Exhibit 10.3

 

ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT, dated as of June 16, 2004 (“Escrow Agreement”), is by and
among EMANCIPATION CAPITAL LP, a Delaware limited partnership, as representative
of certain investors, including the Depositor (collectively, the “Investors”)
pursuant to the Underlying Agreement (as defined below) (“Depositor”); ARTEMIS
INTERNATIONAL SOLUTIONS CORPORATION, a Delaware corporation (“Recipient”); and
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as Escrow
Agent hereunder (“Escrow Agent”).

 

BACKGROUND

 

A.  Investors and Recipient have entered into a Securities Purchase Agreement
(as amended, the “Underlying Agreement”), dated as of June 16, 2004, in
connection with the issuance and sale by the Recipient to the Investors of
convertible preferred shares of the Recipient in an aggregate amount of Nine
Million Dollars ($9,000,000).  The Underlying Agreement provides that Investors
shall deposit the Escrow Funds (defined below) in a segregated escrow account to
be held by Escrow Agent in connection with the Recipient’s indebtedness to
Laurus Master Fund Ltd.

 

B.  Escrow Agent has agreed to accept, hold, and disburse the funds deposited
with it and the earnings thereon in accordance with the terms of this Escrow
Agreement.

 

C.  Investors and Recipient have appointed the Representatives (as defined
below) to represent them for all purposes in connection with the funds to be
deposited with Escrow Agent and this Escrow Agreement.

 

D.  In order to establish the escrow of funds and to effect the provisions of
the Underlying Agreement, the parties hereto have entered into this Escrow
Agreement.

 

STATEMENT OF AGREEMENT

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, for themselves, their
successors and assigns, hereby agree as follows:

 

1.                                       Definitions.  The following terms shall
have the following meanings when used herein:

 

“Escrow Funds” shall mean the funds deposited with Escrow Agent pursuant to
Section 3 of this Agreement, together with any interest and other income
thereon.

 

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“Escrow Period” shall mean the period commencing on the date hereof and ending
on the applicable termination date set forth on Schedule A hereto.

 

“Investors’ Representative” shall mean the Depositor.

 

“Recipient Representative” shall mean the persons so designated on Schedule A
hereto or any other person designated in a writing signed by Recipient and
delivered to Escrow Agent and the Investor Representative in accordance with the
notice provisions of this Escrow Agreement, to act as its representative under
this Escrow Agreement.

 

“Representatives” shall mean the Investors’ Representative and the Recipient
Representative.

 

“Written Direction” shall mean a written direction executed by the Depositor and
directing Escrow Agent to disburse all or a portion of the Escrow Funds or to
take or refrain from taking an action pursuant to this Escrow Agreement.

 

2.                                       Appointment of and Acceptance by Escrow
Agent.  Depositor and Recipient hereby appoint Escrow Agent to serve as escrow
agent hereunder.  Escrow Agent hereby accepts such appointment and, upon receipt
by wire transfer of the Escrow Funds in accordance with Section 3 below, agrees
to hold, invest and disburse the Escrow Funds in accordance with this Escrow
Agreement.

 

3.                                       Deposit of Escrow Funds. 
Simultaneously with the execution and delivery of this Escrow Agreement,
Depositor will transfer the Escrow Funds in the amount set forth on Schedule A
hereto to Escrow Agent, by wire transfer of immediately available funds, to the
account of the Escrow Agent referenced on Schedule A hereto.

