LETTER OF TRANSMITTAL TO SURRENDER SHARES OF STOCK OF

Transcription

1 LETTER OF TRANSMITTAL TO SURRENDER SHARES OF STOCK OF AUTOESL DESIGN TECHNOLOGIES, INC. This Letter of Transmittal is being delivered to each record holder of shares of capital stock (the Stock ) of AutoESL Design Technologies, Inc., a Delaware corporation (the Company ), each holder of vested options to acquire shares of Stock and each holder of warrants to purchase shares of the Stock, in connection with that certain Agreement and Plan of Merger, dated as of January 18, 2011 (the Merger Agreement ), by and among (i) Xilinx, Inc., a Delaware corporation (the Parent ), (ii) Achilles Delaware, Inc., a Delaware corporation and wholly owned subsidiary of the Parent (the Merger Sub ), (iii) the Company and (iv) Adams Capital Management IV, L.P. (the Stockholders Agent ). Pursuant to the Merger Agreement, Merger Sub will be merged with and into the Company (the Merger ) with the Company to be the surviving corporation, and each class of the Company s outstanding shares of Stock will be converted into the right to receive the applicable consideration set forth in Article I of the Merger Agreement. Capitalized terms not otherwise defined herein have the meanings ascribed to them in the Merger Agreement. A copy of the Merger Agreement has been made available to the Paying Agent. In order to exchange your shares of Stock, your options to acquire Stock or your warrants to purchase Stock for the applicable consideration due to you pursuant to the Merger Agreement, you must deliver the following to the address set forth on the cover letter enclosed with this Letter of Transmittal: (i) (ii) (iii) a properly completed and duly signed Letter of Transmittal; the original certificate(s) representing your shares of Stock of the Company, if you are a holder of shares of Stock and if otherwise applicable; and any applicable tax forms, as discussed below. Pursuant to the Merger, the undersigned encloses herewith and surrenders the following certificate(s) representing shares of Company stock: Please complete the following table: Name(s) and Address of Registered Holder(s) If there is any error in the name or address shown below, please make the necessary corrections DESCRIPTION OF SHARES SURRENDERED (Please fill in. Attach separate schedule if needed) Certificate No(s) Number of Shares TOTAL SHARES

2 If you are a holder of vested options or warrants only and not a holder of shares of Stock of the Company, then you may disregard the requirement to deliver any original certificate(s) representing shares of Stock of the Company. Please read the accompanying Instructions carefully and then complete and return this Letter of Transmittal and other required materials to the following address: The Paying Agent is: American Stock Transfer & Trust Company, LLC For information call: (877) or (718) Please refer to the cover letter enclosed with this Letter of Transmittal for the information on where and to whom you should deliver your completed Letter of Transmittal and other required materials. Check this box if your Certificate(s) has been lost, stolen, misplaced or mutilated. See Instruction 5. DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS DIRECTED ON THE ENCLOSED COVER LETTER DOES NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. NO ALTERNATIVE, CONDITIONAL OR CONTINGENT SUBMISSIONS WILL BE ACCEPTED. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL IS AT THE OPTION AND RISK OF THE OWNER.

