall convert into pursuant to Section 2.4(b)(vi) held by each of the Company Optionholders, including exercise prices applicable thereto; and (N) the vesting schedule applicable to such assumed Company Options and the hire date of each of the Company Optionholders.

Spreadsheet Submission Date means the later of (A) the date on which the Company delivers the Spreadsheet to Acquiror, (B) the Closing Date, and (C) the Dissenters Deadline Date.

Stock Consideration means an amount equal to the product of (A) the excess of (1) the Stock Number minus (2) the Assumed Option Number multiplied by (B) the Closing Stock Price.

Stock Conversion Number means the quotient obtained by dividing (A) the quotient of (i) the difference of (a) the Aggregate Merger Consideration minus (b) the Cash Consideration minus (c) the product of the Closing Stock Price times the sum of (1) the Series A Stock Conversion Number times the total number of shares of Series A Preferred Stock outstanding as of the Effective Time of the First Merger (and not converted or deemed converted into Company Common Stock) plus (2) the Series B Stock Conversion Number times the total number of shares of Series B Preferred Stock outstanding as of the Effective Time of the First Merger (and not converted or deemed converted into Company Common Stock) divided by (ii) the total number of shares of Company Capital Stock outstanding immediately prior to the Effective Time of the First Merger (on an as converted to Common Stock basis, but, for the avoidance of doubt, without the exercise of options or warrants outstanding as of such time) by (B) the Closing Stock Price.

Stock Number means the quotient of (A) $25,000,000 divided by (B) the Signing Stock Price.

Subsidiary of an entity means a corporation or other business entity in which such entity owns, directly or indirectly, at least a 50% interest or that is otherwise, directly or indirectly, controlled by such entity.

tax (and, with correlative meaning, taxes) means (A) any net income, alternative or add-on minimum tax, estimated, gross income, gross receipts, sales, use, ad valorem, transfer, registration, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, real or personal property, capital stock, social security (or similar), unemployment, disability, 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 responsible for the imposition of any such tax (federal, foreign, state or local), whether disputed or not, (B) any liability for the payment of any amounts of the type described in clause (A) of this sentence as a result of being a member of an affiliated, consolidated, combined, unitary or aggregate group for any taxable period, and (C) any liability for the payment of any amounts of the type described in clause (A) or (B) of this sentence 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.

Technology means works of authorship, inventions, know-how, customer lists, supplier lists, Internet domain names, Internet and World Wide Web URLs or addresses, proprietary processes and formulae, technology, software source code and object code, algorithms, net lists, architectures, structures, screen displays, photographs, images, layouts,

development tools, designs, blueprints, libraries, notebooks, specifications, content (including textual content and visual, photographic or graphics content), compilations of data, technical drawings (or similar information in electronic format) or other copyrightable, patentable or otherwise proprietary works and all documentation and media constituting, describing or relating to the foregoing, including manuals, programmers notes, memoranda and records.

Transfer means (A) offer, pledge, sell, contract to sell, sell of any option or contract to purchase, purchase of any option or contract to sell, grant of any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Acquiror Common Stock or any securities convertible into or exercisable or exchangeable for Acquiror Common Stock or (B) the entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Acquiror Common Stock, whether any such transaction described in clause (A) or (B) above is to be settled by delivery of Acquiror Common Stock or such other securities, in cash or otherwise.

Unexercised Option Payments shall mean the aggregate exercise price of all Company Options issued and outstanding at the Effective Time of the First Merger, excluding any Company Options held by the persons listed on Schedule 8.7 of the Company Disclosure Letter that are unvested at the Effective Time of the First Merger.

Unvested Acquiror Cash means cash to be paid upon conversion hereunder of shares of Company Capital Stock held by such Company Stockholder which are Unvested Company Shares.

Unvested Company Shares means any shares of Company Capital Stock that are unvested or subject to a repurchase option, vesting schedule or any other condition providing that such shares may be forfeited to or repurchased by the Company upon any termination of the relevant relationship (including employment or directorship) of the Company with the holder (or prior holder thereof) under the terms of any Contract with the Company (including any restricted stock purchase agreement, stock option agreement or stock option exercise agreement).

Vested Acquiror Cash means cash to be paid upon conversion hereunder of shares of Company Capital Stock held by such Company Stockholder which are not Unvested Company Shares.

Vested Acquiror Shares means any shares of Acquiror Common Stock to be issued upon conversion hereunder of shares of Company Capital Stock held by such Company Stockholder which are not Unvested Company Shares.

Other capitalized terms defined elsewhere in this Agreement and not defined in this Article 1 shall have the meanings assigned to such terms in this Agreement.

ARTICLE 2
The Merger

2.1 Closing. Subject to termination of this Agreement as provided in Article 11, the Closing shall take place at the offices of Fenwick & West LLP, Silicon Valley Center, 801 California Street, Mountain View, California, on the Closing Date. Concurrently with the

Closing or at such later date and time as may be mutually agreed in writing by the Company and Acquiror, the Certificates of Merger for the First Merger and Second Merger shall be filed with the Delaware Secretary of State in accordance with Delaware Law.

2.2 Effects of the First Merger. At and upon the Effective Time of the First Merger:

(a) the separate existence of Merger Sub One shall cease and Merger Sub One shall be merged with and into the Company, and the Company shall be the surviving corporation of the First Merger pursuant to the terms of this Agreement and the Certificate of Merger for the First Merger;

(b) the Certificate of Incorporation of the Company shall be amended in its entirety to read as set forth in the Certificate of Merger for the First Merger;

(c) the Bylaws of Merger Sub One shall continue unchanged and be adopted as the Bylaws of the Company in accordance with Delaware Law;

(d) the officers of Merger Sub One immediately prior to the Effective Time of the First Merger shall continue to be officers of the Company immediately after the Effective Time of the First Merger until their respective successors are duly appointed;

(e) the members of the Board of Directors of Merger Sub One immediately prior to the Effective Time of the First Merger shall continue to be the members of the Board of Directors of the Company immediately after the Effective Time of the First Merger until their respective successors are duly elected or appointed and qualified; and

(f) the First Merger shall, from and after the Effective Time of the First Merger, have all of the effects provided by Delaware Law.

2.3 Effects of the Second Merger. At and upon the Effective Time of the Second Merger (which shall immediately follow the First Merger):

(a) the separate existence of the Company shall cease and the Company shall be merged with and into Merger Sub Two, and Merger Sub Two shall be the surviving entity of the Second Merger (the Surviving Entity) pursuant to the terms of this Agreement and the Certificate of Merger for the Second Merger;

(b) the Certificate of Formation of Merger Sub Two shall be amended in its entirety to read as set forth in the Certificate of Merger for the Second Merger;

(c) the managers of Merger Sub Two immediately prior to the Effective Time of the First Merger shall continue to be managers of the Surviving Entity immediately after the Effective Time of the Second Merger until their respective successors are duly appointed;

(d) the members of Merger Sub Two immediately prior to the Effective Time of the Second Merger shall continue to be managing members of the Surviving Entity immediately after the Effective Time of the Second Merger until their respective successors are duly appointed; and

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