 

4.                                       Disbursements of Escrow Funds.  Escrow
Agent shall disburse Escrow Funds at any time and from time to time, upon
receipt of, and in accordance with, a Written Direction.  Such Written Direction
shall contain wiring instructions or an address to which a check shall be sent. 
In connection with the Underlying Agreement, the Recipient shall use
commercially reasonable efforts to restructure its current indebtedness with
Laurus Master Fund, Ltd. (“Laurus”) prior to the expiration of the Escrow
Period.  In the event that the terms and conditions of such restructuring is
satisfactory to Depositor in its sole discretion and is consummated prior to the
expiration of the Escrow Period, then Depositor shall, within three (3) business
days after the expiration of the Escrow Period and without any additional
condition, send a Written Direction to the Escrow Agent in the form attached
hereto as Exhibit A.  In the event that a satisfactory restructuring, in the
sole discretion of Depositor, is not achieved prior to the expiration of the
Escrow Period, the Depositor shall within three (3) business days after the
expiration of the Escrow Period and without any additional conditions send a
Written Direction in the form attached hereto as Exhibit B. The Depositor shall
allocate money between Laurus and the

 

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Recipient in accordance with a pay-out letter duly executed by Laurus and
Recipient.  Absent such a pay-out letter, the Depositor shall be entitled to
allocate the Escrow Funds among Laurus and the Recipient in its reasonable
discretion so as to use its commercially reasonable efforts to fully repay the
Laurus indebtedness (including any and all outstanding principal, interest,
prepayment penalties and liquidated damages).  In the event that a restructuring
is not consummated, Recipient shall take all commercially reasonable action to
terminate its indebtedness with Laurus (including, without limitation,
negotiating and executing with Laurus a pay-out letter and such other
agreements, documents and instruments required by Laurus to terminate the Laurus
credit facilities and fully co-pay the Laurus indebtedness).  Upon the
expiration of the Escrow Period, Escrow Agent shall distribute, as promptly as
practicable, the Escrow Funds in the manner described on Schedule A, without any
further instruction or direction from the Representatives.

 

All disbursements of funds from the Escrow Funds shall be subject to the fees
and claims of Escrow Agent and the Indemnified Parties (as defined below)
pursuant to Section 10 and Section 11 below.

 

5.                                       Suspension of Performance; Disbursement
Into Court.  If, at any time, (i) there shall exist any dispute between
Depositor, Recipient or the Representatives with respect to the holding or
disposition of all or any portion of the Escrow Funds or any other obligations
of Escrow Agent hereunder, (ii) Escrow Agent is unable to determine, to Escrow
Agent’s sole satisfaction, the proper disposition of all or any portion of the
Escrow Funds or Escrow Agent’s proper actions with respect to its obligations
hereunder, or (iii) the Representatives have not within 30 days of the
furnishing by Escrow Agent of a notice of resignation pursuant to Section 7
hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent
may, in its sole discretion, take either or both of the following actions:

 

a.                                       suspend the performance of any of its
obligations (including without limitation any disbursement obligations) under
this Escrow Agreement until such dispute or uncertainty shall be resolved to the
sole satisfaction of Escrow Agent or until a successor Escrow Agent shall have
been appointed (as the case may be).

 

b.                                      petition (by means of an interpleader
action or any other appropriate method) any court of competent jurisdiction in
any venue convenient to Escrow Agent, for instructions with respect to such
dispute or uncertainty, and to the extent required or permitted by law, pay into
such court, for holding and disposition in accordance with the instructions of
such court, all Escrow Funds, after deduction and payment to Escrow Agent of all
fees and expenses (including court costs and attorneys’ fees) payable to,
incurred by, or expected to be incurred by Escrow Agent in connection with the
performance of its duties and the exercise of its rights hereunder.

 

Escrow Agent shall have no liability to Depositor, Recipient, their respective
shareholders or members or any other person with respect to any such suspension
of performance or disbursement

 

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into court, specifically including any liability or claimed liability that may
arise, or be alleged to have arisen, out of or as a result of any delay in the
disbursement of the Escrow Funds or any delay in or with respect to any other
action required or requested of Escrow Agent.