3 Ladies and Gentlemen: In connection with the Merger, the undersigned hereby surrenders the above described certificate(s) (the Certificates ), if the undersigned is a holder of shares of Stock and if otherwise applicable, which formerly represented the above-listed number of the Company s shares of (i) common stock, par value $ per share (the Common Stock ), (ii) Series A Preferred Stock, par value $ per share (the Series A Preferred Stock ), (iii) Series B Preferred Stock, par value $ per share (the Series B Preferred Stock ) and (iv) Series C Preferred Stock, par value $ per share (the Series C Preferred Stock ) in exchange for the applicable merger consideration (in each case below, as defined in the Merger Agreement), without interest and subject to any escrow, withholding, deduction or indemnification contemplated by the Merger Agreement, as set forth below: (i) (ii) (iii) (iv) in the case of Common Stock, the Common Total Amount Per Share; in the case of Series A Preferred Stock, the Series A Total Amount Per Share; in the case of Series B Preferred Stock, the Series B Total Amount Per Share; and in the case of Series C Preferred Stock, the Series C Total Amount Per Share. A portion of your merger consideration will be placed into escrow for twelve months (or longer, if claims against the escrow are pending at the end of the twelve-month period) pursuant to the terms of the Merger Agreement. The escrowed cash will be available to compensate Parent and various related parties for losses related to any inaccuracy or breach of the Company s representations, warranties, covenants and agreements, and certain other matters set forth in the Merger Agreement including liabilities of the Company for and relating to taxes arising from periods before the Merger. To the extent the escrowed cash is not sufficient to compensate Parent for certain indemnifiable losses set forth in the Merger Agreement, certain additional claims may be made as provided in the Merger Agreement. A portion of your merger consideration placed into escrow may be used to cover any costs or expenses that the Stockholders Agent may incur in performing his obligations for the benefit of the Indemnifying Persons. The undersigned, upon request, will execute and deliver any additional documents deemed by American Stock Transfer & Trust Company, LLC to be reasonably required to complete the surrender of the Certificates listed above, if applicable, in order to receive payment as a result of the Merger. All authority herein conferred or agreed to be conferred herein shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. The surrender of Certificates hereby, if applicable, is irrevocable and, once delivered to American Stock Transfer & Trust Company, LLC, may not be withdrawn under any circumstances. The undersigned understands that surrender is not made in acceptable form until the receipt by American Stock Transfer & Trust Company, LLC of this Letter of Transmittal, or a manually signed facsimile hereof, properly completed and duly signed, and of the Certificates, if applicable, together with all accompanying evidences of authority and other documents in form satisfactory to Parent. All questions as to validity, form and eligibility of any surrender of Certificates hereby will be determined by Parent and such determination shall be final and binding.

4 The unsigned understands that at the Effective Time of the Merger, all stock options and warrants will terminate automatically pursuant to the terms of the Amended and Restated AutoESL Design Technologies, Inc Stock Incentive Plan without the need for the option holders or warrant holders to take any action. The undersigned understands that payment to it of the applicable merger consideration (subject to applicable escrow) will be made as promptly as practicable after the surrender of Certificate(s), if applicable, is made in acceptable form. Please retain a copy of this Letter of Transmittal for your records. 4

5 Please complete the following table if payment is to be issued to the undersigned: Issue the check representing payment to: DELIVERY INSTRUCTIONS (See General Instructions 2 and 3) Name: Address: (Please Print) Telephone Number: Taxpayer Identification Number or Social Security Number (See IRS Form W-9 Below) WIRE TRANSFER INSTRUCTIONS To be completed ONLY if you desire funds to be delivered to you by wire transfer and the amount of funds to be delivered to you exceeds $25,000. NOTE: If payment by wire transfer is elected you must complete and return this page with your completed Letter of Transmittal. Bank Name: Bank Telephone Number: Account Name: Account Number: Routing Number (Swift Code/IBAN# if applicable): 5

6 Please complete the following table if payment is to be issued in the name of someone other than the undersigned: SPECIAL PAYMENT INSTRUCTIONS (See General Instructions 2 and 3) To be completed ONLY if the payment is to be issued in the name of someone other than the undersigned. NOTE: THE PERSON NAMED IN THESE SPECIAL PAYMENT INSTRUCTIONS MUST BE THE PERSON WHO COMPLETES THE IRS FORM W-9. Issue the check representing payment to: Name (Please Print) Address Taxpayer Identification Number or Social Security Number (See IRS Form W-9 Below) If you complete this box, you will need a signature guarantee by an eligible institution. See General Instruction. Delivery of the enclosed stock certificate(s) will be effected and risk of loss shall pass only upon receipt by the Paying Agent at the address listed on the enclosed cover letter. Delivery of a check or wire transfer (if applicable and permitted) for cash payment to which you are entitled under the Merger Agreement shall be made reasonably promptly after the receipt by Paying Agent of this Letter of Transmittal (properly completed) and, if applicable, the appropriate stock certificate(s) following the Closing. 6

7 LOST, STOLEN OR DESTROYED CERTIFICATES IF YOU ARE A HOLDER OF STOCK OF THE COMPANY (EXCEPT AS SET FORTH ON THIS PAGE IN CONNECTION WITH LOST, STOLEN, OR DESTROYED CERTIFICATES), YOU MUST ENCLOSE ONE OR MORE STOCK CERTIFICATES THAT REPRESENT OWNERSHIP WITH THIS LETTER OF TRANSMITTAL IN ORDER TO RECEIVE THE CONSIDERATION DUE TO YOU THEREFOR. If any of the Certificate(s) representing shares of Stock of the Company that you own have been lost, stolen, or destroyed, check this box and complete the remainder of this Letter of Transmittal. See Instruction 5 for further instructions. 7