 

6.                                       Investment of Funds.  The Escrow Agent
is herein directed and instructed to initially invest and reinvest the Escrow
Funds in the investment indicated on Schedule A hereto.  With the execution of
this document, the parties hereto acknowledge receipt of prospectuses and/or
disclosure materials associated with the investment vehicle, either through
means of hardcopy or via access to the website associated with the investment
selected by the parties to this Escrow Agreement.  The parties hereto
acknowledge that they have discussed the investment and are in agreement as to
the selected investment.  The Depositor may provide instructions changing the
investment of the Escrow Funds (subject to applicable minimum investment
requirements) by the furnishing of a Written Direction to the Escrow Agent;
provided, however, that no investment or reinvestment may be made without the
consent of the Recipient; and provided, however, that no investment or
reinvestment may be made except in the following:

 

a.                                       direct obligations of the United States
of America or obligations the principal of and the interest on which are
unconditionally guaranteed by the United State of America or money market
accounts consisting solely of such obligations; or

 

b.                                      certificates of deposit issued by any
bank, bank and trust company, or national banking association (including Escrow
Agent and its affiliates), which certificates of deposit are insured by the
Federal Deposit Insurance Corporation or a similar governmental agency; or

 

c.                                       repurchase agreements with any bank,
trust company, or national banking association (including Escrow Agent and its
affiliates).

 

If Escrow Agent has not received a Written Direction at any time that an
investment decision must be made, Escrow Agent shall invest the Escrow Funds, or
such portion thereof as to which no Written Direction has been received, in
investments described in clause (a) above.  Each of the foregoing investments
shall be made in the name of Escrow Agent. No investment shall be made in any
instrument or security that has a maturity of greater than thirty (30) days. 
Notwithstanding anything to the contrary contained herein, Escrow Agent may,
without notice to the Representatives, sell or liquidate any of the foregoing
investments at any time if the proceeds thereof are required for any
disbursement of Escrow Funds permitted or required hereunder.  All investment
earnings shall become part of the Escrow Funds and investment losses shall be
charged against the Escrow Funds.  Escrow Agent shall not be liable or
responsible for loss in the value of any investment made pursuant to this Escrow
Agreement, or for any loss, cost or penalty resulting from any sale or
liquidation of the Escrow Funds.  With respect to any Escrow Funds received by
Escrow Agent after ten o’clock, a.m., Charlotte, North Carolina, time, Escrow
Agent shall not be required to invest such funds or to effect any investment
instruction until the next day upon which banks in Charlotte, North Carolina are
open for business.

 

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7.                                       Resignation of Escrow Agent.  Escrow
Agent may resign and be discharged from the performance of its duties hereunder
at any time by giving thirty (30) days prior written notice to the Depositor and
Recipient specifying a date when such resignation shall take effect.  Upon any
such notice of resignation, the Representatives jointly shall appoint a
successor Escrow Agent hereunder prior to the effective date of such
resignation.  The retiring Escrow Agent shall transmit all records pertaining to
the Escrow Funds and shall pay all Escrow Funds to the successor Escrow Agent,
after making copies of such records as the retiring Escrow Agent deems advisable
and after deduction and payment to the retiring Escrow Agent of all fees and
expenses (including court costs and attorneys’ fees) payable to, incurred by, or
expected to be incurred by the retiring Escrow Agent in connection with the
performance of its duties and the exercise of its rights hereunder.  After any
retiring Escrow Agent’s resignation, the provisions of this Escrow Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Escrow Agent under this Escrow Agreement.  Any corporation or
association into which the Escrow Agent may be merged or converted or with which
it may be consolidated, or any corporation or association to which all or
substantially all of the escrow business of the Escrow Agent’s corporate trust
line of business may be transferred, shall be the Escrow Agent under this Escrow
Agreement without further act.

 

8.                                       Liability of Escrow Agent.  The Escrow
Agent undertakes to perform only such duties as are expressly set forth herein
and no duties shall be implied.  The Escrow Agent shall have no liability under
and no duty to inquire as to the provisions of any agreement other than this
Escrow Agreement.  The Escrow Agent shall not be liable for any action taken or
omitted by it in good faith except to the extent that a court of competent
jurisdiction determines that the Escrow Agent’s gross negligence or willful
misconduct was the primary cause of any loss to the Depositor or Recipient. 
Escrow Agent’s sole responsibility shall be for the safekeeping and disbursement
of the Escrow Funds in accordance with the terms of this Escrow Agreement. 
Escrow Agent shall have no implied duties or obligations and shall not be
charged with knowledge or notice of any fact or circumstance not specifically
set forth herein.  Escrow Agent may rely upon any notice, instruction, request
or other instrument, not only as to its due execution, validity and
effectiveness, but also as to the truth and accuracy of any information
contained therein, which Escrow Agent shall believe to be genuine and to have
been signed or presented by the person or parties purporting to sign the same. 
In no event shall Escrow Agent be liable for incidental, indirect, special,
consequential or punitive damages (including, but not limited to lost profits),
even if the Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action.  Escrow Agent shall not be
obligated to take any legal action or commence any proceeding in connection with
the Escrow Funds, any account in which Escrow Funds are deposited, this Escrow
Agreement or the Underlying Agreement, or to appear in, prosecute or defend any
such legal action or proceeding.  Escrow Agent may consult legal counsel
selected by it in the event of any dispute or question as to the construction of
any of the provisions hereof or of any other agreement or of its duties
hereunder, or relating to any dispute involving any party hereto, and shall
incur no liability and shall be fully indemnified from any liability

 

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whatsoever in acting in accordance with the opinion or instruction of such
counsel.  Depositor and Recipient, jointly and severally, shall promptly pay,
upon demand, the reasonable fees and expenses of any such counsel.

 

The Escrow Agent is authorized, in its sole discretion, to comply with orders
issued or process entered by any court with respect to the Escrow Funds, without
determination by the Escrow Agent of such court’s jurisdiction in the matter. 
If any portion of the Escrow Funds is at any time attached, garnished or levied
upon under any court order, or in case the payment, assignment, transfer,
conveyance or delivery of any such property shall be stayed or enjoined by any
court order, or in case any order, judgment or decree shall be made or entered
by any court affecting such property or any part thereof, then and in any such
event, the Escrow Agent is authorized, in its sole discretion, to rely upon and
comply with any such order, writ, judgment or decree which it is advised by
legal counsel selected by it is binding upon it without the need for appeal or
other action; and if the Escrow Agent complies with any such order, writ,
judgment or decree, it shall not be liable to any of the parties hereto or to
any other person or entity by reason of such compliance even though such order,
writ, judgment or decree may be subsequently reversed, modified, annulled, set
aside or vacated.

 

9.                                       Indemnification of Escrow Agent.  From
and at all times after the date of this Escrow Agreement, Depositor and
Recipient, jointly and severally, shall, to the fullest extent permitted by law,
defend, indemnify and hold harmless Escrow Agent and each director, officer,
employee, attorney, agent and affiliate of Escrow Agent (collectively, the
“Indemnified Parties”) against any and all actions, claims (whether or not
valid), losses, damages, liabilities, costs and expenses of any kind or nature
whatsoever (including without limitation reasonable attorneys’ fees, costs and
expenses) incurred by or asserted against any of the Indemnified Parties from
and after the date hereof, whether direct, indirect or consequential, as a
result of or arising from or in any way relating to any claim, demand, suit,
action or proceeding (including any inquiry or investigation) by any person,
including without limitation Depositor or Recipient, whether threatened or
initiated, asserting a claim for any legal or equitable remedy against any
person under any statute or regulation, including, but not limited to, any
federal or state securities laws, or under any common law or equitable cause or
otherwise, arising from or in connection with the negotiation, preparation,
execution, performance or failure of performance of this Escrow Agreement or any
transactions contemplated herein, whether or not any such Indemnified Party is a
party to any such action, proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall have the right
to be indemnified hereunder for any liability finally determined by a court of
competent jurisdiction, subject to no further appeal, to have resulted solely
from the gross negligence or willful misconduct of such Indemnified Party. Each
Indemnified Party shall, in its sole discretion, have the right to select and
employ separate counsel with respect to any action or claim brought or asserted
against it, and the reasonable fees of such counsel shall be paid upon demand by
the Depositor and Recipient jointly and severally.   The obligations of
Depositor and Recipient under this Section 9 shall survive any termination of
this Escrow Agreement and the resignation or removal of Escrow Agent.