8 ACKNOWLEDGEMENTS AND AGREEMENTS The undersigned understands and agrees that the Parent and the Surviving Corporation may rely upon the representations, warranties, releases and agreements contained herein as if each such person was a party to this Letter of Transmittal and each shall have the rights, remedies and benefits under this Letter of Transmittal as if such person was a party hereto. The undersigned understands that the Parent will deposit a portion of the merger consideration otherwise payable to the Indemnifying Persons in escrow pursuant to the terms of the Merger Agreement to secure certain indemnification obligations of the Indemnifying Persons under Article VIII of the Merger Agreement. The undersigned agrees and understands that the undersigned shall be entitled to receive the undersigned s portion of the escrowed funds in accordance with the terms of the Merger Agreement and the related escrow agreement, that indemnification claims made under Article VIII of the Merger Agreement may delay or preclude the release or reduce the amount of these funds released to the undersigned and that deposit of the Escrow Amount into escrow by the Parent as contemplated in the Merger Agreement together with the payment of (i) in the case of a share of Common Stock, the Common Initial Amount Per Share, (ii) in the case of a share of Series A Preferred Stock, the Series A Initial Amount Per Share, (iii) in the case of a share of Series B Preferred Stock, the Series B Initial Amount Per Share and (iv) in the case of a share of Series C Preferred Stock, the Series C Initial Amount Per Share (in each case, as defined in the Merger Agreement), in accordance with the payment instructions set forth above, shall constitute payment in full by Parent in respect of the above-listed shares of Stock. The undersigned understands and agrees to be bound by the indemnification obligations of the Indemnifying Persons pursuant to Article VIII of the Merger Agreement, including the indemnification obligations related to the specified indemnities listed therein. The undersigned further agrees and understands that pursuant to Section 8.2(e) of the Merger Agreement, the indemnification obligations with respect to fraud are not subject to any limitations. The undersigned hereby irrevocably appoints and constitutes Adams Capital Management IV, L.P. as the Stockholders Agent for and on behalf of such holder to execute and deliver the Merger Agreement and the Escrow Agreement and for all other purposes thereunder and ratifies any action previously taken by the Stockholders Agent in connection therewith as if it was approved in advance, to give and receive notices and communications, to authorize delivery to Parent of the applicable portion of the Escrow Fund in satisfaction of claims by Parent, to object to such deliveries, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such claims, to agree to, negotiate, enter into and provide amendments and supplements to and waivers in respect of the Merger Agreement in accordance with Sections 7.4 and 7.5 thereof, and the Escrow Agreement, and to take all actions necessary or appropriate in the judgment of the Stockholders Agent for the accomplishment of any or all of the foregoing. The undersigned hereby represents and warrants to the Parent and the Company that other than the above-listed shares of Stock and/or options to acquire shares of Stock and/or warrants to purchase shares of Stock as recorded in the books and records of the Company, the undersigned owns no securities of the Company. 8