 

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The parties agree that neither the payment by Depositor or Recipient of any
claim by Escrow Agent for indemnification hereunder nor the disbursement of any
amounts to Escrow Agent from the Escrow Funds in respect of a claim by Escrow
Agent for indemnification shall impair, limit, modify, or affect, as between the
Investors and Recipient, the respective rights and obligations of the Investors,
on the one hand, and Recipient, on the other hand, under the Underlying
Agreement.

 

10.                                 Fees and Expenses of Escrow Agent. 
Recipient shall compensate Escrow Agent for its services hereunder in accordance
with Schedule A attached hereto and, in addition, shall reimburse Escrow Agent
for all of its reasonable out-of-pocket expenses, including attorneys’ fees,
travel expenses, telephone and facsimile transmission costs, postage (including
express mail and overnight delivery charges), copying charges and the like.  The
additional provisions and information set forth on Schedule A are hereby
incorporated by this reference, and form a part of this Escrow Agreement.  All
of the compensation and reimbursement obligations set forth in this Section 10
shall be payable by Recipient upon demand by Escrow Agent.  The obligations of
Recipient under this Section 10 shall survive any termination of this Escrow
Agreement and the resignation or removal of Escrow Agent. Escrow Agent is
authorized to, and may, disburse to itself from the Escrow Funds, from time to
time, the amount of any compensation and reimbursement of out-of-pocket expenses
due and payable hereunder (including any amount to which Escrow Agent or any
Indemnified Party is entitled to seek indemnification pursuant to Section 9
hereof).  Escrow Agent shall notify the Representatives of any disbursement from
the Escrow Funds to itself or any Indemnified Party in respect of any
compensation or reimbursement hereunder and shall furnish to the Representatives
copies of all related invoices and other statements.  Recipient, Depositor and
the Representatives hereby grant to Escrow Agent and the Indemnified Parties a
security interest in and lien upon the Escrow Funds to secure all obligations
with respect to the right to offset the amount of any compensation or
reimbursement due any of them hereunder (including any claim for indemnification
pursuant to Section 9 hereof) against the Escrow Funds.  If for any reason funds
in the Escrow Funds are insufficient to cover such compensation and
reimbursement, Depositor and Recipient shall promptly pay such amounts to Escrow
Agent or any Indemnified Party upon receipt of an itemized invoice.

 

11.                                 Representations and Warranties.  Each of
Depositor and Recipient respectively makes the following representations and
warranties to Escrow Agent:

 

(i)                                     It is duly organized, validly existing,
and in good standing under the laws of the state of its incorporation or
organization, and has full power and authority to execute and deliver this
Escrow Agreement and to perform its obligations hereunder.

 

(ii)                                  This Escrow Agreement has been duly
approved by all necessary action, including any necessary shareholder or
membership approval, has been executed by its duly authorized officers, and
constitutes its valid and binding agreement enforceable in

 

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accordance with its terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

(iii)                               The execution, delivery, and performance of
this Escrow Agreement is in accordance with the Underlying Agreement and will
not violate, conflict with, or cause a default under its articles of
incorporation, articles of organization, bylaws, management agreement or other
organizational document, as applicable, any applicable law or regulation, any
court order or administrative ruling or decree to which it is a party or any of
its property is subject, or any agreement, contract, indenture, or other binding
arrangement, including without limitation the Underlying Agreement, to which it
is a party or any of its property is subject.

 

(iv)                              The applicable persons designated on Schedule
A hereto have been duly appointed to act as its representatives hereunder and
have full power and authority to execute and deliver any Written Direction, to
amend, modify or waive any provision of this Escrow Agreement and to take any
and all other actions as the Representatives under this Escrow Agreement, all
without further consent or direction from, or notice to, it or any other party.