9 The undersigned further represents and warrants that the undersigned has full power and authority to transfer, and, if applicable, is the sole owner of, the Certificate(s) except for any rights, if any, held by the spouse of the undersigned, who has consented to the transfer of the Certificate(s) with his or her signature below, and, when the Certificate(s) are accepted for payment, the Parent will acquire good title thereto, free and clear of all liens, restrictions, claims and encumbrances and the same will not be subject to any adverse claim. The undersigned will, upon request, execute any additional documents necessary or desirable to complete the sale or transfer of the undersigned s shares of Stock, options to acquire shares of Stock or warrants to purchase shares of Stock and, if applicable, the cancellation of the Certificate(s) hereby delivered. All authority herein conferred shall survive the death or incapacity of the undersigned and all obligations of the undersigned hereunder shall be binding on the heirs, personal representatives, successors or assigns of the undersigned. All authority conferred or agreed to be conferred in this Letter of Transmittal shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. The surrender of Certificate(s) hereby is irrevocable. The undersigned further acknowledges that by executing this Letter of Transmittal, the undersigned consents to the consummation of the Merger contemplated by the Merger Agreement, and waives all rights to dissent and demand payment under Section 262 of Delaware Law or, if Section 2115 of the California Corporations Code applies to the Company, Chapter 13 of the California Corporations Code. In accordance with Section 8.10 of the Merger Agreement, the undersigned acknowledges and agrees the undersigned shall not make any claim for contribution from the Company or the Surviving Corporation with respect to any indemnity claims arising under or in connection with the Merger Agreement to the extent that the Company, Surviving Corporation or any Parent Indemnified Person (as defined in the Merger Agreement) is entitled to indemnification thereunder for such claim. The undersigned acknowledges and agrees to the undersigned s indemnification obligations pursuant to Article VIII of the Merger Agreement. All questions as to the due execution and proper completion of this Letter of Transmittal and any Certificate(s) delivered herewith, and as to the exercise of any right to receive the applicable merger consideration shall be determined by the Parent (which may delegate such powers in whole or in part to American Stock Transfer & Trust Company, LLC (the Paying Agent )). Subject to the foregoing, the Parent hereby reserves the right to reject any and all Letters of Transmittal or Certificate(s) not in proper form or to waive any irregularities or defects in any Letters of Transmittal or Certificate(s) delivered in connection herewith. Effective for all purposes as of the Effective Time, the undersigned acknowledges and agrees on behalf of itself and each of its agents, trustees, beneficiaries, directors, officers, managers, affiliates, subsidiaries, stockholders, members, partners, heirs, executors, administrators, estate, successors and assigns (each, a Releasing Party ) that each hereby unconditionally, irrevocably and forever releases, acquits and discharges the Surviving Corporation, Parent, Merger Sub, the Company (each a Beneficiary ) and each of such Beneficiary s respective current and former directors, officers, managers, employees, representatives, agents, members, stockholders, successors, parents, affiliates, predecessors and assigns (each, a Released Party and collectively, the Released Parties ) from any and all rights, actions, claims, demands, liabilities, obligations and damages ( Claims ), that arise out of or are related directly or indirectly to the undersigned s ownership of the company securities being represented by the Certificates delivered herewith, the options to acquire shares of Stock and the warrants to purchase shares 9

10 of Stock, in law or in equity, known or unknown, matured or unmatured, contingent or vested, of any kind or nature or description whatsoever, from the beginning of time to the date hereof, that any Releasing Party had, presently has or may hereafter have or claim or assert to have against any Released Party, except for the undersigned s right to receive the applicable merger consideration and any other rights the undersigned is entitled to pursuant to the terms of the Merger Agreement, including without limitation pursuant to Section 5.8 thereof, if applicable. The undersigned acknowledges that the undersigned is familiar with section 1542 of the Civil Code of the State of California ( Section 1542 ), which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. Effective for all purposes as of the Effective Time, the undersigned waives and relinquishes on behalf of each Releasing Party any rights and benefits which such Releasing Party may have under Section 1542 or any similar statute or common law principle of any jurisdiction to the full extent that it may lawfully waive all such rights and benefits pertaining to the subject matter hereof. The undersigned acknowledges and covenants that (i) the Releasing Parties have not heretofore made or filed and will not make or file any allegations or any claim, action, suit or proceeding against any of the Released Parties in connection with, based upon or arising out of any Claim released and discharged as described above, and (ii) the Releasing Parties can not and will not assign to any Person any Claim or rights including any Claim (or any part thereof) released or discharged above. The undersigned acknowledges and understands that the release contained herein and the agreement to be bound by the indemnification provisions described in this Letter of Transmittal are conditions to the payment of any amount of cash to the undersigned pursuant to the Merger Agreement. By signing this Letter of Transmittal, the undersigned hereby covenants and agrees that the undersigned will keep the Confidential Information (as defined below) strictly confidential and will not, without the Parent s prior written consent, issue any press release, make any other public statement or make any other disclosure to any third party (whether or not in response to an inquiry) with respect to the Confidential Information; provided, however, that (i) the undersigned may reveal Confidential Information to the undersigned s advisors (a) who need to know such information for the purpose of exercising the undersigned s rights as a former stockholder, holder of vested stock options and/or holder of warrants of the Company under the Merger Agreement or in connection with rendering accounting, legal or tax advice to the undersigned, (b) who are informed by the undersigned of the confidential nature of the Confidential Information and (c) who agree to act in accordance with the requirements of this paragraph and (ii) any stockholder, holder of vested stock options and/or holder of warrants that is a fund may reveal the existence of the Merger Agreement, the merger consideration, such holder s allocation of the merger consideration to such holder s members or general or limited partners, as the case may be, who are informed of the confidential nature of the Confidential Information. By signing this Letter of Transmittal, the undersigned also agrees that the remedy at law for any breach of this paragraph is and will be inadequate, and in the event of such a breach or threatened breach, the Surviving Corporation 10

11 and/or the Parent shall be entitled to seek an injunction restraining the undersigned from the conduct which would constitute a breach of this paragraph. Nothing herein contained shall be construed as prohibiting the Surviving Corporation or the Parent from pursuing any other remedies available to either of them for such breach or threatened breach, including, without limitation, the recovery of damages from the undersigned. Confidential Information means the Merger Agreement and the terms thereof, the fact of the acquisition of the Company by the Parent and all confidential information provided by Parent to the Company and to the Effective Time Holders in connection therewith. 11

12 You are instructed to issue to the undersigned the applicable consideration to which the undersigned is entitled in connection with the Merger as provided for and pursuant to the terms and conditions of the Merger Agreement. If any stockholder is married, both such stockholder and his or her spouse must sign this Letter of Transmittal. Any stockholder whose signature appears alone hereby represents and warrants that such stockholder is not married. Signatures of trustees, executors, administrators, guardians, officers of corporations, attorneys-in-fact, or others acting in a fiduciary capacity must include the full title of the signer in such capacity. PLEASE SIGN HERE If Holder is a Natural Person:* If Holder is an Entity:* Signature Print Name By: Name: Its: Social Security Number / Taxpayer ID Dated: Telephone: Taxpayer ID Number: Dated: Telephone: Holder s Spouse: Signature Print Name Social Security Number / Taxpayer ID SIGNATURE GUARANTEE (REQUIRED ONLY IN CASE SPECIFIED IN GENERAL INSTRUCTION 3) The undersigned hereby guarantees the signature(s) which appear(s) on this Letter of Transmittal Dated: (Name of Eligible Institution Issuing Guarantee) (Please Print) 12 (Fix Medallion Stamp Above) * Must be signed by a registered holder(s) exactly as name(s) appear(s) on share certificate(s), and spouse, if any. If the holder is an entity, the person signing on behalf of the entity must provide appropriate evidence of his or her authority to so act. See Instructions.