 

(v)                                 No party other than the parties hereto has,
or shall have, any lien, claim or security interest in the Escrow Funds or any
part thereof.  No financing statement under the Uniform Commercial Code is on
file in any jurisdiction claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.

 

(vi)                              All of its representations and warranties
contained herein are true and complete as of the date hereof.

 

12.                                 Identifying Information.  Depositor and
Recipient acknowledge that a portion of the identifying information set forth on
Schedule A is being requested by the Escrow Agent in connection with the USA
Patriot Act, Pub.L.107-56 (the “Act”), and Depositor and Recipient agree to
provide any additional information requested by the Escrow Agent in connection
with the Act or any similar legislation or regulation to which Escrow Agent is
subject, in a timely manner. The Depositor and the Recipient each represent that
all identifying information set forth on Schedule A, including without
limitation, its Taxpayer Identification Number assigned by the Internal Revenue
Service or any other taxing authority, is true and complete on the date hereof
and will be true and complete at the time of any disbursement of the Escrow
Funds.

 

13.                                 Consent to Jurisdiction and Venue.  In the
event that any party hereto commences a lawsuit or other proceeding relating to
or arising from this Escrow Agreement, the

 

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parties hereto agree that the federal courts located in the County of New York,
State of New York shall have the sole and exclusive jurisdiction over any such
proceeding.  If such court lacks federal subject matter jurisdiction, the
parties agree that the state courts located in the County of New York, State of
New York shall have sole and exclusive jurisdiction.  Any of these courts shall
be proper venue for any such lawsuit or judicial proceeding and the parties
hereto waive any objection to such venue.  The parties hereto consent to and
agree to submit to the jurisdiction of any of the courts specified herein and
agree to accept service of process to vest personal jurisdiction over them in
any of these courts.

 

14.                                 Notice.  All notices, approvals, consents,
requests, and other communications hereunder shall be in writing and shall be
deemed to have been given when the writing is delivered if given or delivered by
hand, overnight delivery service or facsimile transmitter (with confirmed
receipt) to the address or facsimile number set forth on Schedule A hereto, or
to such other address as each party may designate for itself by like notice, and
shall be deemed to have been given on the date deposited in the mail, if mailed,
by first-class, registered or certified mail, postage prepaid, addressed as set
forth on Schedule A hereto, or to such other address as each party may designate
for itself by like notice.

 

15.                                 Amendment or Waiver.  This Escrow Agreement
may be changed, waived, discharged or terminated only by a writing signed by the
Representatives and Escrow Agent.  No delay or omission by any party in
exercising any right with respect hereto shall operate as a waiver.  A waiver on
any one occasion shall not be construed as a bar to, or waiver of, any right or
remedy on any future occasion.

 

16.                                 Severability.  To the extent any provision
of this Escrow Agreement is prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Escrow Agreement.

 

17.                                 Governing Law.  This Escrow Agreement shall
be construed and interpreted in accordance with the internal laws of the State
of New York without giving effect to the conflict of laws principles thereof.

 

18.                                 Entire Agreement.  This Escrow Agreement
including the Schedules and Exhibits attached hereto constitutes the entire
agreement between the parties relating to the holding, investment and
disbursement of the Escrow Funds and sets forth in their entirety the
obligations and duties of Escrow Agent with respect to the Escrow Funds.

 

19.                                 Binding Effect.  All of the terms of this
Escrow Agreement, as amended from time to time, shall be binding upon, inure to
the benefit of and be enforceable by the respective successors and assigns of
Depositor, Recipient and Escrow Agent.

 

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20.                                 Execution in Counterparts.  This Escrow
Agreement and any Written Direction may be executed in two or more counterparts
(including by facsimile), which when so executed shall constitute one and the
same agreement or direction.

 

21.                                 Termination.  Upon the first to occur of the
termination of the Escrow Period, the disbursement of all amounts in the Escrow
Funds pursuant to Written Directions or the disbursement of all amounts in the
Escrow Funds into court pursuant to Section 5 or Section 8 hereof, this Escrow
Agreement shall terminate and Escrow Agent shall have no further obligation or
liability whatsoever with respect to this Escrow Agreement or the Escrow Funds.