13 INSTRUCTIONS 1. Letter of Transmittal. This Letter of Transmittal must be properly completed, duly executed, dated, and delivered or mailed to the address set forth on the enclosed cover letter to this Letter of Transmittal together with (a) the Certificate(s) you are surrendering (except in the case of holders of vested stock options or warrants) in order to exchange for cash in connection with the Merger (sometimes referred to herein as the Payment ) and (b) any other required documents. The method of delivering documentation is at the option and the risk of the holder. Documentation may be surrendered in person or by mail. IF SENT BY MAIL, REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, IS RECOMMENDED. Delivery will be deemed made when actually received by the Company. IF THE UNDERSIGNED IS A STOCKHOLDER, HE, SHE OR IT WILL NOT RECEIVE PAYMENT OF CONSIDERATION IN RESPECT OF THE MERGER AND DUE TO THE HOLDER WITH RESPECT TO STOCK OF THE COMPANY UNTIL HE, SHE OR IT HAS SURRENDERED HIS, HER, OR ITS STOCK CERTIFICATE(S) OR A SATISFACTORY AFFIDAVIT AND OTHER DOCUMENTATION RELATING TO THE LOSS OF STOCK CERTIFICATE(S) TO THE ADDRESS OF THE PAYING AGENT SET FORTH ON THE COVER LETTER ENCLOSED WITH THIS LETTER OF TRANSMITTAL. IF THE UNDERSIGNED IS A HOLDER OF VESTED OPTIONS AND/OR WARRANTS ONLY AND NOT A STOCKHOLDER, THEN THE UNDERSIGNED MAY DISREGARD INSTRUCTIONS IN THIS LETTER THAT REQUIRE THE SURRENDER OF CERTIFICATES OR REQUIRE PROVIDING INFORMATION ABOUT CERTIFICATES. HOWEVER, THESE INSTRUCTIONS, AND THIS LETTER OF TRANSMITTAL GENERALLY, CONTAIN OTHER IMPORTANT INFORMATION INCLUDING TAX AND PAYMENT INFORMATION. At the Effective Time of the Merger, all stock options and warrants will terminate automatically pursuant to the terms of the Amended and Restated AutoESL Design Technologies, Inc Stock Incentive Plan without the need for the option holders or warrant holders to take any action. You should complete one Letter of Transmittal listing all Company Certificates registered in the same name. If any Company securities are registered in different ways on several Certificates or in the books and records of the Company, you will need to complete, sign, and submit as many separate Letters of Transmittal as there are different registrations of Certificates or recordations in the books and records of the Company. You may not submit fewer than the entire number of shares of Stock represented by a stock certificate. 2. Signatures. The signature on this Letter of Transmittal must correspond exactly with the name(s) as written on the face of Certificate(s) surrendered or converted unless the shares of Stock described on this Letter of Transmittal have been assigned by the registered holder or holders thereof, in which event this Letter of Transmittal should be signed in exactly the same form as the name(s) of the last transferee(s) indicated on the transfers attached to or endorsed on the Certificate(s). The signature of holders of vested stock options or warrants must correspond exactly with the name(s) as written in the Company s books and records. For a name correction or for a change in name which does not involve a change in ownership, proceed as follows: For a change in name by marriage, etc., the Letter of Transmittal should be signed, e.g., Mary Doe, now by marriage Mary Jones. For a correction in name, the Letter of Transmittal should be signed, e.g., James E. Brown, incorrectly inscribed as J.E. Brown. The signature in each case should be guaranteed as described below in Instruction 3. If this Letter of Transmittal is signed by a trustee, executor, administrator, guardian, officer of a corporation, attorney-in-fact, or other person acting in a fiduciary or representative capacity, the person 13

14 signing must give his or her full title in such capacity and enclose appropriate evidence of his or her authority to so act. 3. Guarantee of Signatures. Signatures on this Letter of Transmittal must be guaranteed if the undersigned has completed the table entitled SPECIAL PAYMENT INSTRUCTIONS on page 3 hereof. In addition, if there is a name correction or a change in the name that does not involve a change in ownership as described above in Instruction 2, the signatures on this Letter of Transmittal must be guaranteed. Signatures required to be guaranteed on this Letter of Transmittal must be guaranteed by an eligible guarantor institution pursuant to Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended (generally a member firm of the New York Stock Exchange or any bank or trust company which is a member of the Medallion Program). Public notaries cannot execute acceptable guarantees of signatures. 4. Endorsement. Certificates need NOT be endorsed or accompanied by separate stock powers and the signature(s) need NOT be guaranteed. 5. Lost, Stolen or Destroyed Stock Certificate. In the event that any stockholder is unable to deliver any Certificate(s) representing his, her or its shares of Stock of the Company due to the loss or destruction of such Certificate(s), such fact should be indicated on the face of this Letter of Transmittal. In such case, the stockholder should also contact the Paying Agent at (877) or (718) to report the lost, stolen or destroyed Certificate(s). An Affidavit of Lost Certificate must be completed in order to effectively surrender such lost, stolen or destroyed Certificate(s). Upon reporting the lost, stolen or destroyed Certificate(s) to the Paying Agent, the Paying Agent will provide you with an Affidavit of Lost Certificate. Surrenders hereunder regarding such lost Certificate(s) will be processed only after such Affidavit of Lost Certificate has been submitted to and approved by the Paying Agent. Holders of lost, stolen or destroyed Certificates may also be required to post an indemnity bond. 6. Inquiries. All questions regarding appropriate procedures for surrendering shares of Stock, vested stock options or warrants of the Company should be directed to the Paying Agent or Parent, as the case may be, at the applicable mailing addresses or telephone numbers set forth on the enclosed cover letter to this Letter of Transmittal. 7. Additional Copies. Additional copies of this Letter of Transmittal may be obtained from the Paying Agent at the mailing address or telephone number set forth on the enclosed cover letter to this Letter of Transmittal. 8. Stock Transfer Taxes. Transfer Taxes, if any, will be paid by the stockholders. If payment is to be made to any person other than the registered holder(s), or if surrendered Certificate(s) are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any Transfer Taxes (whether imposed on the registered holder(s), the Company or any other person) payable on account of the Payment to such other person will be deducted from the merger consideration or must be paid by the recipient or the person signing this Letter of Transmittal unless evidence satisfactory to the Parent of the payment of such taxes, or exemption therefrom, is submitted. 9. Internal Revenue Service Forms. Under United States federal income tax law, in order to avoid United States federal backup withholding (currently at a rate of 28%), each United States stockholder, option holder or warrant holder receiving Payment is required to provide a correct Taxpayer Identification Number on Internal Revenue Service ( IRS ) Form W-9 (which is included in this Letter of Transmittal), and to indicate whether the stockholder is subject to backup withholding. Additionally, each non-united States stockholder, option holder or warrant holder is required to provide a properly executed Internal Revenue Service Form W-8BEN, or other applicable IRS Form W-8. Please see IMPORTANT U.S. TAX INFORMATION for more information. 10. Miscellaneous. Any and all Letters of Transmittal or facsimiles (including any other required documents) not in proper form are subject to rejection. The terms and conditions of the Merger 14