 

22.                                 Dealings.  The Escrow Agent and any
stockholder, director, officer or employee of the Escrow Agent may buy, sell,
and deal in any of the securities of the Depositor or Recipient and become
pecuniary interested in any transaction in which the Depositor or Recipient may
be interested, and contract and lend money to the Depositor or Recipient and
otherwise act as fully and freely as though it were not Escrow Agent under this
Agreement.  Nothing herein shall preclude the Escrow Agent from acting in any
other capacity for the Depositor or Recipient or for any other entity.

 

 

Remainder of Page Intentionally Left Blank

 

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IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be
executed under seal as of the date first above written.

 

 

EMANCIPATION CAPITAL LP

 

 

 

 

 

By:

 

 

 

EMANCIPATION CAPITAL, LLC,
its general partner

 

 

 

 

 

By:

 

 

 

Name:

Charles Frumberg

 

Title:

Managing Member

 

[CORPORATE SEAL]

 

 

ATTEST:

 

 

 

Secretary

 

 

ARTEMIS INTERNATIONAL SOLUTIONS CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

[CORPORATE SEAL]

 

 

 

ATTEST:

 

 

 

 

 

Secretary

 

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WACHOVIA BANK, NATIONAL ASSOCIATION
as Escrow Agent

 

 

 

By:

 

 

 

Title: Assistant Vice President

 

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SCHEDULE A

1.                                       Escrow Funds.

 

Escrow Funds
amount:                                                                                                                                                                                                                     
Two Million Three Hundred Forty Two Thousand Three Hundred and Seventy Dollars
($2,342,370)

 

Escrow Funds wiring
instructions:                                                                                                                                                         
Wachovia Bank, National Association
1525 W. W.T. Harris Boulevard
Charlotte, NC 28282
ABA# 053 000 219
Credit a/c 5000000016439 - Incoming
FFC:                 EMAN/ARTEMIS ESC 3572002227
Attn:  CT- 4882 New York

 

2.                                       Escrow Agent Fees.

 

Acceptance Fee:

 

$

1000

 

Annual Escrow Fee:

 

$

2,500

 

Out-of-Pocket Expenses:

 

$

 

 

[Transactional Costs]:

 

$

 

 

[Other Fees/Attorney, etc.]:

 

$

 

 

TOTAL

 

$

 

 

 

The Acceptance Fee and the Annual Escrow Fee are payable upon execution of the
escrow documents.  In the event the escrow is not funded, the Acceptance Fee and
all related expenses, including attorneys’ fees, remain due and payable, and if
paid, will not be refunded.  Annual fees cover a full year in advance, or any
part thereof, and thus are not pro-rated in the year of termination.

 

The fees quoted in this schedule apply to services ordinarily rendered in the
administration of an Escrow Account and are subject to reasonable adjustment
based on final review of documents, or when the Escrow Agent is called upon to
undertake unusual duties or responsibilities, or as changes in law, procedures,
or the cost of doing business demand.  Services in addition to and not
contemplated in this Agreement, including, but not limited to, document
amendments and revisions, non-standard cash and/or investment transactions,
calculations, notices and reports, and legal fees, will be billed as
extraordinary expenses.

 

Unless otherwise indicated, the above fees relate to the establishment of one
escrow account.  Additional sub-accounts governed by the same Escrow Agreement
may incur an additional charge.  Transaction costs include charges for wire
transfers, checks, internal transfers and securities transactions.

 

3.                                       Taxpayer Identification Numbers.

 

Depositor:                                                                                       
02-069-5738

 

Recipient:                                                                                          
13-402-3714

 

A-1

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4.                                       Termination and Disbursement.  Unless
earlier terminated by the provisions of the Escrow Agreement, the Escrow Period
will terminate on July 16, 2004.  Any Escrow Funds remaining on such date shall
be distributed according to a Written Instruction in accordance with Section 4
of the Escrow Agreement, and any remaining amounts of the Escrow Funds shall
automatically be distributed 100% to Recipient and 0% to Depositor.