15 Agreement are incorporated herein by reference and are deemed to form part of the terms and conditions of this Letter of Transmittal. 11. Waiver of Conditions. To the extent permitted by applicable law, the Company and Parent reserve the right to waive any and all conditions set forth herein and accept for exchange any shares of Stock submitted for exchange. 15

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20 IMPORTANT U.S. TAX INFORMATION Under United States federal income tax law, United States Holders (as defined below) who are receiving any consideration in connection with the Merger are required to provide his, her or its current Taxpayer Identification Number ( TIN ). If such United States Holder is an individual, the TIN is his or her social security number. If the United States Holder does not provide the correct TIN or an adequate basis for an exemption, the holder may be subject to a $50 penalty imposed by the Internal Revenue Service, and any consideration such holder receives in the Merger may be subject to backup withholding at the applicable rate (currently 28%). If withholding results in an overpayment of taxes, a refund from the Internal Revenue Service may be obtained. To prevent backup withholding on any cash payment made to a United States Holder in connection with the Merger Agreement, such holder is required to notify the Paying Agent of his or her correct TIN by completing the enclosed IRS Form W-9 and certifying under penalties of perjury, that the TIN provided on the IRS Form W-9 is correct. In addition, the United States Holder must date and sign as indicated. If the United States Holder does not have a TIN, such holder should consult the IRS Form W-9 Instructions for instructions on applying for a TIN. To prevent backup withholding, holders that are not United States Holders should (i) submit a properly completed IRS Form W-8BEN, or other applicable IRS Form W-8, to the Paying Agent, certifying under penalties of perjury to the holder s foreign status or (ii) otherwise establish an exemption. IRS Forms W- 8BEN, or other applicable IRS Form W-8, may be obtained from the Paying Agent. Certain United States Holders (including, among others, corporations) are exempt recipients not subject to these backup withholding requirements. See the enclosed copy of the IRS Form W-9 and the Instructions to Form W-9. To avoid possible erroneous backup withholding, exempt United States Holders, while not required to file IRS Form W-9, should complete and return the IRS Form W-9. For purposes of these instructions, a United States Holder is (i) an individual who is a citizen or resident alien of the United States, (ii) a corporation (including an entity taxable as a corporation), partnership, company or association created or organized under the laws of the United States or of any political subdivision thereof, (iii) an estate the income of which is subject to United States federal income tax regardless of its source or (iv) a trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (b) the trust has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person. See IRS Form W-9 or W8 BEN, as applicable, for additional information and instructions. TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, YOU ARE HEREBY NOTIFIED THAT: (A) ANY FEDERAL TAX ADVICE CONTAINED HEREIN IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER THE INTERNAL REVENUE CODE; (B) THE ADVICE IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTION OR THE MATTERS ADDRESSED HEREIN; AND (C) THE TAXPAYER SHOULD SEEK ADVICE BASED ON THE TAXPAYER S PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR Palo Alto Server 1A - MSW 20