 

5.                                       Investment Instructions

 

Goldman Sachs Financial Square Government Administration Class Fund #466:

 

The minimum fee for sweeping funds into or out of the fund selected is an
annualized amount of 25/100 of 1% (25 basis points) and is deducted from the
interest posted to the account.

 

6.                                       Representatives.

 

The following person is hereby designated and appointed as Investor
Representative under the Escrow Agreement:

 

 

 

 

 

Name: Charles Frumberg

Specimen Signature

 

The following person is hereby designated and appointed as Recipient
Representative under the Escrow Agreement:

 

 

 

 

 

Name: Charles Savoni

Specimen signature

 

7.                                       Representative Information.  The
following information should be provided to Escrow Agent separately by each
Representative and any future Representative:

 

1.  Date of Birth

2.  Address

3.  Mailing Address, if different

4.  Social Security Number

 

A-2

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8.                                       Notice Addresses.

Principal Place of Business,

if different

If to Depositor at:                                                c/o
Emancipation Capital LLC
153 East 53rd Street
26th Floor
New York, New York  10022

Attention:   Jonathan Rothenberg
Charlie Frumberg

Facsimile:  (212) 521-5036
Telephone: (212) 521-5033

 

with a copy (for informational purposes) to:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York  10022

Telephone:                                    (212) 756-2000

Facsimile:                                            (212) 593-5955

Attention:                                         Michael R. Littenberg, Esq.

 

If to Recipient at:                                                   Artemis
International
Solutions Corporation
4041 MacArthur Blvd.,
Suite 401
Newport Beach, California
92660
ATTN: Charles S. Savoni
Facsimile: 949-660-6503
Telephone: 949-660-6550
E-mail: charles.savoni@us.aisc.com

 

If to the Escrow

Agent
at:                                                                                             
Wachovia Bank, National Association, as Escrow Agent
One Penn Plaza, Suite 1414
New York, NY 10119
ATTENTION: Corporate Trust – NY4040
Facsimile: 212-273-7015

 

A-3

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Exhibit A

 

[Letterhead]

 

[Date]

 

 

Dear Escrow Agent:

 

Pursuant to Section 4 of that certain Escrow Agreement, dated as of June     ,
2004, by and among Emancipation Capital LP (“Depositor”), Artemis International
Solutions Corporation (“Recipient”) and Wachovia Bank (“Escrow Agent”), please
consider this letter as an authorization by the Depositor to release to
Recipient the entire amount of the Escrow Funds to the account designated on
Schedule 1 attached hereto.

 

 

Sincerely,

 

 

EMANCIPATION CAPITAL LP

 

 

By:

 

 

 

EMANCIPATION CAPITAL, LLC,

 

its general partner

 

 

 

 

By:

 

 

 

Name:

Charles Frumberg

 

Title:

Managing Member

 

--------------------------------------------------------------------------------

 

Exhibit B

 

[Letterhead]

 

[Date]

 

 

Dear Escrow Agent:

 

Pursuant to Section 4 of that certain Escrow Agreement, dated as of June     ,
2004, by and among Emancipation Capital LP (“Depositor”), Artemis International
Solutions Corporation (“Recipient”) and Wachovia Bank (“Escrow Agent”), please
consider this letter as an authorization by the Depositor to release (i) to
Laurus Master Fund Ltd, from the Escrow Funds, an aggregate amount of
[                         ($                )](1) and (ii) to the Recipient any
remaining amounts of the Escrow Funds to the account designated on Schedule 1
attached hereto.

 

 

Sincerely,

 

 

EMANCIPATION CAPITAL LP

 

 

By:

 

 

 

EMANCIPATION CAPITAL, LLC,

 

its general partner

 

 

 

 

By:

 

 

 

Name:

Charles Frumberg

 

Title:

Managing Member

 

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(1) To be completed by Depositor in accordance with Section 4 of the Escrow
Agreement.

 

2

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